Data Privacy Forum Africa 2019

“The rave around Blockchain is premised on pseudonymisation protocols that allows data subjects to control their personal data and that’s such an important topic in privacy and data protection. The purpose of the workshop: to cover the basics of Blockchain and how the technology will impact the privacy arena.”

This was presented to Privacy Professionals, in an attempt to prepare them for the future that Blockchain  could present in their profession.  The explanations provided here are purposefully simplified to ensure basic understanding.

Brave new world:

Before we get into the possible impacts that Blockchain and Crypto Currencies have on Privacy, we need to debunk some myths. I hear these all the time, and it is important to deal with each of these upfront.

  1. Blockchain is a Criminal Background
  2. Blockchain is a bubble
  3. The cost of a Bitcoin transaction is equal to that of running a small country
  4. Blockchains get hacked ‘all the time’

Criminal Intentions:

Once upon a time, there was  a bad man, who found that he could hide information on the internet…. This news quickly spread, and the dark web became a haven to those who had illicit desires, and those willing to sell to them.  The Silk Road remains one of the most notorious sites on the dark web.  With the advent of Bitcoin – a nearly anonymous method of payment – it became just that much easier.  It took a while, but the owner Ross Ulbricht‎ was finally caught, and sentenced.

Bubble?

 We have heard that Bitcoin is a bubble for the last ten years.  The truth is, Bitcoin has consistently grown from zero to 3900 USD over the last couple of years.  There have been ups and downs, but each down is higher than the previous, giving a powerful and positive upward slant.

Is Blockchain a bubble?  Or a FAD?  Nope!  Blockchain is today, where the internet was in the mid 90’s.  We cannot even begin to imagine the eventual uses for blockchains.  Today we have techies and futurists getting excited about it, but wait for it…. This is going to change the world!

Cost of Bitcoin Processing:

There has been a lot of criticism of the energy consumption used on the Blockchain.  It is important to note that the foundation of Blockchain and Bitcoin is called “proof-of-work”. This means that more than one ‘person’ is validating a transaction, and blocks are created at a cost.  The power consumption for creating millions of Bitcoins is actually negligible, if one had to consider the cost of printing, distributing and managing FIAT.

Blockchain gets hacked all the time!

This is my favourite, non-nonsensical statement. One of the biggest plus factors, in my opinion, is the fact that a public Blockchain is not hackable.

There are however, numerous scams and get-rich-schemes to catch unsuspecting investors, and unscrupulous exchanges with sub-standard security are prone to being hacked.  Neither of these are specifically Blockchain related, but rather relate to Crypto-currency.

When blockchain is used as it was intended, it is safe, unchangeable, unhackable, distributed, public, and encrypted. Only when the application of a blockchain breaks one of the above fundamental criteria, does it become unsafe.

Below is a graphical depiction of the practical South African use cases which exists for Blockchain today:

As can be seen from the above, the applications’ range is wide, and there are already clear market-leaders out there.  The industries and sectors being impacted are mostly in the Financial Services landscape, but Education, Production and Gaming are starting to catch up.  World-wide, we are seeing the Blockchain ecosystem explode with new uses.  Some are great, some not so much.

How can Blockchain impact Privacy?

As Privacy professionals, we need to start examining what exactly Privacy means, and what role we have to play going forward.  Questions to ponder:

  1. Is Anonymity the same as Privacy?
  2. Is our priority to protect the consumer? Or to regulate them?
  3. Or is our priority to protect corporates against regulatory findings?
  4. How do we control AML in an anonymous (or at least pseudo-anonymous) world?
  5. What is the true value of KYC? And how do we ensure we truly know?
  6. How will BCBS and SOX Reporting be impacted?

As Privacy Professionals, what will our responsibility look like in the future?

Contact us for more information about how you can leverage off Blockchain technology to take your data privacy to the next level!