The rapid technology evolution and the future challenges demand us to adopt increasingly cutting-edge and up-to-date technological tools. In this perspective, Blockchain technology is revolutionizing countless areas of our daily lives. In this paper, we present a non exhaustive list on the state of the art about Blockchain technology in multiple application fields, both from an industry and business perspective and from a consumer one. We will also present a dedicated focus on the frictions between distributed ledgers and data protection regulations crossing all these areas.
there is therefore no need for a central system to act as
a guarantor. The blockchain is a particular distributed
If we had to give a definition of blockchain we could ledger made up of an unbroken chain of blocks, each
quote the World Bank which uses the following words: linked to the previous one. The blocks are composed of a
Blockchain, a particular type of DLT (Distributed Ledger number of transactions that are encrypted and validated
Technology), uses cryptographic and algorithmic meth- by all nodes.
ods to create and verify a continuously growing, append- The pandemic we are currently experiencing, although
only data structure that takes the form of a chain of it still weighs heavily on our society, has undoubtedly
so-called ‘transaction blocks’ – the blockchain – which accelerated the development of more digital and
inteserves the function of a ledger [1, 2]. Unlike current cor- grated processes. Therefore, many companies are
accelporate and government databases where data is stored erating their eforts to provide services that are more and
in one place (centralized), the blockchain is composed of more adapted to a population of smart business users but
a digital network of globally dispersed computers, called more generally, to provide reliable and eficient services
nodes that record data and transaction history. The nodes through online and new technologies.
are also responsible for validating and storing all transac- In recent years we have seen great innovation and
tions since the database was created. Since the system is developments in technologies related to Artificial
Indecentralized, most nodes must reach a common agree- telligence [
This article, after presenting the advantages of blockchain technology and the use of smart contracts, illustrates an overview, far from being exhaustive, of the main applica- local copy of the ledger and contributes to the maintetion areas of blockchain. Moreover, an in-depth analysis nance of the distributed network by providing computing will focus on issues related to the regulation on personal power and storage. All records in the ledger are searchdata protection, a problem that involves transversally all able by nodes in the network and all information conareas where it is possible to apply blockchain technology. tained therein is verified and auditable. In summary, a
The paper is structured as follows: in section II, we talk distributed ledger can be viewed as a database whose about related works, what is blockchain, how it works data is replicated, shared, synchronized, and geographiand what are the advantages compared to the use of dis- cally distributed across multiple nodes in a network that tributed databases; in section III, we outline the features communicate and collaborate via specific consensus and of blockchain, what smart contracts are and describe the workload-sharing protocols. main application areas; section IV analyzes the dificult Although the technology used for distributed ledgers relationship between blockchain and the legislation on and the blockchain share the same conceptual origin and personal data protection. Finally, in section V we sum- have the same purposes, they are not exactly the same marize our work, draw conclusions, and outline possible thing. The blockchain is as a particular distributed ledger future studies. with a distinct set of features and operational processes that give it significant value. Unlike distributed ledger, blockchain bundles transactions into blocks protecting 2. Related work them against tampering with powerful cryptographic systems, moreover each block is sequentially linked to In this section, we will describe what a blockchain is, all other blocks in the chain. These blocks, once inserted how it works and what its most important uses are. We into the chain, are immutable and can be used to reconalso illustrate why the blockchain, despite being a dis- struct the history of all the data within the blockchain. In tributed database, overcomes its limitations and expands addition, there is a consensus system (e.g. Proof of Work its potential and use. - POW or Proof of Stake - POS) to determine how new
