Will blockchain rev­o­lu­tionise the way in which data is man­aged and stored in a Data Warehouse?

In the “dig­i­tal age” the amount of data our appli­ca­tions col­lect is not lin­ear, but rather expo­nen­tial. It is esti­mat­ed that we pro­duce 2.5 quin­til­lion bytes of data every day and with the emer­gence of new tech­nolo­gies like IoT, this num­ber is grow­ing at a rapid pace. Today’s diverse appli­ca­tion end users and busi­ness stake­hold­ers depend on struc­tured and unstruc­tured data to per­form spe­cif­ic func­tions. They need a Data Ware­house! Does blockchain hold incred­i­ble poten­tial, espe­cial­ly in its role in ware­house dig­i­tal­i­sa­tion? Blockchain might be able to pro­vide solu­tions that lever­age the right file stor­age, rela­tion­al data­base, and data ware­house / lake to enable organ­i­sa­tions to have the flex­i­bil­i­ty, scal­a­bil­i­ty, and ana­lyt­ics need­ed to sup­port their strate­gic goals. 

In the lat­est of her Duet inter­views, Dr Cal­daro­la, edi­tor of Data Ware­house as well as author of Big Data and Law, and Dr Revo­lidis dis­cuss the poten­tial of blockchain in a data warehouse.

You have writ­ten an arti­cle about blockchain in our book Data Ware­house. Blockchain is known in con­nec­tion with Bit­coin.
Could you explain what a blockchain is in the con­text of a data warehouse?

Dr Revo­lidis: Cer­tain­ly, when most peo­ple hear the term “blockchain,” they imme­di­ate­ly asso­ciate it with Bit­coin and oth­er cryp­tocur­ren­cies. How­ev­er, the util­i­ty and poten­tial appli­ca­tions of blockchain tech­nol­o­gy extend beyond the realm of cryptocurrencies.

At its core, a blockchain is a dis­trib­uted and immutable ledger, where trans­ac­tions are record­ed in a series of blocks that are linked togeth­er and secured using cryp­to­graph­ic prin­ci­ples. Each block con­tains a cryp­to­graph­ic hash of the pre­vi­ous block, form­ing a con­tin­u­ous chain, which makes retroac­tive alter­ations prac­ti­cal­ly impos­si­ble with­out alter­ing sub­se­quent blocks.

One can observe many poten­tial appli­ca­tions in the con­text of a data warehouse:

1. Immutable Data Stor­age: One of the pri­ma­ry virtues of blockchain is its immutabil­i­ty. Once data is record­ed on a blockchain, it can­not be altered with­out the con­sen­sus of the net­work. This can intro­duce a lev­el of data integri­ty and authen­tic­i­ty to data ware­hous­ing that tra­di­tion­al data­bas­es may strug­gle to match. For instance, if an organ­i­sa­tion’s data ware­house were to employ blockchain prin­ci­ples, his­tor­i­cal data would be pre­served with a high lev­el of con­fi­dence in its accu­ra­cy over time.
2. Decen­tral­i­sa­tion and Ver­i­fi­ca­tion: Unlike tra­di­tion­al data ware­hous­es that cen­tralise data stor­age, blockchains can oper­ate on a decen­tralised mod­el. Each par­tic­i­pant in a blockchain net­work has access to the entire data­base and its com­plete his­to­ry. This decen­tral­i­sa­tion can pro­vide a mech­a­nism for data val­i­da­tion and ver­i­fi­ca­tion in ware­hous­ing con­texts, thus ensur­ing that data has not been tam­pered with.
3. Inte­gra­tion and Inter­op­er­abil­i­ty: Blockchain can act as a bridge between dif­fer­ent data silos and sys­tems, offer­ing a uni­fied and trans­par­ent view of data. This can be par­tic­u­lar­ly ben­e­fi­cial in sce­nar­ios where data from dif­fer­ent sources needs to be inte­grat­ed into a sin­gle ware­house, ensur­ing that the data is con­sis­tent and reli­able across the board.
4. Enhanced Secu­ri­ty: The cryp­to­graph­ic nature of blockchain offers a high­er lev­el of secu­ri­ty for data. This can be of immense val­ue for sen­si­tive data stored in a data ware­house, ensur­ing that the data remains con­fi­den­tial and resis­tant to unau­tho­rised changes.
5. Trace­abil­i­ty and Audit Trails: Every trans­ac­tion on a blockchain is record­ed with a time­stamp and linked to the pre­vi­ous trans­ac­tion. This pro­vides a trans­par­ent audit trail of data changes, which can be par­tic­u­lar­ly valu­able for indus­tries that require rig­or­ous data track­ing and compliance.

