Blockchain is a foreign technology to most individuals, and while its primary use at present is in cryptocurrency, it’s likely to become a mainstream tool for security and recordkeeping over the next few years. The appeal? At its core, blockchain is a high-tech ledger, an encryption technology that uses math to verify information, record transactions, and protect data integrity. This is vital to healthcare, finance, and just about every other industry in this high-tech era.
Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid?
Everyone wants increased data security, which explains blockchain’s popularity – but other players have raised concerns about the permanency of this system. When documents and other information are firmly encoded in this fashion, can it ever really be eliminated? Is every document and interaction now permanent?
Jim Chanos has a new short target in his sights. Earlier this week, the hedge fund manager disclosed that he is betting against "legacy" data centers that face growing competition from the trio of technology giants, which have previously been their biggest customers. The fund manager, who is best known for his winning bet against Read More
Personal and Permanent
As evidenced by the recent Cambridge Analytica scandal, people are deeply concerned with the status of their personal data – and that’s why blockchain technology is so appealing. At the most basic level, it promises to help us regain control of our personal data. But to have control of our data, don’t we have to be able to get rid of that information if we wish to?
This is the primary concern about blockchain, that it creates new vulnerabilities through permanency. In the past, when we wanted to get rid of information, particularly old records, we simply shredded them; as the office supply company Viking phrases it, “data shredded, data protected.” It’s the gold standard.
Over 90% of businesses still use at least some printed documents and new legislation in the UK requires 100% of non-necessary information be securely destroyed. Shredding accomplishes that. But when data is born digital, you can’t shred it. The blockchain is supposed to protect it, but permanency may not be protected, depending on the circumstances. It hasn’t been around long enough for us to be sure.
Data Production or Data Protection?
One reason users should be concerned about wider use of blockchain technology is that, while it has many appropriate applications in fields like healthcare and finance, excessive and premature trust may mean generating more – and more permanent – information than necessary. For example, one Swiss coffee chain recently launched a cryptocurrency-style loyalty program. While it’s certainly a secure payment form, do we need to encrypt our coffee purchases to that extent?
In a more serious case, DocSensus, a product of Deloitte Ukraine, is designed to digitize paper documents to create a firm paper trail, preventing unauthorized changes and falsification, and manage documents throughout their lifecycle. Companies see this as an ideal mode of legal protection, but it could also mean encoding large amounts of personal information – and what happens when it’s no longer needed?
The EU will be the prime testing ground for blockchain when it comes to privacy, but it will be a few years until we fully understand whether the process will be beneficial in the long run. Under the new General Data Protection Regulation (GDPR), EU companies and international businesses that partner with them will be required to maintain unusually stringent data protection practices. Though data encrypted through blockchain may not be sitting around in file cabinets or on hard drives like data today, companies will still be forced to reckon with what happens to our documents when we try to make them more secure by increasing their permanence.