As the Ethereum ecosystem and its core principles continue to evolve to address data privacy issues, a new proposal suggests adopting a modular compliance strategy as a pathway for aligning public blockchains with the EU's General Data Protection Regulation (GDPR).
On Monday, a proposal drafted by Ethereum community member Eugenio Reggianini recommended using a modular architecture to achieve effective data management and privacy protection.
"By pushing personal data to the edge (wallets and decentralized applications DApps), using off-chain storage with metadata erasure, and splitting roles through encryption, we can centralize GDPR controller responsibilities in a few entities, while the broader network acts merely as processors or out of scope," Reggianini stated.
The transition of Ethereum to a modular architecture could enable the integration of various privacy-enhancing technologies (PETs), which, according to Reggianini, can achieve GDPR compliance in a permissionless blockchain environment.
The proposal outlines several technologies that Ethereum has already integrated or proposed to help reduce personal data exposure, including proto-danksharding (EIP-4844), which limits the lifespan of transaction blobs to about 18 days, enforcing storage minimization.
Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge (zk-SNARKs) can also enhance privacy by allowing validators to confirm succinct cryptographic proofs instead of viewing transaction payloads, significantly reducing the visibility of on-chain data.
Other PET integrations that may assist with GDPR compliance include fully homomorphic encryption and trusted execution environments (TEEs), multi-party computation (MPC), proposer-builder separation (PBS), and peer data availability sampling (PeerDAS).
The proposal breaks down the impact of GDPR into three layers of the Ethereum network: the execution layer, the consensus layer, and the data availability layer.
The execution layer will operate as a processor, only relaying encrypted or blinded data, while the consensus layer will solely verify commitments and zero-knowledge proofs. Finally, the data availability layer under PeerDAS will only store anonymous shards for a limited time period, aligning with GDPR's data minimization principle.
Reggianini claims that by centralizing data control at the application layer and leveraging PETs, Ethereum can protect user privacy without sacrificing its core principles.
Nevertheless, the success of this framework will depend on broad community adoption, developer support, and potential coordination with EU regulators.
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Original article: “Ethereum Privacy Roadmap Proposes Blockchain Design Compliant with EU GDPR”
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