Solutions to Data Protection Challenges in Distributed Ledger and Blockchain Technologies: A Combined Legal and Technical Approach

Blockchains and distributed ledgers have attracted increasing attention since the introduction of the Bitcoin blockchain. The ability to run decentralized computations on open networks, on Bitcoin and on the Ethereum Virtual Machine, has led practitioners and researchers to investigate the use of blockchains and distributed ledgers for a variety of applications that involve the management of personal data. However, the very characteristics of such distributed ledger technologies (DLTs)—immutability, decentralization, and automation—appear at odds with data protection legislation like the European Union’s General Data Protection Regulation (GDPR). This poses significant challenges when designing applications involving personal data. This chapter provides an analysis of possible solutions to these challenges, including results from the literature, proposals for new solutions, and a discussion of challenges that remain despite these solutions. In all cases, solutions require a combination of legal and technical contributions. For example, legal interpretations must take into account the decentralized and general-purpose nature of DLTs, while solutions like mutable ledgers and geographically aware storage may provide answers to some legal concerns.