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European data law came into force in January 2024 and contains far-reaching requirements that could force smart contract developers to comply with strict requirements. Termination of live smart contract, etc. Even if smart contracts are immutable and therefore cannot be modified in any way.
“Safe Termination and Suspension” Ensure that a mechanism exists to terminate ongoing transaction execution. A smart contract shall contain internal functionality that can reset the contract or instruct it to stop or abort its operations to avoid future (accidental) execution. ” Read section 30 of the Data Act.
Essentially, the data law outlaws immutable smart contracts, i.e. true blockchain applications, and after much optimism regarding the MiCA (Markets in Cryptoassets) Bill passed last year, Europe's This could be the beginning of dark days for the cryptocurrency industry.
Strict rules in data laws are likely to cause an exodus of crypto talent from the continent unless lawmakers see the error of their ways And soon.
Data law requirements for a mechanism to securely terminate or suspend smart contracts amount to a kill switch for blockchain-based apps.
This is completely contrary to the nature of blockchain innovation.
Smart contracts are designed to avoid interference or possible termination by authorities. After all, that's the whole point of cutting out the middle man.
Such a kill switch is also a single point of failure and can create further exploitation risks, potentially putting users' funds at significant risk.
The crypto bill is a disaster.
Although data laws are formally designed to remove barriers to data access, the blockchain context creates barriers to access. Talk about unintended consequences.
That is correct The Data Act accomplishes the opposite of its purpose.
Apart from the fact that it makes smart contracts illegal, the Data Act also does not clearly define smart contracts and the circumstances in which the authorities may request their termination.
The European blockchain industry should be very nervous because there is so much uncertainty. It is up to the cryptocurrency industry to clean up this mess.
Compromising blockchain immutability is killing innovation. Immutability is how blockchain guarantees the integrity of data passing through the ledger.
Information added to a blockchain typically needs to be immutable so that no entity can manipulate, replace, or tamper with the data on the network. However, EU lawmakers chose to ignore this innovation.
The immutability of public blockchains strengthens trust in the system and reduces audit time and costs. This is an essential feature of a real blockchain.
Businesses especially want immutability because it provides organizations with the data integrity they need.
Blockchain’s immutability allows organizations to demonstrate to stakeholders that certain information is accurate.
The proven history of the transaction ledger facilitates the audit process and improves efficiency.
Use cases that emerge in this area include supply chain management, financial disclosure, and identity management.
Many of the data problems that businesses face can be solved with blockchain-based immutability.
One of the strengths of blockchain technology is that it stores a complete history and data trail.
The integrity of a blockchain can be proven at any time by recalculating the block hash, allowing organizations and regulators to detect fraud.
The entire crypto industry across Europe needs to come together to oppose Article 30 of the Data Act, which amounts to a backdoor and threatens to freeze the entire crypto industry.
Blockchain immutability must be protected at all times, and it is up to the European cryptocurrency industry to take the lead.
Kadan Stadelmann is a blockchain developer, operational security expert, and chief technology officer at Komodo Platform. His experience ranges from working in operational security in the government sector to launching technology startups, application development and cryptography.
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