Ethereum's GDPR Compliance Path

Ethereum Eyes GDPR Compliance with Modular Design

A new proposal outlines a pathway for Ethereum to comply with the European Union's General Data Protection Regulation (GDPR). The plan centers on a modular architecture designed to manage data privacy effectively within the decentralized nature of public blockchains.

Proposed by Ethereum community member Eugenio Reggianini, the modular strategy shifts personal data to the edges of the network (wallets and decentralized applications, or DApps). This is combined with off-chain storage and metadata erasure to limit data exposure and focus GDPR controller duties on a smaller set of entities.

Technical Roadmap: Privacy-Enhancing Technologies (PETs)

The proposal leverages several existing and proposed technologies to minimize data exposure. These include:

• Proto-danksharding (EIP-4844): Limits transaction blob lifespans, minimizing storage.
• Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs): Allows validators to verify proofs without viewing transaction data.
• Other PETs: Fully Homomorphic Encryption, Trusted Execution Environments (TEEs), multiparty computation (MPC), Proposer-Builder Separation (PBS), and Peer Data Availability Sampling (PeerDAS).

These PETs enhance privacy by reducing the amount of personal data visible on the blockchain.

Ethereum's Three-Layer Approach

The proposal breaks down GDPR implications across Ethereum's three layers:

• Execution Layer: Acts as a processor, handling only encrypted or blinded data.
• Consensus Layer: Validates commitments and zero-knowledge proofs.
• Data Availability Layer: Stores anonymous shards for limited timeframes, adhering to data minimization principles via PeerDAS.

By concentrating data control at the application layer and utilizing PETs, the proposal aims to safeguard user privacy without compromising Ethereum's core principles. Success, however, depends on community adoption, developer support, and regulatory alignment.

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