GDPR Compliance Challenges in Blockchain-Based Systems

Abstract

Blockchain’s decentralization, transparency, and tamper‐resistance are celebrated properties for auditability and trust, yet they collide with core data protection duties under the EU General Data Protection Regulation (GDPR). This manuscript analyzes the principal compliance challenges that arise when blockchain processes personal data and proposes a practical, design-oriented framework to address them. First, we synthesize legal and regulatory positions on what counts as “personal data,” the difference between anonymization and pseudonymization, and the implications of the right to erasure, data protection by design and by default, allocation of controller/processor roles, and international data transfers. We then map these requirements to blockchain architectures (public permissionless, public permissioned, and private permissioned) and data patterns (on-chain, off-chain, hybrid). Building on recent guidance from the European Data Protection Board (EDPB) and national authorities, we outline concrete technical and governance controls—off-chain storage and on-chain commitments, keyed hashing, encryption/key-revocation strategies, chameleon-hash/redactable-ledger designs, selective-disclosure credentials/zero-knowledge proofs, and robust consortium governance—to reduce risk and improve demonstrable compliance. Applying a six-step assessment methodology to three realistic use cases (NFT profile registry, supply-chain provenance, and consortium KYC), we show that while no single pattern fully reconciles immutability with erasure, practicable combinations can align processing with GDPR’s principles of minimization, purpose limitation, storage limitation, and accountability. The paper concludes with a prioritized checklist for engineering “compliance-by-design” blockchains, and delineates scope and limitations for practitioners and researchers.