Bundesblock Paper: GDPR is Outdated from the Beginning Because it Did Not Consider Decentralized Technology

On May 25th 2018, the General Data Protection Regulation (GDPR) entered into force. GDPR is a EU law on data protection and privacy for individuals – an area of profound importance in the digital universe. GDPR seeks to give more control to EU citizens over their personal data. Because most tech firms are international in nature, by default this has impacted big tech, and more, globally.

But the regulation was crafted in 2016. In this brief period of time, much has changed and the rise of decentralized ledger technology (DLT or blockchain), has already altered the regulatory landscape that GDPR seeks to manage. In recognition of this fact, Bundesblock (Blockchain Bundesverband), a Germany based blockchain advocacy group, has released a Position Paper on potential improvements to GDPR.

The authors note that Germany has emerged as a home to some leading blockchain companies and enabled an innovative and supportive ecosystem. But some blockchain firms have apparently limited their activities and expressed concerns regarding the application of the GDPR. Bundesblock says a leading blockchain company based in Berlin decided to abandon efforts to create a product that would provide “know your customer” (KYC) and anti-money laundering (AML) services to other blockchain companies because of their fear of the impact of the GDPR. This decision was made, in part, because of concerns that those services might not comply with the GDPR. This is despited their belief that their products may improve users’ privacy. There are more examples.

Bundesblock says that GDPR may undermine the ability of German, and European, blockchain companies to compete as the DLT race heats up. They say it’s time to act now and “enable the Blockchain ecosystem to actually build the decentralized platforms that will enhance users’ data sovereignty.”

Bundesblock recommends changes to GDPR that may impact the blockchain ecosystem. These changes address the following sectors in both permissioned and permissionless iterations:

  • Nodes or Miners
  • Wallets
  • Services and application
  • Developers of blockchain protocols
  • A governance body
  • Permissioned users

You may read all of their recommendations here.

Bundesblock will initiate a code of conduct for blockchain tech at some point in the near future as they strive to grow as a leading voice for blockchain innovation.


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