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How does Blockchain Support Data Privacy

How does Blockchain Support Data Privacy

Data privacy has become one of the most popular topics in information security over the last few decades. The phrase “data is the new oil” is probably familiar to you. Data is now fueling a growing number of businesses. The level of quality and quantity of your data affects everything from personalized customer experiences to automated marketing messages to science-based insights. It makes sense that companies are eager to collect data. On the other hand, lawmakers are passionate about ensuring people’s security and privacy.

Businesses frequently face challenges when dealing with data privacy regulations, such as Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). To safeguard sensitive personal data, these regulations demand strict access controls.

Blockchain technology transforms how data is stored, shared, and monetized across industries, including logistics, finance, and retail messaging. Blockchain networks are revolutionizing numerous sectors.

Decentralized data management is one of the more novel applications of blockchain technology. This includes distributing the responsibility for data management across a network of machines.

This article explores how blockchain technology promotes data privacy and integrity.

What is data privacy?

What is data privacy?

Properly managing personally identifiable information (PII), such as names, addresses, Social Security numbers, and credit card numbers, is typically called data privacy. The concept, however, also applies to other valuable or secret information, such as financial information, intellectual property, and private health data. In addition to the regulatory requirements of various governing bodies and jurisdictions, vertical industry guidelines frequently govern data privacy and data protection initiatives.

Data Privacy Concerns

Despite increasing concern regarding data collection, the practice has been expanding. Over the last year, 70% of the companies studied by KPMG increased their gathering of private consumer data. 75% of business leaders surveyed said they are comfortable with the amount of data their company collects, and 95% said their business has robust data protection safeguards in place.

Even in businesses that collect data, there are worrying signs. 62% of the business executives polled thought their organizations should take more steps to protect consumer data. A third of them believed that customers should be more concerned about how their company uses their data, and 29% acknowledged that their company occasionally used unethical methods to gather sensitive information.

People are becoming increasingly suspicious and concerned about collecting their personal information. 86% of those surveyed said they have growing concerns about data privacy, and 78% expressed uneasiness over the volume of data being gathered. In the survey, 13% of consumers said they didn’t trust their employers, and 40% said they didn’t trust businesses to use their data ethically.

Consumers are concerned about many issues, including the possibility that their data may be compromised or sold to third parties and data collection itself. In comparison to 51% who were worried about their data being sold, 47% of respondents said they were concerned about the possibility of their data being hacked. Ironically, only 17% of the business executives polled said their company sells data to third parties. This shows that businesses need to be more open about this practice to help alleviate consumer fears.

According to Orson Lucas, KPMG’s U.S. privacy services leader, the gap between business and consumer sentiment has existed for a while. However, it continues, indicating that companies still have a long way to go to gain the public’s trust in their data collection, use, and safety practices. Please eliminate this gap to avoid losing access to the crucial information and insights that fuel growth.

People are less willing to share personal information as concerns about data collection increase. 30% of the consumers who responded to the survey said they would keep their data private from companies. Just 12% of respondents said they would share data to make ads more relevant, and 17% said they would share data to help businesses improve their goods and services.

Despite their concerns, consumers are open to providing data in particular cases. While 52% of respondents were okay with businesses recording calls for training and quality purposes, 57% said that using technology that recognizes faces in criminal investigations is acceptable.

Challenges in Data Privacy and Protection

Challenges in Data Privacy and Protection

Here are a few issues connected to safeguarding user data that we must resolve.

1. The Growth of Data is Exponential

Data is expanding more quickly than ever. Every second, new data is produced at over 1.7 megabytes. Organizations must continue to protect sensitive personal information as well as the personal information of their customers. A public tracking website for data breaches, Breach Level Index, reports that since 2013, nearly 9,198,580,293 data records have been lost or stolen.

Over the last decade, data has increased exponentially, but poor security practices have kept businesses in danger of a data breach. One of the most severe issues in data privacy is the protection of personally identifiable information (PII). The volume and accuracy of data in our technologically advanced world make it difficult to manage millions, if not billions, of data records.

2. Cost of Maintaining Data Privacy

Businesses can lose millions of dollars in revenue due to a data breach. The Ponemon Institute calculated that a breach’s average cost in 2017 was $3.62 million. Additionally, over the next two years, there is a 30% chance that an organization will suffer a data breach. An organization that violates the law will be subject to severe regulatory penalties from several organizations. For instance, businesses using or operating in the European Union that experience a significant breach due to a lack of security controls may be subject to fines of up to 4% of adjusted gross revenue or €20 million (whichever is greater).

3. The Number of Open Vulnerabilities

CVE, a reliable source for information security flaws, reported that in 2017, there were almost 15,000 disclosed flaws. Compared to all of 2016, this is a more than 56% rise.