Before talking about blockchain, it is essential to intro- blocks should be added to the blockchain. duce distributed systems [34] as the core of any blockchain The most famous use of the blockchain is the techis composed of a distributed and decentralized system. nology behind bitcoins [32]. In this case, the blockchain A distributed system is made up of two or more nodes records currency transactions, which is the transfer of (computers connected to each other via telematics) that currency from one wallet to another. This is just one collaborate simultaneously for a common goal, giving the of the potential applications of the technology, in fact, perception to the end user that they are one system. An blockchains are useful in many other fields both indusexample is represented by the well-known e-commerce trial and tertiary and for many other types of recordplatform Amazon that is based on a large distributed sys- ings that go far beyond simple financial transactions. tem but users see it as a single, coherent platform. In a They can be used for all information that needs to be distributed system, all nodes are able to exchange infor- recorded in an immutable way such as health data in mation directly, without the necessity of a centralized medical records, contracts, property transfers, purchase element acting as a director. The main objective of a dis- of goods and services and much more. tributed system is to ensure fault tolerance and eficiently manage the communication and exchange of data and information between nodes. In fact, even if some nodes 3. Blockchain: the concrete of the network should be unreachable, the system as a whole will be able to provide the service for which it was benefits and most promising designed, without interruption and without providing applications disservice. When a database uses distributed technology to manage information of interest to stakeholders, it is In this chapter, we are going to outline the main features referred to as a distributed database or distributed ledger of blockchain technology, pointing out its positive sides (also called distributed ledger technology or DLT). and possible fields of application. In fact, in the last few
A distributed ledger is a ledger where data is entered, years, analysts have hypothesized that a large part of the updated and controlled in a distributed manner among industries could benefit more or less strikingly from the users, without the need for a central governing body. In use of distributed ledger in general and blockchain in this new scenario, data is stored in the ledger only when a particular. consensus has been reached between the parties involved. There are several cases of commercial use of blockchain, Subsequently, this data is time stamped and a unique en- with transactions that are automatically verified and orcrypted signature is assigned to each transaction. Each ganized by a decentralized platform that does not require party involved in maintaining the ledger has its own the supervision of a central entity or subject, while ensuring resistance to tampering and fraud.
In the second part of this chapter, we will present a (non-exhaustive) list of some of the ways through which companies - large and small - are looking to harness the power of blockchain technologies. 3.1. Blockchain benefits In the previous chapter, we briefly introduced what blockchain is and some of its main features. Now we focus on the "why", i.e. why we are hearing more and more about it and the benefits that block- chain can provide to businesses and private citizens. What has acted as a catalyst, determining its difusion, has been the innovative concept of the Internet of Value [35]. This term refers to the use of the Internet as a means of transferring and storing values of all kinds, not just currencies and securities, but also intellectual property, music, art, scientific results, etc. In this context, Blockchain plays an essential role since it guarantees, for this purpose, several important advantages, including: modify it as this would involve a huge expenditure of computing power. If, for example, you wanted to modify a transaction that was written 10 blocks ago, a hacker would have to modify and recalculate all 10 blocks or cut the chain and invalidate the next 9 blocks. This is, in reality, an almost impossible practice to implement on many blockchains. 6. Highly secured structure by design: All blockchain transactions are encrypted so it gives the network high integrity. 7. Programmability: instructions can be included within blocks that trigger specific actions when certain conditions occur. 8. Incontestability: the decision to validate a piece of information is not taken only by a node, but through a secure consensus-gathering mechanism within the network, making it particularly dificult to contest the choice made by the most.
