O blockchain It is a technology that has gained popularity in recent years, mainly with the enactment of the LGPD (General Data Protection Law), which came into effect in Brazil in 2020, and the use of information for financial procedures.
However, despite blockchain being a highly efficient system, concerns about the transparency of information and data still prevail, which is justifiable, especially given the dangers of cybersecurity.
In today's article, learn what blockchain is and the challenges posed by the LGPD (Brazilian General Data Protection Law). Keep reading!
What is blockchain?
In short, blockchain is a system that tracks, sends, and receives certain types of information on the internet, especially financial information. In other words, the technology uses pieces of online code that carry interconnected data.
In this way, blocks of information are formed that interconnect in a kind of chain – hence the name blockchain.
Through this system, it is possible to transact digital currencies or cryptocurrencies, such as bitcoins.
Blockchain is typically used by various types of digital businesses that accept cryptocurrencies, and is a recommended system for... electronic security company to guarantee the authenticity and protection of the data.
With the implementation of blockchain technology, users have greater security when sending information, preventing it from being used by malicious individuals, such as... hackersThe same applies to companies.
What are the advantages of blockchain for businesses?
The way blockchain works is quite simple. Each block has its own information, which is linked to the next block and the previous one, repeating the process successively.
In other words, it's difficult to change the data because there's validation in each block. Therefore, for a transaction to be confirmed, it needs to be validated by more than 50% of the entire blockchain. Otherwise, it's rejected.
For this reason, the technology is seen as one of the safest in the online world, being used by accounting firms, commercial segments, digital ventures, among others.
Among the main advantages of blockchain for companies, the following stand out:
- Greater transparency in information;
- Greater accuracy in forecasting and planning;
- Greater security in sending and storing data;
- Greater protection against fraud.
It is worth highlighting that blockchain is also important for user security and privacy. Due to the difficulty of chain mutation, cryptography ensures the inviolability of information.
To better understand, this means that when data is inserted into a block, it is not only stored but also encrypted.
Therefore, if a user provides data to a temporary staffing companyFor example, this information remains completely secure. This follows the principles of the LGPD (Brazilian General Data Protection Law).
Data privacy on the blockchain and the requirements of the LGPD (Brazilian General Data Protection Law).
Data protection and user privacy are important issues for any type of business. This is because companies can wield significant power when handling this information.
Therefore, with blockchain, no company will share its commercially sensitive data with partners unless it can gain a competitive advantage and up-to-date information.
This even applies to accounting consulting firmsGiven this scenario, it is necessary to follow some basic rules for data sharing.
Although the argument for transparency is central to the defense of blockchain, it's clear that this visibility isn't advantageous for all managers. After all, much information must remain confidential, such as business models, actual demand levels, etc.
This information is disclosed only to regulatory bodies or government oversight agencies. In other words, it should not be made available to the general public.
For this reason, when installing a system ERP for small businessesFor example, many managers take this aspect of information reliability into account to avoid sharing revealing data.
But how does this fit into the LGPD (Brazilian General Data Protection Law), given the issue of data immutability? Well, the law does not consider decentralized systems.
This means that legal data protection compliance requirements may discourage the implementation of blockchain, especially if they are not properly understood. In a way, the drafting of the regulations did not take new technologies into account.
Therefore, managers should keep in mind that data protection laws were created based on centralized systems – while with blockchain, the process is decentralized.
Therefore, legally determining how data should be processed in a blockchain architecture is not so simple. Furthermore, ensuring the rights of data subjects, according to the LGPD (Brazilian General Data Protection Law), can be challenging for blockchain technology.
For this reason, be a company specializing in civil constructionWhether for blockchain technology or any other business model, it's important to evaluate whether implementing blockchain is truly advantageous, or if exploring other technological alternatives would be worthwhile.
4 technological solutions for data storage and processing
Given these challenges, many businesses are evaluating whether it is truly worthwhile to implement blockchain in their data storage and processing methods.
However, it is possible to find other technological solutions that meet the requirements of the LGPD (Brazilian General Data Protection Law), avoiding any legal problems for businesses. Below, we have listed some of them:
1 - Hash of blockchain
A simple way to prevent personal or business data from being openly shared on the blockchain is to not record it. After all, not all information actually needs to be on the blockchain.
This is a solution typically implemented in ERP systems. This allows the company to choose which information it wants to store outside of its own database, potentially placing it on its own centralized networks.
For example, imagine that a building management company This information includes the number of delinquent residents in a particular condominium. These details cannot be shared with the public and must therefore be kept private. off-chain (outside of the blockchain).
Another alternative is to put the data in hash using the blockchain, keeping this information hidden and confidential.
According to the LGPD (Brazilian General Data Protection Law), personal data should only be stored for as long as necessary to achieve the purposes for which it was collected. Thus, the use of hash It's a simpler way to bring your company into compliance with regulations.
2 – Selective data obfuscation
Here, the intention is to implement access controls directly on the blockchain. This can be done by opening private chains, so that transactions remain confidential and hidden from the rest of the blockchain.
Another way to selectively obscure this data is by implementing access controls using codes. This can be an interesting alternative for... accounting firm for micro-businesses, which handles confidential customer data.
According to the LGPD (Brazilian General Data Protection Law), access controls can solve the challenges generated by open blockchain, since only authorized users can access the information.
Ultimately, although blockchain maintains security against data breaches, after the information is registered in the system, it is still necessary to deal with the addition of defective or fraud-prone data.
3 – Zero Knowledge-proof
O zero knowledge-proofProof of knowledge, also called "proof of knowledge," is a cryptography concept that allows the validation of a statement without revealing data that makes it true or false.
This technology is based on an algorithm that runs a statement through tests until the probability of the statement being false is significantly low.
Zero-knowledge-proof is considered one of the most promising features of blockchain, being recommended for lower-volume transactions that need to guarantee data privacy.
4 – Fully Homomorphic Encryption (FHE)
O Fully Homomorphic Encryption (FHE) is a computing method that uses mathematical calculations for data encryption. In this way, the information is obfuscated, even on a blockchain.
However, FHE is somewhat slower than the other technologies, especially when compared to... zero knowledge-proofHowever, this method is considered one of the most efficient and secure, complying with the recommendations of the LGPD (Brazilian General Data Protection Law).
Conclusion
Blockchain is a very efficient data storage and processing technology; however, not all companies agree with the transparency of this system, since it is necessary to keep certain data hidden from the public.
Furthermore, with the recent enactment of the LGPD (General Data Protection Law), it is necessary to take certain precautions to comply with the recommendations of the law, especially regarding the confidentiality of information.
Today's article aimed to illustrate the challenging relationship between blockchain and the LGPD (Brazilian General Data Protection Law), as well as to present some alternatives to further improve data protection for compliance with the law and the security of companies.
This text was originally developed by the blog team Investment Guide, where you can find hundreds of informative content about various segments.
