Ethereum Develops New Privacy Proposal That Complies with EU Requirements

The proposed privacy approach on Ethereum is based on the use of a modular architecture and complies with the requirements of the European Union's GDPR.

Public blockchains such as Ethereum face the challenge of reconciling the principles of immutability and decentralization with data protection regulations.

Reggiani noted that the main goal is to transfer information management to the relevant application layer entities, which will decide how to process personal data, while the lower-level infrastructure (execution and consensus clients) will only process anonymous or pseudonymous data.

Essentially, personal data must be transformed or abstracted before it reaches the blockchain execution layer, and certainly before it is propagated through the consensus layer.