Italy: Blockchain And Data Protection: The Main Concerns
As one of the most important drivers of the digital industrial revolution, blockchain technology and its applications are today one of the most discussed global topics. A blockchain can be defined as a decentralised database that keeps track of an unlimited number of data assets and transactions through a peer-to-peer network. It is a registry maintained by a consensus algorithm and stored in a network of “nodes”, i.e. computers that allow (also personal!) data to be included in “blocks” that are chained (hashed) one to another.
Blockchain’s usage is no longer limited to digital crypto currencies, as blockchain databases may be deployed in innumerable circumstances and scenarios, including, for instance, within the financial services and insurance sectors for money transfer, peer-to-peer lending and transfer of securities, as well as automatic execution of contracts.
The advantages of blockchain include, amongst others, transparent and tamper-proof processes, disintermediation and cost reductions, security (because of the hashing process), and more generally an additional layer of trust due to the fact that each transaction is verified by a wider audience of “nodes”.
Regulators are setting up a legal framework for operating a blockchain in a (legally) safe environment, including blockchain-based smart contracts. In this respect, Italy is one of the first jurisdictions that has passed specific legislation on blockchain (which will be discussed in the next issue of our TMT Bites).
That said, the relationship between blockchain and other distributed ledger technologies (DLTs) to personal data protection, including the provisions of the General Data Protection Regulation no. 679/2016 (the “GDPR”), has yet to be fully addressed. ..Read More..