How Does Blockchain Support Data Privacy

Over the past few years, digital technology advancements have raised fresh concerns about data security and privacy. As a result, hacking, data theft, and other violations of online privacy are spreading rapidly. Thankfully, Blockchain data protection offers a creative and economical answer to all of these issues.

The majority of blockchains and decentralized ledger technologies (DLTs) arrange users’ data in accordance with security norms and allow them total control over it. In addition, data privacy in Blockchain is immutable because the data is stored on blocks and connected in a sequential manner, making it hard for hackers to modify them.

A mechanism called blockchain guards against data corruption. The primary purpose of Blockchain is to support data privacy, and hence, the security of data in this domain is increased. In a nutshell, this security is accomplished by making the data stored in the Blockchain transparent and permanent. This is done by distributing and redundantly storing each record over a broad network of nodes.

The fact that distributed ledger technology permanently saves data is one of its most important features that connects Blockchain and data privacy. A documented event or transaction cannot be changed or falsified. This allows for a completely new level of openness and, consequently, protection.

This article explores the various ways that blockchain technology supports data privacy and integrity.

How Blockchain Supports Data Privacy?

Personal and commercial data privacy has become a major issue in recent years due to cyber breaches and hacks. Therefore, let’s examine how we can use Blockchain to protect personal data and promote data privacy.

Decentralized Identity

As we interact with various platforms, our digital identities develop naturally. Additionally, additional information, including records of personal data and online behavior, keeps associated with this identity over time.

The associated data may also include usernames, passwords, internet search and shopping histories, medical information, and more. The identification may be anything, like the IP address of your device. The user has no control over what information should or should not be made public for the firms and organizations to view because this digital identity is not maintained on any personal databases.

Decentralized identification, a self-sovereign identity built into the Blockchain privacy by design, can be used quickly and simply to overcome this issue (DID). It is one of the leading advocates of Blockchain data protection, with a strong emphasis on enhancing data security and privacy.

DID enables users to save their data autonomously from the databases of the web pages they visit. Instead, content is stored on personal devices like PCs, smartphones, offline hard discs, and cloud storage. They can then deposit the links to this data on the Blockchain, which companies can use to verify user claims about their personal details.

For various purposes, a person may create numerous DIDs, each of which will be secured by a private key. The private key owner can only establish the stored data’s integrity. It functions remarkably similarly to email address verification.

The website may require you to authenticate your digital identity by providing security keys to the specified email when you attempt to sign up for an account on a gaming platform using that email address. The main distinction is that DID will solely belong to the user, not the email server, and they will have control over what information is shared when we use Blockchain to protect personal data.

Also read: Top 12 Blockchain Programming Languages

Blockchain-Federated Identity

DIDs and decentralized databases can assist users in maintaining the privacy of their personal information while also enhancing security against hacker attempts. The information gathered by several platforms is typically kept on a single centralized database or server. Users of the system are also given a digital identification known as federated identity.

Users can quickly switch between several platforms because of this identification. It can also be utilized to access the server’s data and use the platforms’ services. In addition, a federated identity framework is made possible by an authentication protocol called single sign-on (SSO). SSO enables users to log into all associated websites and applications using a single set of credentials.

Although this approach simplifies the process overall by eliminating the need for users to remember unique passwords for each application, it significantly reduces data security. Take a healthcare system, for instance, which may include a number of businesses, including pharmacies, hospitals, urgent care facilities, and insurance companies.

The records from each entity are held on a single central SSO-protected database that a third-party provider oversees if the system adheres to conventional user data management principles. Such systems will be more susceptible to hackers because an intruder only needs to get past one security barrier to access all the data that has been saved.

The decentralized structure of Blockchain data protection ledgers provides prospects for more effective implementation of federated identification and SSO protocols. For instance, users’ identities can be determined and verified by system members in a Blockchain and data privacy network without the assistance of a third party.

Additionally, the identities and data will be far safer than they are in a centralized database because of the irreversibility of Blockchain privacy by design. Additionally, the blockchain-based federated identity architecture will let users employ smart contract audits to manage how much of their data will be available to different businesses. Additionally, it enables companies and organizations to monitor the operation of the entire network.

Zero-Knowledge Proof

A cryptographic technique called zero-knowledge proof verifies the accuracy of information without jeopardizing the user’s privacy or control. This method involves neither transferring nor disclosing any data as the user (prover) seeks to convince the validator (verifier) that a particular piece of information is accurate.

Consider a store that sells tobacco. Smokers who want to purchase cigarettes must provide identification proving they are 18 or older. One method is to have the verifier see your driver’s license. However, the driving license includes more personal data than necessary, such as gender, name, height, home address, etc. If made public, this information might be taken or exploited.

Alternatively, the verifier can employ mathematical codes to validate their age using zero-knowledge proofs. For example, the state can do this by entering the license numbers of everyone at least 18 years old and a driver’s license onto the Blockchain at the moment of issuance. These people will then encrypt their fingerprints to the corresponding license numbers.

In the previous example, the prover might just give their fingerprint to the hash generator when buying cigarettes. The verifier can determine if the given biometric is associated with any 18 years or older license on the Blockchain data protection.

As a result, the prover’s legal age can be confirmed without disclosing any critical personal information. In addition, decentralized ledger technologies often use one of two primary categories of zero-knowledge proof techniques: interactive or non-interactive.


Interactive protocols are the most often used zero-knowledge protocols. The verifier must solve a sequence of algorithmic puzzles that the verifier presents. The only way the prover can crack these codes is if it genuinely has the data it says it does.

Also read: How To Build A Crypto Trading Bot


Businesses and enterprises have been increasingly converting to digital platforms and digital databases since the advent of the World Wide Web. As a result, a staggering 2.5 quintillion bytes of data are produced every day by the 5 billion people who use the internet on a daily basis. Almost every industry and field has noticed this tendency.

By the end of 2022, almost 60% of the world’s GDP is anticipated to be digital, erasing the distinction between the actual and digital economy. In the meantime, the rapidly evolving Blockchain data protection offers data management and storage options that were never thought possible. Moreover, with the use of Blockchain to protect personal data, we can create moral data standards that guarantee the privacy and protection of user data are never jeopardized.


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