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How Does Blockchain Support Data Privacy?

How Does Blockchain Support Data Privacy?

By Simon Patel
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In a world where privacy has become paramount and data leaks or government-related surveillance are a trade-in-stock, blockchain has emerged as an excellent solution to safeguard your most sensitive data.

Still, the promising tech is not a plaster for all sores. In this post, we’ll learn how blockchain supports data privacy, the security issues associated with blockchain, and the advantages of using private blockchains.

Are leaks and surveillance on the Internet that frequent?

Sadly, it is impossible to measure the magnitude of this catastrophe with any degree of accuracy. But yes they are. Even excluding the totalitarian states, there are numerous examples of how data is covertly collected by governments. One example is the U.S. National Security Agency’s PRISM program.

Its existence was revealed in 2013 by whistleblower Edward Snowden. Under this program, the NSA collects data from companies like Google, Microsoft, Facebook, and Apple. The data can include chats, videos, logins, emails, social networking details, etc.

Data leaks are a bit more exposed to media coverage. Cold fact: Internet Service Providers collect lots of your data for a number of reasons. Most of them want to know your habits to sell you more products or services. One solution is to use a private browser, like Sidekick, that protects your data from being collected. Still, completely preventing the digital giants from knowing about you today is near impossible.

And the larger the volume of personal data – the bigger the number of data breaches. In 2021, for example, data from almost 1 billion accounts leaked. Is there a remedy? Enter the blockchain.

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What is blockchain and how does it work?

A blockchain is a distributed database processing transactions across many PCs. New transactions, or blocks, are linked to previous ones through their hashes. You can’t change or delete the block if it’s already in the blockchain. This creates an invariable vault of all blocks, making it highly secure and theft-proof.

The birth of blockchain can be traced back to the 1990s, when the concept of cryptographically secured chains of blocks was first proposed. However, it wasn’t until 2008 that the technology gained significant attention when an unidentified individual or group under the pseudonym “Satoshi Nakamoto” introduced Bitcoin, a decentralized currency.

This largely popularized blockchain, as it showcased the potential for a decentralized, secure, and transparent system for conducting transactions. Since then, countless cryptocurrencies have emerged, and blockchain became an organic part of many industries, including finance, supply chains, and healthcare.

How does blockchain support data privacy

Blockchain tech is used extensively in the healthcare sector, where it’s employed to protect medical records from exposure. In 2019, a blockchain-based medical records system was launched in Estonia that allows patients to control access to private health info. Blockchain helps patients be assured that their medical data is secure and can’t be tampered with.

Also, privacy blockchain technology can be used to improve voting systems. For example, in West Virginia, USA, blockchain tech was used in the 2018 midterm elections. This is how the state was able to ensure that there was a secure vote count and no interference in the voting process.

Decentralized ID verification systems are another example. In 2020, the government of Catalonia, Spain, announced that it was developing a blockchain-based identity verification system that would allow citizens to securely and easily verify their identity.

Another good example is the “Building Blocks” program implemented by the United Nations’ World Food Programme (WFP) in Jordan’s Azraq refugee camp. The project utilized blockchain to manage cash-based transfers to refugees. Each refugee was given a unique digital identity through biometric authentication (e.g., iris scanning) that was linked to a blockchain-based system. This system documented their food entitlements, dealings, and account balances, ensuring the data was secure and tamper-proof.

The blockchain-based system allowed WFP to bypass the traditional banking system, reducing costs, increasing transparency, and minimizing the risk of fraud. It also empowered the refugees with secure digital IDs that could be used to access essential services, providing them with a sense of dignity during their difficult circumstances.

Blockchain Privacy Features

Blockchain and data privacy tech offer multiple privacy features. The decentralized essence of this software makes the authorities or intermediaries pretty redundant, reducing the risk of leaks or surveillance.

Privacy tokens in blockchain are employed by those who want their DeFi, or decentralized finance deals to be untraceable. Such tokens use zero-knowledge proofs and other confidential transaction features to provide additional layers of security, allowing people to check transactions while concealing some types of data. These features, combined with the blockchain’s inherent transparency, create a secure environment for data sharing.

Private Blockchain: Addressing Privacy and Security Concerns

Blockchain privacy issues can be mitigated through the use of private networks. Unlike public blockchains, which are easily accessible, private blockchains restrict entry to a specific group of parties.

Private blockchains, also known as permissioned blockchains, require participants to obtain approval from the grid’s administrator to join, read, and write data. This selective access control helps prevent unauthorized data access and potential risks.

