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For quite some time, conspiracy theorists have raised concerns about the concept of an infamous “internet kill switch,” arguing that any potential point of failure that could allow authorities to shut down the internet poses a threat to the free flow of information and expression, potentially leading to censorship and control.
Similar measures resembling an internet kill switch have been employed in countries like China, Iran, and Egypt, with legislation for such controls passing in the United Kingdom as early as 2003. In a concerning turn of events, the European Union has now introduced a provision for a kill switch in the Data Act, which came into effect on January 11, 2024. This poses a significant risk to the fundamental principle of immutability in the crypto industry, where a blockchain’s history is meant to remain unaltered. Despite the potential threat, the industry seemed oblivious as the legislation made its way through the European legislative process and became law.
Specifically, Article 30 of the Data Act introduces a clause that could effectively shut down smart contracts—a kill switch at the smart contract layer. This provision mandates the termination of automated data-sharing agreements in the event of a security breach, undermining the concept of immutability. Smart contracts are designed to be uninterrupted and unalterable, making them a crucial innovation in the industry. If the Data Act is enforced, it could significantly impact the use of smart contracts within the European Economic Area (EEA).
Blockchain technology is built on the premise of preserving the complete history and data trail of events. If authorities gain the ability to manipulate, replace, or falsify data on the network, it could lead to the distortion of historical records and the spread of misinformation. The potential impact of Article 30 on public networks could essentially cripple the European crypto industry, with decentralized smart contracts facing potential outlawing.
The lack of significant resistance to access control requirements, which contradict the permissionless nature of public blockchains, does not bode well for the future of crypto in Europe. Parties engaging in data-sharing through smart contracts would be obligated to comply with Article 30, raising uncertainties about the inclusion of decentralized finance (defi) and the circumstances surrounding access control mechanisms.
With the recent enactment of the Markets in Crypto Assets (MiCA) legislation, uncertainties loom over the future of the European blockchain industry. The vague wording of Article 30 could have unintended and detrimental consequences for the region’s crypto sector and its global competitiveness. It is imperative for regulators to reconsider key aspects of the provision to avoid driving the industry overseas.
While the Data Act received overwhelming approval, it is crucial for the European crypto community to unite and demand clarification and potential amendments to Article 30. The future of blockchain technology within the bloc is at stake, with defi and public blockchains relying on smart contracts facing significant threats. It is essential to ensure that EU authorities do not have the power to manipulate the internet’s modern public record through ill-conceived legislation.
For more insights:
Decentralized real-time communication is the solution for data privacy | Opinion
About the Author:
Kadan Stadelmann is a blockchain developer, operations security expert, and the Chief Technology Officer at Komodo Platform. With a background in operations security, technology startups, and cryptography, Kadan has been involved in blockchain technology since 2011 and joined the Komodo team in 2016. Follow Us on Google News.