VIEWPOINT: Data Privacy in the Blockchain Era – Michael Smolenski, CEO and Founder of Lightstreams

Privacy, in the digital age, is a term that has been distorted to a mere simulacrum of its original meaning. To many, it vanished with the advent of the internet. ‘Online privacy’ is a falsehood – individuals are entirely reliant on the legal system and businesses to ensure that their sensitive information isn’t leaked.

Whilst it’s possible that an individual may never experience any problems with this, I believe that’s highly unlikely given the proliferation of data breaches in recent times. Moreover, ‘I probably won’t have this information compromised’ simply isn’t a good enough threat model to most, particularly when dealing with confidential personal or professional information.

The problem is a product of the technologies we’ve been using, in businesses and in the internet at large: these lend themselves to a highly-centralised topology, where third-parties (often with imperfect security measures in place) act as custodians for user data. The aggregation of this data into a single point of failure is simply a recipe for disaster should the server be compromised and, of course, the custodians are still able to access everything stored.

Blockchain technology has the potential to disrupt this ecosystem entirely. At its core is a distributed ledger that is both censorship-resistant and immutable, as well as not being owned or controlled by a single party. It allows for the trustless transfer of value, or, as we’ve seen with second-generation blockchains, the creation of self-executing smart contracts.

Blockchains in and of themselves do not solve the privacy problem – after all, they’re publicly-viewable (this is fundamental to their functioning), meaning that, overlooking the cost of storing information in large quantities, distributed ledgers are poor candidates for the storage of information that needs to retain a degree of confidentiality.

I think it’s wiser to look at blockchain technology as a mere layer in a stack which also comprises of off-chain storage. By using smart contracts on the base layer in order to govern permissions surrounding a decentralised storage medium like IPFS (which is cheap, scalable and confidential), a truly private means of owning and sharing data is within reach.

The implications of such a system could truly revolutionise the manner in which information flows. Ultimately, blockchain and decentralisation storage put individuals back where they belong – in the driving seat. Whether it’s for sharing data within a close circle, selling it on the open market (by requiring a requisite amount of tokens to be sent to a smart contract address before the IPFS volume can be accessed), or simply as a secure storage means, the suite of distributed tools, when combined, are poised to prompt a serious reconsideration of data privacy in the digital age.

Author: Michael Smolenski, CEO and Founder of Lightstreams

For more information about Lightstreams visit: https://lightstreams.network