To sum­marise, while blockchain is wide­ly recog­nised for its role in the world of cryp­tocur­ren­cies, its foun­da­tion­al prin­ci­ples of immutabil­i­ty, trans­paren­cy, and decen­tral­i­sa­tion can offer trans­for­ma­tive poten­tial for data ware­hous­ing, while enhanc­ing data integri­ty, secu­ri­ty, and traceability.

My opin­ion is:

“The trust blockchain bestows is not mere­ly cod­ed; it’s a del­i­cate dance between

soft­ware and tra­di­tion­al legal frame­works, each guid­ing the other”.

Dr Ioan­nis Revolidis

A data ware­house can con­tain per­son­al and non-per­son­al data. When a blockchain is deployed in a data ware­house, who does the blockchain serve? The oper­a­tor for the “bet­ter” pro­cess­ing of “his/her” data? Or for the data sub­ject and device own­ers who make their data avail­able for “tam­per-proof” pur­pose-spe­cif­ic pro­cess­ing in the data warehouse?

Blockchains may pro­vide mul­ti­fac­eted ben­e­fits that can serve mul­ti­ple stake­hold­ers simul­ta­ne­ous­ly. In fact, espe­cial­ly when per­son­al data is being processed, the adop­tion of a blockchain solu­tion should nec­es­sar­i­ly serve the inter­ests of both the oper­a­tor of the data ware­house and those of the data sub­jects. After all, that’s exact­ly what the GDPR wants to happen

 (see art. 1(1) and (3) of the GDPR). 

In that sense, I would say that when a Blockchain solu­tion is incor­po­rat­ed with­in a data ware­house, both the oper­a­tor and the user/data sub­ject can derive advan­tages from its deploy­ment, albeit in dif­fer­ent ways.

As regards the oper­a­tor I would gen­er­al­ly assume that the fol­low­ing ben­e­fits could be extracted:

1. Data Integri­ty and Trust­wor­thi­ness: By lever­ag­ing blockchain’s immutabil­i­ty, Oper­a­tors can ensure that the stored data has not been tam­pered with, thus enhanc­ing the reli­a­bil­i­ty of the warehouse.
2. Auditabil­i­ty: Every data trans­ac­tion is trans­par­ent­ly record­ed, which aids in com­pre­hen­sive audit­ing process­es. This trans­paren­cy can be ben­e­fi­cial for sec­tors that are reg­u­lat­ed and require strin­gent data documentation.
3. Oper­a­tional Effi­cien­cy: Blockchain can facil­i­tate real-time data shar­ing and inte­gra­tion across dif­fer­ent sys­tems, poten­tial­ly improv­ing data ware­hous­ing operations.

As regards the user/data sub­ject I would envis­age the fol­low­ing advan­tages, which align well with cer­tain reg­u­la­to­ry goals, especially:

1. Data Sov­er­eign­ty: With some blockchain imple­men­ta­tions, indi­vid­u­als can main­tain a sub­stan­tial lev­el of con­trol over their per­son­al data, deter­min­ing who can access it and for what pur­pose. This aligns well with prin­ci­ples of mod­ern data pro­tec­tion, where user con­sent and con­trol are paramount.
2. Assur­ance of Data Integri­ty: Indi­vid­u­als can be more con­fi­dent that their data, once entered into a blockchain-backed data ware­house, remains unal­tered and genuine.
3. Trans­paren­cy and Trace­abil­i­ty: If indi­vid­u­als are grant­ed access, they can view the his­to­ry of their data trans­ac­tions, offer­ing trans­paren­cy into how their data is being used and processed.

