Privacy and Data Protection Concerns Regarding the Use of Blockchains in Smart Cities

Abstract

In this work we investigate which aspects of data protection regulation must be carefully observed when implementing Blockchain-based projects in smart cities. This technology provides interesting properties and allows governments to develop flexible and innovative data management systems. Nevertheless, realizing the benefits of using Blockchains requires understanding the government processes along with the legal framework and political setting imposed on government. Though it is a buzzword, Blockchain may not always be the best solution for data processing, and carrying out a Data Protection Impact Assessment could allow an analysis of the necessity and proportionality of the mechanism. Furthermore, principles relating to security of data remain applicable to Blockchains. We discuss points of interaction between Blockchain technology and the European Union data protection framework, and provide recommendations on how to better develop Blockchain-based projects in smart cities. The findings of the study should provide public sector actors with a guideline to assess the real necessity and better format of a Blockchain-based application.