In a report on applying blockchain technology in global data infrastructure the ODI warned that storing personal data on the distributed ledgers within blockchain technology could pose “significant fresh privacy issues”.

“The irreversibility and transparency of public blockchains standfor they are probably unsuitable for personal data,” the ODI said. “We desire to be cautious when designing blockchain systems not to infringe on public’s privacy, and to account for a globe in which we possess doxing, identity theft and the proper to be forgotten.”

“Some of the proposed uses for blockchain – such as to record auditable benefits payments – threaten to expose this helpful of information about a much wider range of public, the benefits they receive and with whom they spend them,” it said.

A government-backed test started persist month to record benefits payments and track recipients’ spending, according to a report by the Financial Times. The test involves the “anonymous capture of data”, the Department of labor and Pensions has said, according to a report by The Register.

The ODI said, though, that “blockchains do not possess to expose personal data directly to reveal private information about public”.

It said: “A blockchain recording visits to health practitioners (including midwives, mental health teams and AIDS clinics) does not desire to include the entirety of someone’s health records to reveal information about them. Much befondof phone records … or browsing histories, this metadata may be sufficient to reveal personal details.”

The ODI said that blockchains can be designed to “limit the level of disclosure”, such as by using a “permissioned distributed ledger” approach, beneath which “trusted nodes” control what data is publically viewable and what data should not be shared.

“The security of entire the nodes in such a trusted network needs to be guaranteed as every node will possess a copy of entire the relevant data, and the network needs to be protected against spoofing, but, in general, if you possess a trusted network numerous privacy issues are no more problematic than they are in centralised systems,” the ODI said.

The Institute also said that blockchains can also be used “purely to provide a timestamp for information held elsewhere”. However, it said this means blockchain users possess to address “the burden of robust, distributed data storage” using other data storage technologies.

Data in blockchains can also be encrypted, but this raises a number of complications, the ODI said.

“The main problem with this approach is that if the decryption answer for encrypted data is ever made public, the encrypted content is readable by anyone with that answer; there is no way of encrypting the data with a diverse answer once it is embedded within a blockchain,” the ODI said. “Conversely, if the answer is ever lost, the data cannot be read. And there is the problem of sharing the answer for the data amongst entire those who legitimately desire to be capable to read it.”

The ODI said that blockchain should only be used “when it is the proper tool for the occupation at hand”.

“Success in data infrastructure design will come from convening sectors (such as finance, agriculture, or healthcare), identifying common challenges and then determining which technology approaches – whether blockchains or not – are the most appropriate in helping to address them,” it said.