- The European Union legislators are pushing for a kill switch in smart contracts in a new legislation.
- 500 voted in favour, 23 against, and 110 abstained.
A part of legislation adopted by the European Parliament on March 14 – concerning smart contracts – has attracted criticism in the cryptocurrency community that it could endanger the core of the self-executing blockchain programs.
Article 30 of the Data Act requires smart contracts to cease being immutable and include a termination or interruption option to avoid accidental executions.
”Safe termination and interruptions: ensure that a mechanism exists to terminate the continued executions of transactions: smart contracts shall include internal functions, which can reset or instruct the contract to stop or interrupt the operation to avoid future accidental executions,” the draft noted. ”The conditions under which a smart contract could be reset, instructed to stop, or interrupted should be clearly and transparently defined.”
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Smart Contracts And The Aspect Of Immutability
Smart contracts are computer programs domiciled in a blockchain like Ethereum that self-execute when certain predetermined conditions are met. They cannot be deleted by default, and their transactions cannot be reversed. This is the bone of contention feared could wipe out the core feature defining smart contracts. Furthermore, experts believe the legislation lacks clarity.
Thibault Schrepel, an associate professor at the VU University of Amsterdam, raised some of the concerns in a tweet: ‘‘The immutability of smart contracts is key to their survival, i.e., immutability is their main differentiating feature. As currently drafted, Article 30 does not clarify who should be able to terminate the continued execution of transactions. Is it the creator of the smart contracts, public authorities, courts,?’’
The bill received an overwhelming majority, with 500 representatives voting for, 23 against, and 110 abstaining. The Data Act could become law, pending the outcome of the trilogues, where the EU council and the EU commission will deliberate on the details.
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