Conspiracy theorists have often discussed the dangers of an “internet kill switch”—a mechanism that could allow authorities to shut down the internet, potentially replacing free flow of information with censorship and control. Notably, such switches have been activated in nations like China, Iran, and Egypt, and legislation for such a switch was passed in the UK in 2003.
The European Union’s Latest Legislative Move
In a move reminiscent of these controls, the European Union’s new Data Act, which became law on January 11, 2024, introduces a potential “kill switch” for the crypto industry. This legislation could severely impact the foundational principle of blockchain immutability, which ensures that a blockchain’s history remains unaltered.
The Problem with Article 30
Article 30 of the Data Act specifically threatens this principle by allowing for the termination of automated data-sharing agreements—effectively a kill switch at the smart contract layer. Smart contracts, by design, do not accommodate termination or interruptions and are often resistant to upgrades.
This provision could significantly disrupt the use of smart contracts within the European Economic Area (EEA), impacting everything from blockchain’s data integrity to its historical accuracy. If governmental bodies can alter data on these networks, they could potentially manipulate history itself.
The Implications for Decentralized Smart Contracts
If applied to public networks, Article 30 could spell the end for truly decentralized smart contracts in Europe, stifling innovation and possibly leading to capital flight and a stagnated blockchain industry on the continent. This would contradict the traditionally optimistic European stance towards crypto, highlighted by the recent Markets in Crypto Assets (MiCA) legislation.
The Need for Industry Mobilization
The passage of the Data Act with substantial support (500 votes in favor, 23 against) indicates strong momentum, despite minimal opposition from the crypto sector. This situation underscores the need for the European crypto community to unite and press for legislative amendments to Article 30 to safeguard blockchain technology’s future in the EU.
A Call to Action for Clarification and Amendment
As it stands, Article 30 poses a severe risk to the decentralized finance (defi) sector, which relies heavily on public blockchains and smart contracts. The European crypto industry must now advocate for a revision of this problematic clause to prevent irreversible damage to the integrity of the internet as a public record.
This call to action is not just about protecting a technology but preserving the very framework of a free and open digital future.
