Data Ownership On A Blockchain

Data Ownership On A Blockchain

Once data is uploaded to a blockchain, it is there forever, but who has the rights to that data and who is responsible for it once it is uploaded? This is an issue of paramount importance, especially given that data ownership is such a sensitive topic nowadays. If a blockchain is public, just like Bitcoin’s, ownership of data might be besides the point. Those who use the system must understand that the data they upload might belong to them before they upload it, but once it is on the blockchain anyone can use it and ownership at the individual level becomes irrelevant. At the collective level however, the story is completely different.

With Ownership Comes Responsibility

Anyone who owns data is responsible for it, but once they upload it to a public blockchain, they are de facto renouncing individual ownership. People or institutions running the nodes in the system become custodians of that data, whether they like it or not. This means they are responsible for it, which can have legal consequences. This is exactly the topic that an academic paper from Augustana College brought to the attention of the media.

According to the paper, it is possible to encode data that is not necessarily related to transactions on Bitcoin’s blockchain. Nefarious actors took advantage of this to hide links to child pornography sites on Bitcoin transaction metadata. Anyone running a full node would in theory have that data on their computers, which is illegal in many countries, even if they do not use it or are not aware of its existence.

Nodes Pruning Non-Transaction Data

Thankfully, nodes can get rid of non-transaction data on Bitcoin’s blockchain. This pruning mechanism would allow them to discard that kind of data that could get them in trouble. Nevertheless, to do so, they would have to look for it actively and prune it. This data is encoded, so its contents are not immediately evident. Therefore, nodes might have the de facto responsibility of pruning all this data, but do they do it?

The System Responsible for an Individual’s Actions

Supposing that nodes engage in the pruning of non-transaction related data periodically and keep the blockchain “clean” – which in the case of Bitcoin, the Augustana College paper shows is not true – then the system actively assumes responsibility for the data that the individual uploads. This provision could be counterproductive, but ultimately inevitable when it comes to public blockchains.

As blockchains advance to include initiatives that go beyond cryptocurrency transactions and go into the realm of distributed data storage, this issue becomes more important. This aspect of data ownership and responsibility on the blockchain warrants deeper thought, especially before deploying new blockchain solutions.

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