I would like to stress, nonethe­less, that the afore­men­tioned ben­e­fits only hold true if cer­tain design choic­es are being made when the sys­tem is being pro­grammed. What I mean is mere­ly adopt­ing a blockchain-based solu­tion will not auto­mat­i­cal­ly guar­an­tee the ben­e­fits I men­tioned above. Incor­po­rat­ing a blockchain solu­tion to a data ware­house is a deci­sion that should not be tak­en light­ly, since there are sev­er­al para­me­ters that need care­ful consideration.

For exam­ple, I would nev­er advise an organ­i­sa­tion that oper­ates a data ware­house to imple­ment a blockchain solu­tion based on a pub­lic blockchain. This would put a huge com­pli­ance bur­den on the shoul­ders of this organ­i­sa­tion and might even jeop­ar­dise the appli­ca­tion of basic data pro­tec­tion prin­ci­ples as regards the per­son­al infor­ma­tion of users/data sub­jects, espe­cial­ly if the stor­age of their per­son­al infor­ma­tion would be “on-chain”. The risks asso­ci­at­ed with such a choice might even negate many of the expect­ed benefits.

Anoth­er exam­ple would be the desired lev­el of data sov­er­eign­ty on the user/data sub­ject end. It would not be enough to set up a blockchain in order to achieve this kind of sov­er­eign­ty. Addi­tion­al soft­ware, most prob­a­bly in the form of smart con­tracts, must com­ple­ment a robust iden­ti­ty and data man­age­ment design, by virtue of which the oper­a­tor of the data ware­house will make the nec­es­sary arrange­ments that will fos­ter a sub­stan­tial degree of user empow­er­ment. In addi­tion, we must also take into account that the deploy­ment of a blockchain solu­tion would be a major cul­tur­al shift for users. While they can expect the ben­e­fits I men­tioned above, they must also take on the admin­is­tra­tion of sev­er­al key process­es relat­ed to infor­ma­tion and data. Not every­one might wish to do so.

With Bit­coin, the blockchain enables decen­tralised struc­tures, self-deter­mi­na­tion, bar­ri­er-free access, no iden­ti­fi­ca­tion, secu­ri­ty against manip­u­la­tion, per­son­al respon­si­bil­i­ty and free­dom. Who ben­e­fits from these advan­tages of a data ware­house with blockchain technology?

When inte­grat­ing blockchain tech­nol­o­gy with­in a data ware­house, many of the advan­tages inher­ent to blockchain ecosys­tems can indeed per­me­ate the entire organ­i­sa­tion, although the con­text and stake­hold­ers involved may dif­fer. Let’s break down some pos­si­ble outcomes. 

Let’s start with the fact that blockchains gen­er­al­ly pro­mote decen­tralised struc­tures. In this con­text, I think that both oper­a­tors and users of the data ware­house can ben­e­fit. For oper­a­tors, decen­tral­i­sa­tion can pro­vide an added lay­er of trust with­in their organ­i­sa­tion. In addi­tion, it might also enhance the robust­ness of their ecosys­tem against data fail­ures and cen­tral points of attack. For users, it can offer a sense of shared own­er­ship and assur­ance that no sin­gle enti­ty has over­ar­ch­ing con­trol, pro­vid­ed nonethe­less that code and gov­er­nance assur­ances are put in place so that gov­er­nance of the data sets is suf­fi­cient­ly decentralised.

When I con­sid­er the sec­ond advan­tage you men­tioned, name­ly self-deter­mi­na­tion, I would say that those ben­e­fit­ing would pri­mar­i­ly be indi­vid­ual data sub­jects or enti­ties con­tribut­ing data to the ware­house. They might have more say in how their data is used, espe­cial­ly if smart con­tracts or oth­er blockchain-based gov­er­nance mech­a­nisms are employed.

