Page 84 - U4SSC Blockchain for smart sustainable cities

(9) Transaction states record
Blockchain is considered as useful if the transactional relationship is required to provide and record the
state of the transactions. This is in alignment with the immutability principle of blockchain technology.
Unanimously, the use-cases consider it essential to record the state of the transaction. However, different
blockchains have different ways to preserve their history and transaction states. These differences are
fundamental to the specific characteristics of each type of blockchain. This dimension is directly related
to one of the most important features of blockchain, however it does not question the applicability of
blockchain. In general, this is one of the most researched features that motivate public services in exploring
blockchain technology.

(10) Sensitive data record

Personal and sensitive data should not be stored in the blockchain, since it conflicts with data protection
regulations. Blockchain is designed to facilitate the sharing of data. In the public blockchain, all the
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transactions are transparent and visible, which may increase trust. However, the transparency could be
a problem when information is personal, sensitive and contains confidential data. Public organizations
and municipalities are the entities that are collecting and storing a large volume of personal and sensitive
information about the residents. Individuals have little or no control over the data that are stored about
them and how it is used. Blockchain is presented as a solution to achieve a balance between data privacy
and the need to control better access to records and private information. However, the storage and
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sharing of sensitive issues vary depending on the type of blockchain. To overcome the challenge, most
of the use-cases are adopting a private permissioned blockchain and advanced cryptography using zero-
knowledge proofs allowing the institutions to transact on public blockchains while still protecting sensitive
data. Research and development on public blockchain are progressively providing solutions to the issue of
confidentiality. Sensitive data record is an important issue that does not question the blockchain applicability
but determines the adequate type. A possible solution is to store confidential, sensitive or personal data
off-chain and use a hash reference to keep access to the original data.

(11) Deleting data

Deleting data is an important characteristic and specificity that plays a critical role in blockchain applicability.
Surprisingly, 80 per cent of the cases consider the possibility to delete data necessary, which is contradictory
to the principle of immutability. It is technically impossible to delete data from blockchain. From a legal
perspective, it might cause an issue. In the European context, it is considered as the main “GDPR-blockchain
paradox”, given the “right to be forgotten”. Several studies are currently being undertaken to challenge
the immutability of blockchain technology or to adapt the technology to comply with the regulatory
frameworks. Research advancement showed that it is possible to delete full nodes of undesirable data
while continuing to store and validate most of the blockchain. Even though the requirements of deleting
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data is not preventing blockchain applicability for public service and cities, for the time being it does limit
the options in terms of blockchain type and most specifically for the use-cases that require the recording
and sharing of sensitive data.

74 U4SSC: Blockchain for smart sustainable cities