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 recent privacy issues”.

“The irreversibility and transparency of public blockchains standfor they are probably unsuitable for personal data,” the ODI said. “We require to be cautious when designing blockchain systems not to infringe on public’s privacy, and to account for a earth in which we own 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 experiment started endure month to record benefits payments and track recipients’ spending, according to a report by the Financial Times. The experiment involves the “anonymous capture of data”, the Department of toil and Pensions has said, according to a report by The Register.

The ODI said, though, that “blockchains do not own 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 require 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, below which “trusted nodes” control what data is publically viewable and what data should not be shared.

“The security of every the nodes in such a trusted network needs to be guaranteed as every node will own a copy of every the relevant data, and the network needs to be protected against spoofing, but, in general, if you own 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 own 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 solution for encrypted data is ever made public, the encrypted content is readable by anyone with that solution; there is no way of encrypting the data with a varied solution once it is embedded within a blockchain,” the ODI said. “Conversely, if the solution is ever lost, the data cannot be read. And there is the problem of sharing the solution for the data amongst every those who legitimately require to be capable to read it.”

The ODI said that blockchain should only be used “when it is the proper tool for the toil 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.