When we turn to a bar­ri­er-free access, I think that this is a rather sen­si­tive point. I believe that the pub­lic and open nature of Bit­coin aligns well with what this par­tic­u­lar imple­men­ta­tion strives to achieve, but I’m afraid that with­in the con­text of a data ware­house this degree of open­ness might be unde­sir­able or even risky.

Manip­u­la­tion secu­ri­ty, on the oth­er hand, is a net gain for both oper­a­tors and data sub­jects. The immutabil­i­ty of blockchain records ensures that once data is record­ed, it is resis­tant to unau­tho­rised alter­ations. This builds trust in the data’s integri­ty for every­one involved.

Final­ly, you made a valid point by refer­ring to indi­vid­ual respon­si­bil­i­ty when think­ing about blockchain appli­ca­tions. I also allud­ed to the same in my answer to your pre­vi­ous ques­tion. While all stake­hold­ers can ben­e­fit from the imple­men­ta­tion of blockchain-based solu­tions, there is indeed a height­ened need for edu­ca­tion and aware­ness. Just as los­ing a pri­vate key in Bit­coin means los­ing access to funds, mis­man­age­ment in a blockchain-based data ware­house can lead to irre­versible con­se­quences. In blockchains, free­dom (in terms of data access, shar­ing and even mon­eti­sa­tion) comes with responsibility.

A data ware­house must be secured with­in the frame­work of infor­ma­tion secu­ri­ty and at the same time legal oblig­a­tions (data pro­tec­tion, for exam­ple) must be adhered to. This is usu­al­ly achieved by turn­ing to tech­ni­cal mea­sures for effi­cient and quick han­dling. Can blockchain tech­nol­o­gy help with this?

Indeed, blockchain tech­nol­o­gy, espe­cial­ly the use of smart con­tracts, can be piv­otal in ensur­ing both infor­ma­tion secu­ri­ty and com­pli­ance with legal obligations.

As regards infor­ma­tion secu­ri­ty, a num­ber of advan­tages come to mind. For exam­ple, smart con­tracts could help achieve encryp­tion and con­fi­den­tial­i­ty since they can be designed to incor­po­rate cryp­to­graph­ic encryp­tion meth­ods. This ensures that sen­si­tive data remains con­fi­den­tial and only acces­si­ble to par­ties hav­ing the cor­rect decryp­tion keys. By stor­ing encrypt­ed data and using smart con­tracts to man­age access, unau­tho­rised enti­ties can be effec­tive­ly barred from read­ing sen­si­tive infor­ma­tion. In addi­tion, smart con­tracts can auto­mate and enforce strin­gent access con­trols based on pre­de­fined con­di­tions, ensur­ing that data is only acces­si­ble to autho­rised par­ties and under the right con­di­tions. For addi­tion­al secu­ri­ty, sen­si­tive data can be tokenised using smart con­tracts. Instead of stor­ing the actu­al data, a token rep­re­sent­ing that data is stored. The real data can be stored off-chain in a secure envi­ron­ment, while the token on the blockchain pro­vides a secure and trans­par­ent way to trans­act with the data ware­house system.

In terms of com­pli­ance, smart con­tracts may guar­an­tee auto­mat­ed and con­sis­tent enforce­ment. Smart con­tracts are self-exe­cut­ing soft­ware where the terms of the agree­ment or con­di­tions are writ­ten into lines of code. Once con­di­tions are met, actions are auto­mat­i­cal­ly exe­cut­ed. This ensures that pre­de­fined com­pli­ance mea­sures are con­sis­tent­ly enforced with­out human inter­ven­tion, reduc­ing the poten­tial for errors or biases.

Nonethe­less, the deploy­ment of such data secu­ri­ty and com­pli­ance solu­tions does not come with­out challenges.

