Bitcoin News — Research
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UK university researchers find that private blockchains with a sufficient level of centralization could comply with recent EU privacy rules.
Private blockchains, such as interbanking platforms set to share information on customers, could be compatible with new E.U. privacy rules, according to research published Nov. 6. The study was conducted by Queen Mary University of London and the University of Cambridge, U.K.
The General Data Protection Regulation (GDPR) act, a recent legislation that regulates the storage of personal data for all individuals within the European Union, came into effect this May. According to the law, all data controllers have to respect citizens’ rights in terms of keeping and transferring their private information. In case a data controller fails to do so, the potential fines are set as €20 million (about $22 million) or four percent of global turnover/revenues, whichever is higher.
The recent U.K. study, published in the Richmond Journal of Law and Technologies, views blockchain and its nodes through the length of GDPR. According to the researchers, crypto-related technologies could fall under these rules and be treated as “controllers,” given that they publicly store private information about E.U. citizens in the chain and allow third parties to operate it. This, the study reveals, might slow down technology implementation in EU:
“There is a risk that this legal uncertainty will have a chilling effect on innovation, at least in the EU and potentially more broadly. For example, if all nodes and miners of a platform were to be deemed joint controllers, they would have joint and several liability, with potential penalties under the GDPR.”
However, the researchers emphasize that blockchain operators could be treated like “processors” instead, the same as the companies behind cloud technologies who act on behalf of users rather than control their data. This, the study continues, is mostly applicable for Blockchain-as-a-Service (BaaS) offerings, where a third party provides the supporting infrastructure for the network while users store their data and control it personally.
As an example for such type of blockchain platform, the researchers cite centralized platforms for land registry and private interbanking solutions that set up “a closed, permissioned blockchain platform with a small number of trusted nodes.” Such closed systems could effectively comply with GDPR rules, the report continues.
To meet the privacy law, blockchain networks might also store personal data externally or allow trusted nodes to delete the private key for encrypted information, thus leaving indecipherable data on the chain, the researchers state.
However, the GDPR rules are extremely difficult to comply with for more decentralized nets, such as those concerned with mining and cryptocurrency. In this case, the nodes, operating with the data of E.U. citizens, might agree to fork a new version of the blockchain from time to time, thus reflecting mass requests for rectification or erasure. “However, in practice, this level of coordination may be difficult to achieve among potentially thousands of nodes,” the study reads.
As a conclusion, the researchers urge the European Data Protection Board, an independent regulatory body behind GDPR, to issue clearer guidance on the application of data protection law to various common blockchain models.
As Cointelegraph wrote earlier, the GDPR could both support and harm blockchain. Despite the fact that current E.U. legislation partially has the same goals as crypto-related technologies, such as decentralizing data control, blockchain companies could also face extremely high fees as data controllers.
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Chinese e-commerce giant JD.com has partnered with two technology institutes to launch a blockchain research lab to examine new applications of the technology.
Chinese retail giant JD.com is further gaining a foothold in blockchain technology by launching a research lab for blockchain in partnership with two technology institutes, according to an announcement published Oct. 30.
Jingdong Group (JD.com) is a leading Chinese e-commerce company, controlling roughly 30 percent of the business-to-consumer online market in China with 314 million active users, according to Financial Times. The company focuses on implementation of new technologies in e-commerce, delivery services, and finance.
Per the announcement, JD has collaborated with the Ying Wu College of Computing at the New Jersey Institute of Technology (NJIT) and the Institute of Software at the Chinese Academy of Sciences (ISCAS) to establish a blockchain technology lab. The lab will be geared towards solving efficiency problems and examining new applications for the technology.
Among other objectives of the lab, JD cites long-term joint research efforts in fundamental consensus protocols, privacy protection, and security in decentralized applications (DApps). Zhong Hua, deputy director of the Software Institute of the Chinese Academy of Sciences, stated that “through this partnership we will bring about blockchain innovation and promote industrial applications of blockchain technology.”
Last month, JD established the Smart City Research Institute at its headquarters in Nanjing aimed at facilitating the development of “smart city” construction with the use of artificial intelligence (AI), big data, and blockchain technologies. The Institute will reportedly influence “the entire East China region” and aims to reduce industry costs and increase efficiency.
In August, JD revealed its new Blockchain-as-a-Service (BaaS) platform dubbed JD Blockchain Open Platform. The new product is designed to help commercial customers to build, host and implement blockchain solutions without having to develop the technology from scratch.
Moreover, in August the company revealed plans to issue asset-backed securities (ABSs) on a blockchain in conjunction with Huatai Securities and Xingye Bank. Within the collaboration, the partners would purportedly assess blockchain’s potential to improve asset security.
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A new report from climate change scientists has raised concerns regarding Bitcoin’s carbon footprint and its potential future impact on global warming.
The report extrapolates existing data for Bitcoin’s electricity consumption together with various projections for the cryptocurrency’s adoption in coming years.
According to the report, in 2017, out of a rough total of 314.2 billion cashless transactions, Bitcoin’s share is estimated to have been around 0.033 percent. While acknowledging that “accelerated growth” is common at the early adoption stage of new technologies, the report nonetheless claims that even if Bitcoin follows a lower-level “median growth trend,” it could come to equal the global total of cashless transactions “in under 100 years.”
Should this materialize, cumulative emissions of Bitcoin usage would “cross the 2 C threshold within 22 years” if its adoption rate is similar to some of “the slowest broadly adopted technologies,” or within just “11 years” if adopted at the fastest rate of adoption. The carbon footprint forecast assumes that the fuel types used to generate power today will remain “relatively fixed” in future years.
For Bitcoin’s current carbon footprint, the report references recent research from Digiconomist calculated “on the assumptions” that:
“60 percent of the economic return of the Bitcoin transaction verification process goes to electricity, at $0.05 per kWh and 0.7 kg of carbon dioxide-equivalent (CO2e) emitted per kWh, [resulting in an] estimate that Bitcoin usage emits 33.5 metric tons of CO2e annually, as of May 2018.”
While refraining from predicting Bitcoin’s “fate,” the scientists suggest that economic logic will prompt miners to migrate to areas with low cost power supplies, therefore proposing that “electricity decarbonization could help to mitigate Bitcoin’s carbon footprint — but only where the cost of electricity from renewable sources is cheaper than fossil fuels.”
Should energy costs remain high, more efficient hardware may help reduce its footprint, the report concedes, yet advises against relying on “yet-to-be-developed hardware.” It instead proposes “simple modifications to the overall system, such as adding more transactions per block or reducing the difficulty or time required to resolve the proof-of-work” in order to “immediately” reduce Bitcoin’s electricity consumption.
Not all energy experts concur with the common perception that high energy consumption is an “Achilles Heel” for Bitcoin. A report published in August critiqued the exclusive focus on mining’s energy-intensivity, emphasizing the importance of where the energy is produced and how it is generated, arguing that “electricity production can increase while still maintaining a minimal impact on the environment.”