3.2. Promising applications of blockchain 1. Efficiency: the exchange of values takes place
in "near" real time. From what has been said so far, it is clear that the listed 2. Decentralization: This is perhaps the most benefits are closely related to the world of finance and evimportant concept of a blockchain, as there is no erything that surrounds it. In fact, initially, the Blockchain need for a third party or intermediary to vouch was used to certify transactions between people. Nowafor the validation of transactions and information days, anyone has already heard terms like Bitcoin[32], entered into the distributed database. In fact, a Cryptocurrency, Ethereum [36, 37], smart contract [38], consensus mechanism shared and accepted by all etc. In recent years, however, the areas of application nodes in the network is used to validate transac- of the Blockchain have multiplied, going to afect sections and blocks. For this reason, the Blockchain tors such as: logistics, public administration, food chain, is defined as a trustless system. health care, telecommunications, insurance and so on. 3. Distributed Structure: Since the data is repli- Despite the great ferment, the technologies are not yet cated on all nodes of the network and geograph- fully mature and there are still few concrete applications. ically dispersed across the globe, the system is The flip side of the coin is that there are still huge opporhighly resistant to failure or cyber-attacks. Since tunities to be exploited: only 37% of large companies and each node has a copy of the entire database, there 20% of Italian SMEs are familiar with these technologies. is no single point of failure and any damage to Less than 2% of large and 1% of small companies have a peer in the network does not afect the overall started projects [39]. Internationally, in 2019, there were system operation, unlike in centralized systems 488 blockchain and distributed ledger projects launched where a cyber-attack or a data center blackout worldwide, up 56% from 2018, bringing the total to 1,045 can interrupt the service of an entire system. This over the last 4 years. But of these only 158 are implemenredundancy gives the entire network high avail- tations, of which just 47 are already operational, the rest ability and reliability. are experiments or Proof of Concept, while as many as 4. Transparency: The data contained in the block- 330 are just announcements. Despite the pandemic we chain are available to all nodes of the network are experiencing, the growth of blockchain-based techand in the case of public networks, they are also nologies has not seen any slowdown. On the contrary, freely available to anyone who accesses the net- there has been significant growth. Out of 1,242 initiatives work, while not actively contributing to the sub- surveyed from 2016 to 2020 [40], there are 267 initiatives sistence of the system. This feature provides the launched in the last twelve months at the international blockchain with the peculiarity of being trans- level by companies and public administrations, which parent and therefore trust towards the system is include 70 announcements and 197 concrete projects (of guaranteed by this feature. which 83 are operational, the rest experiments or proof 5. Unalterability: Once the data has been writ- of concept). Compared to 2019, concrete projects grew ten in the blockchain, it is extremely dificult to by 59%, while announcements dropped by 80%, a sign of a market that is moving away from media hype to focus specific programming language that run on a blockchain on more operational initiatives; 47% of cases mapped in and represent a set of rules agreed upon by the parties 2020 use existing platforms, a sign that operators’ focus involved in the project. If, at run-time, these predefined is shifting more toward application development and less rules are followed, the smart contract executes automation creating new platforms. cally to produce the expected output. Depending on the
In this context, almost all the projects currently in use, underlying agreement, these lines of code enable both dein the development and design phase cannot disregard centralized execution and verification and enforcement the presence of smart contracts, i.e. computer-based con- of the previously defined contract terms. Smart contracts tracts that allow the full exploitation of the potential of allow for the exchange of anything that may have value the blockchain. to the parties involved, for example: money, stocks, prop
In the next section, we explain what smart contracts erty, etc., in a totally transparent manner, without the are and why they are so important in the innovative need for an intermediary and keeping the system free of context that blockchain brings. conflicts of interest. Smart contracts do not only define
While in the next one we will indicate a list of appli- the rules of the game of any agreement, they are also recations and examples of Blockchain use, certainly not sponsible for the automatic execution of these rules and exhaustive but enough to understand the enormous af- compliance with the obligations set forth. In other words, fect that this technology is having and will have, from smart contracts are automatically executed lines of code now on all of us. stored on a blockchain that contain predetermined and well-defined rules with no possibility of misunderstand3.2.1. Smart contract ing. In this scenario, the space for fraud is reduced and since there are no intermediaries of any kind, the costs and possible risks of conflicts of interest are also limited.
Nick Szabo, an American computer scientist who invented a virtual currency called "Bit Gold" in 1998, deifned smart contracts as computerized transaction pro- 3.2.2. Blockchain applications and examples tocols that execute terms of a contract[38]. A modern definition of a smart contract could be formulated as In this section we present a review of blockchain apfollows: "A smart contract is an event-driven program, plications, in order to understand how and where this written in a specific programming language (depending emerging technology is playing a leading role nowadays on the blockchain on which it is deployed), executed and where we will see it gaining an increasingly relevant on the nodes of a blockchain that produces as a result space in the coming years. The list below is only a part of a state change of the distributed ledger on which it in- the possible applications, and has been selected to highsists." The state change is generally represented by a light also those areas where the use of a blockchain could transaction that changes the blockchain. When a smart radically change the current scenario 2 3. contract is invoked, the expected outcome is purely de- Banking, Finance and payments: Financial interministic based on data provided as input. Since one of stitutions are probably the most advanced sector in terms the main characteristics of the blockchain is its quality of blockchain exploration, with initiatives capable of of acting as a decentralized database shared among all channeling the activity of many prominent players. Since actors that are part of the network, without the involve- banks and financial institutions essentially serve as reposment of intermediaries or third parties, this peculiarity itories and secure centers for currency transfer, blockchain, allows the smart contract to be executed without the pos- as a digitized, secure, tamper-proof ledger, can ensure sibility of alteration, in a certain way, saving time and the same function while reducing costs and time. As an money. These specialties are attracting the interest of example, Switzerland’s UBS [43] and Britain’s Barclays many companies, both public and private, who are invest- [44] are already experimenting with a way to accelerate ing large amounts of capital in this sector. Currently, the back ofice, money management and transfer functions best known smart contracts are those that insist on the using blockchain.