There have also been a record-breaking number of public data theft due to the rapid increase in vulnerabilities. In the first half of 2017, Dark Reading discovered more than 1,254 data breaches.

Managing thousands of patches released each year can be overwhelming for an IT security administrator. You must have a solid patch management process or template in place and an understanding of patch management best practices.

4. An Advanced Technology Landscape – IoT and Mobile

4. An Advanced Technology Landscape – IoT and Mobile

Internet of Things security is undoubtedly a top concern for all security experts. According to a recent study, IoT security concerns 90% of information security professionals more than network security.

Although the number of connected devices sold is increasing at an unstoppable rate, IoT resellers do not routinely release security vulnerability patches for these devices.

Security professionals must review BYOD policies in light of IoT, create an IoT readiness plan, and scan the network to find all IoT devices linked to it. Finding malicious activity on your web, in your applications, and your data requires constant network monitoring using IDS/IPS, SIEM tools, and other advanced security analytics.

5. Human Error Creates a Level of Complexity

Simple human mistakes can significantly impact the privacy and security of your data. According to many security analysts, the biggest problem with data privacy and security is human error. Employees who lack knowledge or are uninformed have the potential to use weak passwords, accidentally delete data, fall victim to phishing scams, have access to privileged accounts, and browse websites that are not appropriate for their position. Your team of security professionals should develop a program for security awareness and training that gives your employees more responsibility and lowers the risk. Additionally, you can use data loss prevention tools to stop end users from unintentionally or intentionally leaking sensitive information.

How does Blockchain support Data Privacy?

How does Blockchain support Data Privacy?

Overview of blockchain technology

Blockchain is a distributed ledger technology (DLT) that uses a network of peer-to-peer computers to store data. This implies that information is not owned or controlled by a single party to a transaction. Every participant in the network has the potential to have equal rights when managing and verifying transactions. In contrast, a traditional bank owns and keeps all the data transferred during a transaction.

Now let’s look at how Blockchain technology protects the user’s and their data’s privacy and security.

Decentralized Identity

Today’s devices, apps, and services connect almost all our digital identities. Service providers control these digital identities and the associated digital identity data.

Users are now experiencing personal data misuse and breaches that impact their social, financial, and professional lives.

Users’ ability to manage their data and withdraw access to their information is 

also affected when they grant access to numerous third-party or service providers from various applications. For users to address these issues, their digital identities must be theirs to own and control, preferably from a single source.

A self-sovereign identity built into the blockchain, known as a decentralized identity, can quickly solve this problem (DID). It is one of the leading advocates of this technology and is focused on improving data security and privacy.

Blockchain identity management systems could help eliminate problems like Inaccessibility, Data insecurity and Fraudulent identities.


Around the world, 1.1 billion people lack an identity card, and the poorest 20% of the population make up 45% of those who lack identification. Over a billion people remain outside conventional identification systems due to complex identification paperwork procedures, costs, access issues, and a need for more knowledge about personal identity. With physical identities, it is possible to register for classes, submit job applications, obtain passports, or use many government services. To access the current financial system, you must have an identity. On the other hand, 60% of the 2.7 billion unbanked people already own mobile phones, opening the door for mobile identity solutions based on blockchain technology that better meets the needs of vulnerable citizens.

Data Insecurity

Our most essential identification data is currently kept in centralized government databases supported by outdated software and has many single points of failure. Hackers are very interested in large, centralized systems that contain the personally identifiable information (PII) of millions of user accounts. According to a recent study, 97% of all breaches in 2018 involved personally identifiable information, making it the most frequently targeted data. 2.8 billion consumer information records were exposed in 2018, costing an estimated $654 billion, despite regulatory legislation and corporate efforts to improve cybersecurity.

Fraudulent Identities

The user’s experience of the digital identity landscape could be more cohesive. Users switch between multiple identities linked to their usernames on various websites. There is no standardized method for transferring data generated by one platform to another. Furthermore, it is relatively simple to create false identities due to the weak connection between online and offline identities. The phenomenon of counterfeit interaction, which can aid in the commission of fraud and result in inflated numbers and lost revenue, thrives in environments where fake identities exist. This vulnerability in society facilitates the creation and spread of evils such as “fake news,” which could threaten democracy.

Blocks and Hashing

Blocks and Hashing

On a blockchain, information is kept in blocks with a header, a body, a time stamp, and the creators’ signatures. Each block in the chain of data-containing blocks is connected to the block before it by a cryptographic hash. This ensures the system’s immutability and the blockchain data’s security.

