How does Blockchain Be Used to Handle Personal Data Sharing?
Blockchain transactions allow users to control their data via public and private keys, allowing them to own it. External intermediaries cannot misuse and obtain data. If personal data is there on the blockchain, the owner can control when and how a third party can access it. In blockchains, the logs automatically include an audit trail that ensures the accuracy of transactions. Regulating the data has been made easier with the use of Blockchain technology for users. Since blockchains are decentralized and allow any node to access transactions, user events and actions are transparent. Blockchain technology platform protects and authenticates transactions and data through encryption.
Private keys provide a way to prove ownership and control of the cryptocurrency. If one has access to another’s private key, he can access and spend these funds. Since private keys are critical for accessing and protecting assets on the blockchain, users need to store them securely. Storing the private key on a computer, flash drive, or phone can present potential security risks if the device is stolen or hacked. If such a device is lost, the user will no longer have access to the cryptocurrency. Storing on a physical medium, such as a sheet of paper, also makes the private key vulnerable to theft or damage.
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Data Protection Challenges
From the data owner’s point of view, the problem of personal data protection is threefold:
- Lack of ownership
- Lack of transparency
- Security breaches
Blockchain Protects Personal Data
Businesses store vast amounts of Personal Identifiable Information (PII) on customers and employees. As a result, phishing schemes target human resources to gain access to valuable employee data.
Blockchain gives control of personal data to the owner. In the past, people didn’t know who was using their data or how. The consent has been made mandatory for purposes such as analytics and profit by The European General Data Protection Regulation (GDPR). The owners have gained control, and the blockchain protects personal data. A distributed ledger replaces a central database. Imagine creating a “wallet” to store personal information and transact with digital currencies.
For example, when a site asks for your data, it is not necessary to enter it. Instead, grant third-party access to your wallet for a defined use during a specific period. The third party obtains your permission to watch but does not store your information.
Take back control of your PII
The blockchain contains an audit trail that allows users to see how a third party uses your data. Also, it lets them revoke access. That control returns the power of the data (and the benefits of it) to individual users.
Recording all the transactions and maintaining a permanent and unalterable record of the transactions is done in the general ledger with Blockchain Technology. Therefore, the possibility of fraud is not there.
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Consider an employee’s career. If they had multiple employers, each employer has stored this employee’s data over the years. Data types include identification, work permits, performance reviews, completed training, certifications, job changes, salary increases, etc.
When an employee changes jobs, the new employer stores all the information and then aggregates it; then it is their responsibility to keep this data safe, not using it for purposes other than consent and deleting it according to the terms.
Reduce the instance of Inaccurate Data
An employee file stored on blockchain technology reduces the possibility of inaccurate employment information from the employee or a third party. The blockchain is verified & the encryption prevents any retroactive manipulation.
As data integrity is crucial, a fake certificate may seem official, but the technology recognizes the inconsistencies and classifies them as false. When trust resides in a centralized service provider for storing and managing all data, it is difficult to mitigate the various risks. The employee controls the amount of information to be provided. Employees choose to share only the title itself or the underlying grades.
Add Persistence to Data
Another advantage of blockchain is that the information is permanent. Although a business or school may cease to exist, once the record is verified and created on it, it is forever part of the employee’s story.
However, blockchain data is always immutable. It could be a challenge when adopting blockchain as part of the solution. Data on a blockchain cannot be removed or altered. The only exception is the addition of new information. In these cases, the distributed ledger ensures that all nodes must verify a transaction.
Once the employer-employee relationship has ended, access to data can be revoked (by law).
User data from the repository is converted into an open data format and shared through a stream on the blockchain so that other nodes can process and use the data efficiently. The smart contract verifies and executes the approved terms of using the data and transfers the digital tokens as a return to the user. The smart contract enforces a double deposit guarantee to ensure that all participants are acting honestly.
The overall technology ensures that actual user data is never exposed. User data is encrypted and encrypted before being uploaded to off-chain storage. Data owners in their client applications can store it directly in off-chain storage. The terms and conditions regarding access to user data are encoded in a smart contract with metadata and hashing of the data and published on a blockchain platform (Ethereum). Data hashes on the blockchain prevent middleware from manipulating the data. Content-based addressing causes the hashes of the data to act as an identifier for retrieval. When the data consumer invokes smart contracts to access user data, only the correct invocation of it results in the liberation of its key for decrypting the user data. With a wide variety of applications, the blockchain platform establishes secure networks.
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