Ethereum blockchain, but others are also emerging such Insurance: Blockchain technology enables a wide as, just to name a few, EOS [41] and BSC (Binance Smart range of options, for example for the decentralized manChain) [42]. Since these blockchains are "turing com- agement of an instant policy, capable of significantly lowplete" 1 it is possible to create highly customizable smart ering both complexity and activation and management contracts and the areas of application can be the most var- costs, while also eliminating the need for intermediation. ied, not only the financial field, but embracing virtually all Thanks to blockchain, insurers can automate many operaindustries. After providing a definition of smart contract let’s see what smart contracts are, in more detail. A smart contract is composed of a set of instructions written in a
applicazioni/
3https://www.blockchain4innovation.it/iot/blockchainbenefici-concreti-le-applicazioni-piu-promettenti-27-settori/ 1https://en.wikipedia.org/wiki/Turing_completeness tions: the premiums calculation, the system of appraisals number of grants to explore innovative solutions using and claims settlements, obtaining and guaranteeing the blockchain technology for secure digital identity manageinsured maximum transparency at every stage [45]. ment, to improve the anti-counterfeiting capabilities of
Agrifood sector: The food supply chain is prob- digital documentation to prevent fraud and forgery [50]. ably one of the most complex fields of application, as In addition to reducing the number of human resources the number of actors and products involved is extremely needed to deliver many services, the blockchain would high, as is the number of relationships that are structured also provide a huge motivational factor for civil servants, through the life stages of the product, from its cultiva- who would see the results of their work tracked in a transtion/farming to its consumption on the table. Keeping parent manner, including in relation to the achievement track of everything is a huge undertaking, which the of annual performance targets. blockchain is beginning to lighten and make much more School and academia: The Holbertson School of eficient, especially in terms of security and transparency Software Engineering, based in San Francisco, California for all stakeholders [46]. (USA), has announced that it will use blockchain tech
Healthcare: Healthcare institutions sufer from a nology to authenticate academic degrees and certificates chronic inability to securely share data between diferent [51]. Other universities have also started to implement platforms and institutions. Better collaboration between tools based on distributed ledger technology to ensure data providers means, in essence, a greater likelihood of greater transparency in the management of academic cermaking accurate diagnoses, a greater likelihood of opting tificates. Another important benefit comes from saving for efective treatments and, more generally, an increase time and costs associated with managing thousands of in the overall ability of healthcare systems to provide paper documents. good care. Blockchain applied to the healthcare sector Electoral voting (e-voting) [52]: Elections reallows hospitals, payers and other healthcare facilities quire authentication of voter identity, secure storage of to share access to their networks without compromising records and a fully transparent counting and counting data security and integrity. Startup Gem 4 has launched process to determine the winner. Blockchains can serve Gem Health Network, a platform based on distributed as a useful tool for selecting, monitoring and counting ledgers (and opensource peer-to-peer project Ethereum, votes while reducing attempts at electoral fraud. Follow in particular) combined with multi-signature and multi- My Vote 6 has already been used in testing during the US factor authentication technology to create a highly secure presidential election as an end-to-end verifiable online universal data infrastructure. Tierion 5 is another startup voting system. that has developed a platform for data storage and verifi- Logistics and large-scale retail trade: Location in the healthcare sector. gistics is one of the privileged areas for the digitaliza
Pharmaceutical industry: In the case of pharma- tion of processes. Thanks to blockchain, goods can be ceuticals, the blockchain makes a decisive contribution uniquely tracked during transport and storage in the to the supply chain, especially to avoid counterfeiting warehouse, minimizing the possibility of error. This can and fraud, which would otherwise be very dificult to be used by large-scale retail systems to manage the enidentify, since, without a unique identifier, it is extremely tire supply chain more safely and eficiently. This is a dificult to recognise a genuine drug from a non-original very interesting detail, if we consider that this technolone [47]. ogy can be easily combined with other services, such
