How to Achieve Data Privacy in Blockchain Ledgers

In 2017, the blockchain concept took center stage. It was suddenly everywhere in the news, and people were talking about it as if it were the Holy Grail. Just consider the constant stream of news on the Bitcoin cryptocurrency and payment system, one of the early blockchain implementations. And now people are thinking more broadly, and talking about all kinds of use cases for blockchain ledgers — from processing land titles and loans to sharing product construction plans.

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That’s all exciting stuff. But the story shouldn’t stop there. There’s another side to the blockchain concept that people need to focus on: data privacy — which is currently a missing link in the blockchain.

Let’s take Bitcoin as an example. In order to let the simple smart contract of Bitcoin validate the distributed ledger continuously, all transaction data — including amount, source account and target account — must be available to all network participants in unencrypted form. This means that the much-heralded anonymity on the Bitcoin network is the more the result of massive obscurity than of real security measures like encryption and privacy.

Here’s the unvarnished truth: Massive obscurity does not equate to data privacy — and that’s an issue when it comes to almost any serious business use case for blockchain. Most use cases won’t work if you can’t secure blockchain transactions against read access from everybody out there.

So how do you build data encryption and, by extension, privacy into a blockchain? The answer lies in a new kind of IT stack that enables blockchain-based applications to reliably process private data. This topic is explored in a just-released white paper that looks at the trustworthy processing of private data stored on SAP HANA® databases powered by Dell EMC Ready Solutions for SAP, using SAP Leonardo Blockchain as a Service (BaaS) and trusted computing appliances from Camelot Innovative Technologies Lab – CamelotIT Lab – running Intel-based Dell Enterprise Workstations.

While the full story of how it’s done is beyond the scope of this blog. Here’s the quick version of the story: The paper walks through a blockchain approach that keeps private data completely off-chain. This approach allows all parties to store their private data in their local environments only, while registering the private data on-chain by storing a hash of it for later verification of its integrity.

There’s a lot more to this story, of course. You can read all the details in the new Dell EMC white paper titled “Blockchain for Off-Chain Smart Contracts in a SAP environment” Download the paper

Note: In addition to Dr. Marten Neubauer from the Dell EMC Global SAP Center of Excellence, the linked white paper was authored by our partner Camelot ITLab, a leading SAP consultancy for digital value chain management with a comprehensive portfolio of blockchain products and services leveraging Camelot Hypertrust Network and SAP Leonardo.

About the Author: Marten Neubauer

Dr. Marten Neubauer is SAP Enterprise Solution Consultant at Dell EMC’s Global SAP Center of Excellence, responsible for developing and driving new solution approaches for the healthcare and life sciences business. A former CIO for a national German healthcare provider himself and a Ph.D. for system integration into OR theaters, Marten has a breadth of experience in the healthcare and life sciences segment. Marten is driving a number of thought leader initiatives to support SAP solutions with Dell EMC infrastructure.