The EU’s General Data Protection Regulation (GDPR) requires companies to delete user data after leaving their networks. Since blockchain works on the premise of immutable, self-referencing data, deleting user information on current blockchain protocols is not feasible, leaving security tokens at another dead end.
However, new technological developments could eliminate this barrier to security token adoption. German blockchain startup Lition is developing a second layer solution on top of the popular blockchain platform Ethereum that would allow security tokens to be GDPR compliant, and open the doors to borderless securities within the European Economic Area.
Lition is accomplishing this by building a new breed of blockchain, combining a public mainchain with private, deletable sidechains, allowing the network to both provide blockchain functionality while protecting user data through GDPR compliance. This hybrid model offers a competitive advantage over other blockchain platforms hoping to provide infrastructure for STOs.
Security tokens have the potential to update securities for the digital age but the road to widespread adoption still has several hurdles to clear before it can make good on the promises of borderless, compliant securities. Platforms like Lition are presenting a way to roll out this new technology by providing concrete technical solutions to the legislative barriers that have held back so many blockchain ideas.
As of late, the rallying cry echoing through the blockchain space has been, “wait for blockchain-specific legislation.” Lition is saying no, there is not time to waste. The community must keep building and pushing this revolutionary technology forward.