Government and public administration (PA) as data analysis based on artificial intelligence, which [48]: The introduction of blockchain in PA procedures allows optimizing order processes thanks to predictive represents one of the most interesting application areas simulations [53]. as it will produce a real revolution in the quality of ser- Buying and selling of goods and services: vices ofered to citizens. The scenario is not an easy one Critical issues found in the buying and selling of movable to implement, and there are what we might call gener- and immovable assets include lack of transparency priational barriers in terms of digital culture, not only on marily during and after transactions, excessive reliance the part of the institutions, but above all on the part of on paper, and possible fraud and errors in public records. the end users, the citizens. The blockchain could make Blockchain ofers a way to reduce the need for paper services eficient and transparent, the request for useful support for recording data and thus leads to faster transdata would be available almost in real time, and it would actions related to contract drafting, identification of counalso allow the certification of authenticity, timestamping terparties and precise details of the purchase and sale. and ownership of the provided data [49]. In this field, the Decentralized databases applied to this industry can help Department of Homeland Security (DHS) has provided a record, track and transfer e.g. land titles, title deeds, liens etc. and help ensure that documents are accurate and
5https://tierion.com/
verifiable. Purchasing of services can enjoy the same ones. benefits as processes are streamlined and payments are secure and directed to those involved, without the need for intermediaries. Ubitquity 7 has developed a platform 4. Blockchain, privacy and GDPR for financial institutions and mortgage companies to man- compliance age the related documents in a fully transparent manner, improving back-ofice administration and reducing as- In the chapter we analyze an issue that cuts across all apsociated costs. Visa and DocuSign 8 presented a report plications related to blockchain technology, in fact we exdocumenting an experiment conducted in the car leasing amine the dificult relationship and integration between industry. The two used distributed ledgers to build a blockchain technology and personal data protection. proof-of-concept system for a process that culminates Every action we daily perform on the network leaves in the leasing of a car in a completely autonomous and a fingerprint that, if ordered chronologically, allows us to unrelated manner. define our "life stream". Combining our "life stream" with
Art and collecting: NFTs (Non Fungible Tokens) that of all users around the globe, we can only imagine 9 are literally revolutionizing the art market and beyond. the immense amount of data that surrounds us, defined The possibility of making a digital work unique has con- as Big Data, i.e. structured and unstructured information tributed to give value to goods that otherwise, due to that needs to be aggregated and analyzed in order to their natural reproducibility, would have been completely be better exploited. More generally, the term Big Data devoid of it. This phenomenon has led many artists to refers to that set of data that is too large and complex to tokenize their digital works on special platforms (Super- be analyzed with traditional application and computing Rare 10, Rarible 11, etc.) that regulate the market, giving software. Big data are strategic in many fields as they the creator a royalty for each subsequent transaction. improve the user experience; they allow the creation of An anthology of works by the digital artist Beeple was machine learning models; they provide important indicarecently auctioned at Christie’s for a sum close to 70 mil- tions for the development and improvement of existing lion dollars. Collectibles are also benefiting from NFT products; they allow the realization of predictive models technology as the U.S. NBA 12 is selling "top shoot" of its that identify frauds and potential malfunctions of sysbasketball players. Another famous example is the collec- tems; they provide useful information to improve busition of pixel art images called Cryptopunks 13, which has ness procedures and finally they give a push towards currently reached staggering figures. NFTs also ofer the innovation as they can be useful to create new products ability to sell digital versions of some of their tangible and strategies anticipating (or channeling) the desires of products, thus creating entirely new markets. Gucci , has users. Consequently, it is of paramount importance that released virtual sneakers in the form of NFTs 14. this growing amount of data is stored securely, tamper
