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- Europe may soon classify Bitcoin as illegal under new privacy rules.
- The European Data Protection Board (EDPB) sees blockchain public keys as personal data.
- These proposed rules could force the deletion of blockchains, threatening Bitcoin’s legality.
Bitcoin is facing a critical threat in Europe. A new draft from the European Data Protection Board (EDPB) may place the cryptocurrency in direct conflict with privacy laws. The draft treats public keys, essential to Bitcoin transactions, as personal data.
This classification means that they have to follow strict privacy regulations, including the right to deletion. But in Bitcoin, that runs on blockchain technology, data is forever. Once data is written, it cannot be changed or removed. This principle creates a grave issue.
If public keys constitute personal data and such data are non-deletable, then Bitcoin cannot be in conformity with the General Data Protection Regulation (GDPR). The EDPB has affirmed this: technical limitations are not a valid excuse for non-compliance.
GDPR Clashes with Blockchain’s Core Design
The crux of the matter is a paradoxical inner conflict. The GDPR provides people with authority over their data, including the right to erasure. Blockchains, however, are inherently resistant to any change. Their architectural design protects data gems, making them secure and unchangeable.
The EDPB acknowledges this issue but does not provide any practical solution. Instead, it recommends that if personal data cannot be deleted, the developer must delete the entire blockchain. That means erasing every copy held by any user or node.
Such a proposal would shatter the whole principle of decentralization. If regulators could delete such a huge amount of data, that would make people lose faith in any blockchain system. It also raises questions about authority. Who decides what data is deleted? Who is in charge of the deletion of thousands of disparate users?
EDPB Draft Threatens Bitcoin Legality
Paymium’s Alexandre Stachtchenko warns that such proposals would make Bitcoin illegal in Europe. He stressed that anonymizing data is not the solution. According to Stachtchenko, EU regulations still consider anonymous crypto transactions suspicious or criminal.
If the regulations pass in their current form, Bitcoin would be illegal in the EU, thus putting its exchanges, developers, and users all at least in jeopardy of some kind of punishment for basically being on the network.
The EDPB keeps the consultation on the draft until June 9. So, it has a pretty small window for the crypto community to push back. As things stand, Bitcoin’s future in Europe is still uncertain and pretty much threatened.
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