Proof of Work

Proof of work is a Blockchain method or technique used to slow down the development of new blocks. Therefore, if someone tampers with the data of one block, they must recalculate the Proof-of-Work for every subsequent block in the chain. This makes it challenging for someone to tamper with a block.

By reducing fraud, the Blockchain network’s data is kept secure, and its integrity is preserved thanks to the collective forces of proof of work and hashing processes.

Zero-Knowledge Proof

Zero-Knowledge Proof

ZKP algorithms are cryptographic algorithms that calculate the possibility that a party in a transaction retains a piece of information without revealing what that information is.

It’s similar to trying to discover whether someone has visited a country. You can ask them several questions; if they answer correctly, you’ll know they’ve been to the country. The more inquiries they correctly respond to, the more confident you can be that they have visited the country. And more than just obtaining the information using another method. Even if you know they’ve been to the country, they don’t have to reveal the names of the people they’ve met there. You also don’t need to ask. It has no impact on the transaction. This is how we protect sensitive information.

ZKP algorithms produce a set of mathematical complexities that establish the recipient’s integrity when successfully solved by the receiving party. Three MIT researchers, Shafi Goldwasser, Charles Rackoff, and Silvio Micali, planted the seeds for zero-knowledge proofs in the 1980s. They proposed the concept of ‘Knowledge Complexity of Interactive Proof Systems’ at this time.

ZKP algorithms are classified into two types:

Interactive ZKPs:  Interactive ZKP algorithms require the receiving party to complete several mathematical tasks.

Non-Interactive ZKPs: Non-Interactive ZKP algorithms avoid requiring the parties to the transaction to communicate with one another or postpone the verification process.This necessitates the use of more computing resources.

Public Addresses

A private key and public address on each node add another layer of security and privacy to the blockchain. The only information shared when a node participates in a transaction is the public address, a combination of letters and numbers. People on the network can view the transaction and the letter-number combination, not the specifics kept in the private key.

Future Scope of Blockchain Technology

Future Scope of Blockchain Technology

Blockchain technology has a broad and bright future, with potential uses in many industries, including finance, healthcare, supply chain management, and more. Here are a few possible applications of blockchain technology in the future:

  • We can use blockchain to build decentralized financial systems, which would do away with intermediaries, lower costs, and increase transparency.
  • Blockchain can offer a decentralized, secure platform for managing digital identities, lowering the possibility of fraud and identity theft.
  •  Tracking products throughout the supply chain using blockchain, ensuring their authenticity, cutting down on counterfeiting, and boosting transparency is possible.
  • Medical records can be made secure and tamper-proof using blockchain technology, reducing medical errors and improving patient data management.
  • Blockchain-based voting systems can offer a transparent and secure voting process that support the fairness of elections.
  • We can use blockchain technology to build a decentralized platform for managing IoT gadgets, facilitating safe and effective device communication.
  •  Blockchain technology has the potential to completely transform the gaming sector by enabling decentralized gaming platforms, digital asset ownership, and independently verifiable game fairness.


Since more and more instances of businesses accessing and selling peoples’ sensitive and personal information for their financial gain, data privacy has become a hot topic. An example of an effort to protect user data privacy is the GDPR and other similar laws. They are, however, extremely slow and complicated. By decentralizing data and making it less accessible, blockchain has emerged as a savior and a step in the right direction for data privacy. Through its features, such as DID and its procedures for validation and encryption, blockchain can help protect the data.


1. How does blockchain support data privacy accenture?

According to the search results, Accenture and blockchain technology support data privacy by giving users access to private and public keys that they can use to control their data. Blockchain’s use of asymmetric cryptography enables this data ownership and control, in which each user has a distinct public and private key.

2. Which are the 4 basic principles of data privacy?

1. Notice/awareness, which entails informing individuals about the use of their data,
2. Choice/consent, which entails obtaining permission from the individual to use their data,
3. Access/participation refers to allowing individuals to access and edit their data
4. Security refers to protecting personal data from unauthorized access or disclosure.

3. What are the types of data privacy?

Personal data privacy refers to safeguarding an individual’s personal information, whereas business data privacy refers to preserving a company’s confidential information, trade secrets, and intellectual property.

4. What are examples of data privacy?

Two examples are encrypting sensitive information such as credit card numbers and obtaining explicit consent from users before collecting or using their data.

5. Does blockchain have privacy issues?

Due to its decentralized and cryptographic nature, blockchain technology provides data privacy. However, because the blockchain ledger is transparent, anyone accessing the blockchain network can view some information, such as transaction data. As a result, there may be privacy concerns in specific circumstances, such as when personally identifiable information is stored on the blockchain or when a user’s identity is connected to their blockchain address.

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