Even though smart con­tracts are immutable and can­not be tam­pered with once deployed, they are only as robust as their code. If there are bugs or vul­ner­a­bil­i­ties in the con­trac­t’s code, they could be exploit­ed, lead­ing to unin­tend­ed con­se­quences. More­over, once iden­ti­fied, these vul­ner­a­bil­i­ties can­not be rec­ti­fied with­out deploy­ing a new ver­sion of the con­tract, which might not always be straightforward.

The deter­min­is­tic nature of smart con­tracts is anoth­er chal­lenge, espe­cial­ly in terms of com­pli­ance. While the deter­min­is­tic nature of smart con­tracts ensures they per­form exact­ly as writ­ten, this rigid­i­ty can be a draw­back. Laws and reg­u­la­tions are nuanced and sub­ject to inter­pre­ta­tion, and smart con­tracts might strug­gle to cap­ture these nuances. This could lead to over­sim­pli­fi­ca­tions or dan­ger­ous mis­in­ter­pre­ta­tions of legal obligations.

More­over, for many com­pli­ance mea­sures, smart con­tracts may need to inter­act with exter­nal data sources or sys­tems (often referred to as “ora­cles”). Depen­dence on exter­nal data intro­duces poten­tial points of fail­ure or manipulation.

Incor­po­rat­ing smart con­tracts for data secu­ri­ty and com­pli­ance in a data ware­house or any data man­age­ment sys­tem requires a robust under­stand­ing of the under­ly­ing blockchain plat­form, the nature of the data, and the poten­tial threats. While they offer many advan­tages for automat­ing and bol­ster­ing data secu­ri­ty and com­pli­ance mea­sures, they must be imple­ment­ed thought­ful­ly and in con­junc­tion with oth­er secu­ri­ty and com­pli­ance best prac­tices to ensure a tru­ly secure and com­pli­ant environment.

A data ware­house – espe­cial­ly if it con­tains per­son­al data – must com­ply with the GDPR. Since per­son­al data is obtained from dif­fer­ent sources, and because dif­fer­ent data of the dif­fer­ent peo­ple hold­ing the rights to said data may be used for dif­fer­ent pur­pos­es and since the (for­eign) data of (for­eign) right hold­ers may be sub­ject to dif­fer­ent nation­al data pro­tec­tion laws, the data ware­house oper­a­tor has to deal with dif­fer­ent vari­ables. Is blockchain a tech­nol­o­gy which can help data ware­house oper­a­tors man­age and imple­ment pre­cise­ly these data pro­tec­tion variables?

While some com­men­ta­tors view blockchains as a com­pli­ance prob­lem and not a com­pli­ance solu­tion, I think that a more bal­anced approach would be fairer.

Blockchain tech­nol­o­gy can be imple­ment­ed to lever­age its dis­tinct fea­tures, includ­ing user pseu­do­nymi­ty, data prove­nance, access per­mis­sions, and adher­ence to var­i­ous nation­al data pro­tec­tion regulations.

We dis­cussed ear­li­er, for exam­ple, that blockchains oper­ate in a default state of user pseu­do­nymi­ty. This is a well-recog­nised data pro­tec­tion prin­ci­ple that has even made its way with­in the text of the GDPR itself. Art. 32(1)(a) of the GDPR explic­it­ly refers to pseu­do­nymi­sa­tion as a com­pli­ance mech­a­nism and since blockchains offer this by default, it would be unfair not to recog­nise their poten­tial for data pro­tec­tion compliance.

But there are oth­er blockchain qual­i­ties that can sup­port data pro­tec­tion principles.

