News / New GPDR laws may be a barrier to the full logistics potential of blockchain

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Blockchain may help provide supply chain solutions, but the new GDPR legislation has exposed some of the challenges the technology faces.

Last month, the EU brought in new General Data Protection Regulations, of which a key element was the “right to be forgotten”.

Transport Intelligence’s (Ti’s) Why is Blockchain a Game Changer? report claims that, from a technical standpoint, blockchain would always find itself in breach of the new laws.

“The design of a blockchain ensures it is immutable and cannot be changed,” the report says. “Therefore, due to the design of the technology it would be in breach of the GDPR.”

The technology is essentially an encrypted messaging system that allows supply chain partners to operate a shared ledger that records all the events in the processing and physical progress of a shipment, such as customs entries or bills of lading.

“GDPR is primarily focused on personal data and across the supply chain, personal data is often captured [addresses, etc] so the potential for breaches exists,” add the report.

“How this conflict will be resolved is unknown at the moment, but it does not seem to be holding back the evolution of this technology.”

The report suggests the “conundrum” this throws up is a prime example of legislation failing to keep pace with technological developments. But, it adds, there are potential fixes, including a technology solution that is “trustless”.

“[A solution with] no central authority with any individual able to control the data – including deciding how long the data exists, its use and purposes,” the report continues. “According to IBM, the solution would be to configure the networks so that no personal data is held on the blockchain.

“To comply with GDPR, personal data should be kept private from the blockchain in an ‘off-chain’ data store, with only its evidence (cryptographic hash) exposed to the chain.”

However, while the problem persists, says the report, it may be a case of the technology having a more limited scope than initially hoped. In particular, ita ability to participate in a “significant area” of innovation would likely be restricted.

The report suggests: “It may be that limited implementations of the technology are deployed that only support assets and inventories controlled by corporate entities rather than individuals. This would mean that a significant area of innovation in the sector, that of e-commerce, would be off limits.”

The full report is available from The Loadstar shop.