Enhancing Data Sovereignty & Self-Sovereignty With Blockchain

Understanding Data Sovereignty

Data sovereignty impacts governments, businesses, and citizens across societal values and ethics. National security is a key focus, as governments have concerns about sensitive information stored outside their jurisdiction -- TikTok's controversy with China demonstrates this well. Localising data within national boundaries helps comply with privacy regulations like GDPR and prevents exploitation by foreign governments. However, in 2020, it was estimated that 92% of the Western world's data is stored in the United States. Data sovereignty presents many challenges for multinational companies, which must often establish data centres within each country they operate in. The balance between national interests, individual rights, and ethical data use remains a pressing challenge.

Many governments are focused on maintaining data sovereignty and ensuring that critical data is not being stored and moved across the globe. -- Abhijit Dubey, CEO of NTT

Enhancing Data Sovereignty With Blockchain

Blockchain utilises a decentralised platform to create immutable data records in a transparent and secure way. The decentralised aspect means data remains under the control of its rightful owner and is not subject to manipulation or unauthorised access. Central to this on an individual level is self-sovereign identity, which empowers users to manage their digital identities without relying on a central authority. A significant challenge is the overconcentration of control -- 80% of the public internet's web traffic is controlled by a small group of powerful data companies. Through embracing decentralised data storage, governments can reduce reliance on centralised systems while maintaining control within national or regional borders.

Policies Relating To Data Sovereignty

The EU has addressed data sovereignty through the General Data Protection Regulation (GDPR), which ensures all Member States adhere to fair, secure, and transparent processing of personal data. The European Data Protection Board (EDPB) ensures consistent application and enforcement across the European Economic Area. The EU sees a direct benefit of blockchain on data sovereignty, especially through the European Blockchain Services Infrastructure (EBSI), which enables self-sovereign citizen-to-government and citizen-to-business privacy-preserving information sharing using W3C Verifiable Credentials and Decentralised Identifiers. Estonia's e-residency programme provides a practical example -- 99% of the country's public services are available online using blockchain.

EBSI enables self-sovereign Citizen-to-Government and Citizen-to-Business privacy-preserving information sharing using Verifiable Credentials, Decentralised Identifiers, and blockchain technology. -- European Commission

Challenges & Future Outlook

There are challenges in relation to data sovereignty, self-sovereign identity, and blockchain. Governments will need to balance empowering users to maintain personal control while maintaining large-scale oversight. One key point of contention is the right to be forgotten -- a human right recognised by the EU since 2014 and a leading principle of the GDPR. As blockchain is immutable by nature, the two are at odds. Solutions include storing sensitive data off-chain and implementing techniques to ensure anonymity. Despite these challenges, there is huge opportunity for innovation and collaboration. Both individual rights and regulations will have to co-exist as we continue becoming a more interconnected world.