Blockchain’s inher­ent trans­paren­cy and immutabil­i­ty can con­tribute to the trace­abil­i­ty and val­i­da­tion of data ori­gin. Every trans­ac­tion or data entry on a blockchain is time­stamped and becomes part of an unal­ter­able record, which could aid in ensur­ing that data is sourced and processed cor­rect­ly. This is a qual­i­ty that not only sup­ports the com­pli­ance efforts of oper­a­tors, but might even prove a valu­able resource for super­vis­ing author­i­ties. More­over, blockchain’s abil­i­ty to man­age and con­trol access to data via cryp­to­graph­ic means ensures data integri­ty and secu­ri­ty. Final­ly, smart con­tracts can be deployed to man­age and auto­mate con­sent pro­to­cols. This automa­tion might play a cru­cial role in ensur­ing data is used in accor­dance with stip­u­lat­ed guide­lines and might mit­i­gate man­u­al over­sight errors.

Does­n’t tag­ging pro­vide bet­ter options for man­ag­ing vari­ables? Can’t this tech­nol­o­gy han­dle fur­ther oblig­a­tions such as con­sent and revo­ca­tion man­age­ment, incom­ing and out­go­ing con­trols, doc­u­men­ta­tion in the pro­cess­ing reg­is­ter, dele­tion and reten­tion oblig­a­tions, etc. bet­ter than blockchains?

That is a very inter­est­ing point.

Tag­ging presents notable advan­tages espe­cial­ly with­in the con­text of data ware­hous­es and data pro­tec­tion com­pli­ance. When con­sid­er­ing the adapt­abil­i­ty of data man­age­ment sys­tems, tag­ging often stands out due to its inher­ent flexibility.

I would, nonethe­less, view the two solu­tions not as com­pet­ing with one anoth­er. I would say that they can com­ple­ment one anoth­er. Tag­ging can be com­bined with blockchain-based com­part­ments in order to enhance the lev­el of com­pli­ance with data pro­tec­tion requirements.

For exam­ple, while tag­ging can help man­age the dif­fer­ent vari­ables of com­pli­ance, blockchain com­po­nents can ensure that com­pli­ance is auto­mat­ed and hard­wired into the system.

Let’s look, for exam­ple, at con­sent and revo­ca­tion man­age­ment. The gran­u­lar­i­ty pro­vid­ed by tag­ging offers a stream­lined way to cat­e­gorise data accord­ing to con­sent cri­te­ria. Should a user revoke their con­sent, the rel­e­vant tag can swift­ly iden­ti­fy and facil­i­tate appro­pri­ate actions con­cern­ing the asso­ci­at­ed data. Exe­cu­tion of the appro­pri­ate actions can be auto­mat­ed and guar­an­teed by smart con­tracts in an immutable manner.

Data Ware­house oper­a­tors could, there­fore, com­bine all avail­able tools and achieve high lev­els of effi­cien­cy and com­pli­ance. Blockchains and/or blockchain-based solu­tions can always be com­bined with oth­er soft­ware in order to max­imise the expect­ed ben­e­fits. As with all tech­no­log­i­cal archi­tec­tures the cru­cial ques­tion will always be which tool can bet­ter serve the goals we want to attain. In that sense, blockchain-based appli­ca­tions can be part of a wider ecosys­tem of tech­no­log­i­cal solu­tions, pro­vid­ed they are deployed effi­cient­ly and for pur­pos­es that align well with their inher­ent qualities.

Blockchain tech­nol­o­gy is char­ac­terised by the fact that those affect­ed can­not be iden­ti­fied. Nev­er­the­less, after their con­tri­bu­tion to blockchain tech­nol­o­gy, pseu­do­nyms are used, i.e., the data ware­house oper­a­tor remains with­in the scope of the GDPR although “no iden­ti­fi­ca­tion” con­notes anonymi­sa­tion. What advan­tages does the use of blockchain bring to the data ware­house oper­a­tor? Or does it only bring advan­tages if the data ware­house has a cer­tain legal form – such as a cooperative?

Thank you very much for this ques­tion, it allows me to make an impor­tant clarification.