Beyond these examples there are many other fields of proof, and without the possibility of being counterfeited possible application of blockchain, such as: industry 4.0 and altered. In this perspective, blockchain technology [54]; electricity [55]; telecommunications 15; notary 16; can be a useful ally of big data to manage the limitations industrial and intellectual property 17; retail 18; gaming 19; just highlighted because once a data is saved within the charities 20 and defence 21 just to name the most famous blockchain acquires the following features: decentralized, transparent and immutable (these features have already 7https://www.ubitquity.io/ been described in previous chapters so we will not go 98hhttttppss::////ewtwhewre.duomcu.osrigg/ne.nco/nmft//products/blockchain into them in this section). The other side of the coin 10https://superrare.com/ is represented by the impact that this collaboration has 11https://rarible.com/ and will have on privacy and on the right to protection 12https://nbatopshot.com/ and confidentiality of personal data. Fraudulent uses and 13https://www.larvalabs.com/cryptopunks data breaches involving companies and governments are wan1n4ha-tftapssh:/i/ownw-awug.inmpeunttmeda-gr.ecaolmity/style/gucci-virtual-sneakers-nft- increasingly frequent. In fact, the "Cambridge Analytica" 15https://www2.deloitte.com/de/de/pages/technology-media- scandal [56] has caused a stir, where data ideally sold and-telecommunications/articles/blockchain-at-telco.html for market research have instead been used, according 16https://www.forbes.com/sites/forbestechcouncil/2019/11/12/a- to the investigation, to support the election campaign blockchain-based-digital-notary-what-you-need-to- of the US President by a third party government. It will kno1w7 h/?tsthps=:3//9w3ewbwd7.adu4t5o5m7ation.com/en-us/articles/january- therefore be necessary to find a balance between current 2021/the-future-of-blockchain-in-intellectual-property legislation (first and foremost the GDPR - General Data 18https://101blockchains.com/blockchain-in-retail/ Protection Regulation [57, 58]), research/development 19https://playtoearn.net/blockchaingames and the use of these new technologies. In fact, there are 20https://academy.ivanontech.com/blog/exploring-theblockchain-charity-sector-and-charity-projects 21https://eda.europa.eu/webzine/issue14/cover- story/blockchain-technology-in-defence some obvious frictions that it is absolutely necessary to overcome with respect to the principles of Accountability, Data Protection by Design and Data Minimization, in order to make the use of these technologies compliant with European legislation. The European Parliament, having taken note of these and other doubts, has realized an important study [59], in which it suggests three policies to make blockchain projects compatible with the mandatory regulation: the interpretative regulatory orientation; the creation of conduct codes and sectorial certification systems; the promotion of multidisciplinary research [60].
Unfortunately, these indications are not yet suficient to protect technology choices from the "sword of Damocles" represented by the GDPR, so further analysis and insights are needed, very often dropped into the individual use case. Therefore, possible solutions to specific use cases will be the subject of further research.
The rapid evolution of technology and the challenges that the future poses require us to adopt increasingly cutting-edge and up-to-date technological tools. In this perspective, blockchain technology is revolutionizing countless areas of our daily lives. In this article, we initially presented what are the benefits of using blockchain; subsequently, we presented a non-exhaustive list on the state of the art and use of blockchain technology in many application fields. Like all new technologies that try to become mature, blockchain now faces the challenges of integration and coexistence with mandatory regulations. The GDPR has strengthened the protection of our personal data, profoundly changing the way organizations manage the collection, storage and transmission of personal information. Therefore, blockchain must also necessarily comply with these indications and while on one hand, it can be a tool that provides significant benefit in terms of security, reliability, transparency and immutability, on the other it has aspects that create friction and possible compliance issues. Therefore, future studies will be geared towards finding solution elements that integrate and make blockchain technology compatible with the laws of the state, especially with regard to the protection of personal data.