Private Blockchain Examples: Real-Life Implementations

Private blockchain examples can be found in various industries. Corps use blockchains to safeguard sensitive data and boost privacy. Here are some notable examples:

Developed by the R3 consortium, Corda is an open-source, blockchain platform designed for use in financial services and other industries that require strict privacy and security controls. Corda’s architecture allows for selective data sharing between partakers when only the relevant members have access to the data.

Created by the Linux Foundation, Hyperledger Fabric is a permissioned blockchain designed for use in various industries. It supports customizable privacy levels, allowing firms to fine-tune their data sharing and access controls. Hyperledger Fabric has been implemented in diverse sectors such as supply chain management, healthcare, and government services to protect sensitive data and streamline operations.

Benefits of Using Private Blockchains

Data Privacy: Private blockchains provide a high degree of data privacy. Only authorized members can access the network. Security: Private blockchains are highly secure as they rely on a select group of participants to maintain the network. Scalability: Private blockchains can be designed to handle a large number of transactions, making them ideal for supply chain administration. Transparency: Private blockchains make it easy to track and trace data.

What are the Privacy and Security Issues Associated with Blockchain?

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While blockchains are about more data privacy and security, there are still some privacy and security issues here.

Public Blockchains and Privacy Risks

Public blockchains, which include Bitcoin and Ethereum, are open to anyone who wants to partake. This creates some privacy risks. For instance, transactions on public blockchains are pretty visible, making it possible for malicious actors to trace operations. Additionally, public blockchains are susceptible to 51% attacks, where a group of miners can take control of the network and alter transactions.

Security Risks in Private Blockchains

While private blockchains provide a high degree of data privacy, they are not immune to security risks.  Private blockchains rely on a select group of participants to run the network, which can create centralization risks. Also, such blockchains can be vulnerable to attacks or manipulation by a malicious insider, such as an authorized participant with access to the network.

Regulatory Challenges

Blockchain technology operates in a regulatory grey area in many jurisdictions. This can create challenges for businesses that want to adopt the technology but are unsure of the legal implications. For example, in some countries, cryptocurrency turnover is heavily regulated, making it difficult for businesses to use privacy tokens.

Blockchain Privacy: Future Developments

The future of blockchain privacy will likely see continued advancements in cryptographic techniques and privacy-preserving protocols. Innovations such as homomorphic encryption, which allows computation on encrypted data without compromising it, and secure multi-party computation, which enables multiple users to collaboratively compute a function without revealing their individual inputs, have the prospect of significantly protecting blockchain networks.

Besides, the emergence of privacy-centric blockchain projects, such as Monero and Zcash, highlights the growing interest in similar solutions. As the technology matures, it is expected that more enterprises will adopt blockchain to tackle their challenges.

How Can Sidekick Browser Help Protect Data Privacy?

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With the increasing risk of surveillance by Internet Service Providers (ISPs), governments, and malicious actors on users’ online activities, it is essential to take measures to protect data privacy. It’s definitely more secure to manage your private blockchains in Sidekick Browser because it’s a privacy-focused browser that can assist in protecting data privacy in several ways:

Ad and Tracker Blocker: Sidekick Browser blocks ads and trackers, reducing the risk of surveillance by third-party companies. Keeping ads aside also helps users to focus on the important things, that’s why Sidekick is highly praised by the ADHD community, which is known to be very sensitive to distractions.

VPN: Sidekick Browser includes a built-in VPN that encrypts all traffic, making it difficult for ISPs and governments to monitor online activities.

Private Browsing Mode: Sidekick Browser includes a private browsing mode that does not store any browsing history or cookies.

In the final count, blockchain technology provides outstanding privacy and security, making it an ideal solution for the medical and finance sectors. Privacy tokens and private blockchains provide additional levels of data privacy, while keeping the benefits of blockchain technology. While there are still privacy and security issues, the benefits outweigh the risks. Additionally, using a privacy-focused browser such as Sidekick Browser can further protect data privacy and ensure safe and secure online activities.


A public blockchain is open to anyone who wants to participate, while a private blockchain is restricted to a select group of participants.

Blockchain provides amazing privacy mostly by de-centralization and encryption which allow for secure and tamper-proof storage of data.

Privacy risks known to go hand in hand with public blockchains include the observability of transactions by anyone, while security risks associated with private blockchains include centralization risks and vulnerability to attacks or manipulation by a malicious insider.

Private blockchains provide a ceiling level of data privacy, scalability, and transparency, making them ideal for use cases such as supply chain management and healthcare.

Sidekick Browser can help protect data privacy by blocking ads and trackers, providing a built-in VPN, including a private browsing mode, and offering encrypted messaging.