While blockchains inher­ent­ly mask the authen­tic iden­ti­ties of par­tic­i­pants by sub­sti­tut­ing names with pub­lic keys, this should not be sim­plis­ti­cal­ly con­strued as pro­vid­ing absolute anonymi­ty. Though indus­try dis­course might frame it as such, the legal per­spec­tive offers a nuanced under­stand­ing. Specif­i­cal­ly, when the data inscribed on a blockchain ledger per­tains to an iden­ti­fied or iden­ti­fi­able indi­vid­ual, it assumes the sta­tus of per­son­al data with­in the con­text of the GDPR. It remains a mat­ter of con­tention as to whom this applies; not all par­ties access­ing a blockchain net­work pos­sess the tech­ni­cal, legal, or prac­ti­cal means to re-iden­ti­fy the ecosys­tem’s par­tic­i­pants. This con­tention is exem­pli­fied in the recent rul­ing of the Gen­er­al Court in T‑557/20 SRB vs EDPS (refer to paras 86 – 101). Intrin­si­cal­ly, what blockchains facil­i­tate aligns with the GDPR’s con­cep­tu­al­i­sa­tion of pseu­do­nymi­sa­tion. This inher­ent attribute of blockchains should not be over­looked. As under­scored in Art. 32(1)(a) GDPR, pseu­do­nymi­sa­tion is recog­nised as a piv­otal mech­a­nism for data pro­tec­tion com­pli­ance and presents numer­ous advan­tages for data ware­house systems.

For exam­ple, by ren­der­ing data less iden­ti­fi­able, it reduces the risk asso­ci­at­ed with poten­tial data breach­es or unau­tho­rised access. If a breach does occur, the pseu­do­nymised data, in the absence of the addi­tion­al decryp­tion keys or ref­er­ence data, is less like­ly to be exploit­ed for mali­cious pur­pos­es, pro­vid­ing an added lay­er of security.

Simul­ta­ne­ous­ly, pseu­do­nymi­sa­tion allows organ­i­sa­tions to con­tin­ue lever­ag­ing their data for ana­lyt­i­cal, research, and oper­a­tional pur­pos­es. While the data is ren­dered less iden­ti­fi­able, its under­ly­ing struc­ture and rel­e­vance are pre­served, ensur­ing that the organ­i­sa­tion can still derive valu­able insights and per­form nec­es­sary data operations.

Fur­ther­more, by incor­po­rat­ing pseu­do­nymi­sa­tion, data ware­house sys­tems can fos­ter trust among stake­hold­ers, clients, and end-users. Assur­ing indi­vid­u­als that their per­son­al data is treat­ed with the utmost care and dili­gence strength­ens the organ­i­sa­tion’s rep­u­ta­tion and can lead to enhanced cus­tomer loy­al­ty and stake­hold­er confidence.

In essence, the inte­gra­tion of pseu­do­nymi­sa­tion into data ware­house sys­tems not only for­ti­fies data secu­ri­ty and ensures reg­u­la­to­ry align­ment but also pre­serves the func­tion­al util­i­ty of the data, cre­at­ing a bal­ance between data pro­tec­tion and oper­a­tional effi­cien­cy. This is an impor­tant qual­i­ty that blockchain-based appli­ca­tions can pro­mote by default.

Nonethe­less, I would like to stress that the pseu­do­nymi­sa­tion of user data can be a dou­ble-edged sword in a data ware­hous­ing con­text. While pseu­do­nymi­ty can ben­e­fit data sub­jects con­cerned about pri­va­cy and data pro­tec­tion, cer­tain appli­ca­tions of data ware­hous­es, espe­cial­ly those in reg­u­lat­ed indus­tries, may require clear iden­ti­fi­ca­tion pro­to­cols. A data ware­house must find a way to bal­ance pri­va­cy, data pro­tec­tion and trace­abil­i­ty. This will not always be an easy task. 

Blockchain are char­ac­terised by being non-manip­u­la­ble‑a fea­ture that is intend­ed to offer secu­ri­ty to cit­i­zens. Does it also bring ben­e­fits to the data ware­house oper­a­tor? If so, what are they?

The Blockchain’s defin­ing fea­ture is its immutabil­i­ty, which aims to pro­vide a degree of secu­ri­ty to users. From the per­spec­tive of a data ware­house oper­a­tor, this char­ac­ter­is­tic does present cer­tain oper­a­tional impli­ca­tions. The immutable nature of blockchain ensures that once data is entered onto the sys­tem, its integri­ty is main­tained, mak­ing sub­se­quent alter­ations notably chal­leng­ing. This immutabil­i­ty can aid data ware­house oper­a­tors in estab­lish­ing a con­sis­tent and trace­able record, which can be of sig­nif­i­cance when ver­i­fy­ing com­pli­ance with cer­tain legal and reg­u­la­to­ry standards.

The trans­paren­cy inher­ent in blockchain means that every data trans­ac­tion is record­ed and can be traced. For data ware­house oper­a­tors, this offers a struc­tured overview of data trans­ac­tions, which might be valu­able in con­texts where data val­i­da­tion or ver­i­fi­ca­tion is essential.

While blockchain’s pri­ma­ry design might focus on secur­ing user data, its fea­tures, par­tic­u­lar­ly immutabil­i­ty and trans­paren­cy, have poten­tial impli­ca­tions for data ware­house oper­a­tions, par­tic­u­lar­ly in areas relat­ed to data integri­ty and com­pli­ance verification.

Why is it worth­while for a data ware­house oper­a­tor to think about using blockchain technology?

In the realm of data man­age­ment and ware­hous­ing, trust is para­mount. The fun­da­men­tal propo­si­tion of blockchain tech­nol­o­gy is its abil­i­ty to fos­ter and estab­lish trust. At its core, blockchains serve as trust mech­a­nisms. They pro­vide a trans­par­ent and immutable ledger, ensur­ing that data entries, once made, can­not be eas­i­ly tam­pered with or altered with­out leav­ing a trace­able record. This char­ac­ter­is­tic is espe­cial­ly valu­able in sce­nar­ios where the ver­i­fi­a­bil­i­ty and authen­tic­i­ty of data are crucial.

Now, the major ques­tion a data ware­house must grap­ple with when pon­der­ing the adop­tion of blockchain tech­nol­o­gy is that of trust. Is there a trust deficit that the organ­i­sa­tion is try­ing to address? And if so, is it an inter­nal or exter­nal trust issue?

Inter­nal­ly, there could be sit­u­a­tions where depart­ments with­in an organ­i­sa­tion do not ful­ly trust each oth­er due to var­i­ous rea­sons, per­haps stem­ming from oper­a­tional dis­crep­an­cies and silos. By imple­ment­ing a blockchain-based solu­tion, the need for inter-depart­men­tal trust can be min­imised as the tech­nol­o­gy itself ensures data accu­ra­cy and integri­ty, mak­ing it a sin­gle source of truth that every­one can rely on.

Exter­nal­ly, trust chal­lenges can arise when an organ­i­sa­tion wish­es to con­vey to its users or stake­hold­ers that it oper­ates with trans­paren­cy and cred­i­bil­i­ty. For busi­ness­es that rely heav­i­ly on user data, it’s increas­ing­ly impor­tant to assure users that their data is man­aged secure­ly, trans­par­ent­ly, and in a man­ner that grants them bet­ter con­trol. Imple­ment­ing a blockchain solu­tion can act as a ges­ture of com­mit­ment to these prin­ci­ples. The immutable nature of blockchain ensures that data-relat­ed oper­a­tions are trans­par­ent, while its decen­tralised struc­ture can poten­tial­ly offer users more direct con­trol and secu­ri­ty over their data.

Dr Revo­lidis, thank you for shar­ing your insights on the blockchain tech­nol­o­gy with regard to the use in a data warehouse.

Thank you, Dr Cal­daro­la, and I look for­ward to read­ing your upcom­ing inter­views with recog­nised experts, delv­ing even deep­er into this fas­ci­nat­ing topic.