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Alibaba Seeks To Increase Administrative Intervention In Blockchain With New Patent

Chinese e-commerce giant Alibaba has filed a patent for a blockchain system which allows government agencies or other third-party trustworthy institutions to halt a smart contract or freeze an account in case of illegal activities.


According to the patent application published by the United States Patent and Trademark Office on October 4th, the Hangzhou-based firm submitted the application in March through Alibaba Group Holdings Limited which is registered in Grand Cayman.

The patent document highlights that while blockchain technology boasts a number of  advantageous features like openness, unchangeability, and decentralization, it fails to take some practical factors in the regulated real world into account.

Further, Alibaba’s researchers express concern that the standard smart contract which are self-executing contracts written in code and existing on blockchain do not allow legal authorities to freeze user accounts which are engaging in illegal transactions or otherwise facilitate administrative intervention in a blockchain networks.

“In real life, however, there is a type of administrative intervention activities in the category of special transactions. For example, when a user performs illegal activities, a court order may be executed to freeze the user’s account. However, this operation activity conflicts with smart contracts in existing blockchains and cannot be carried out. Therefore, there is a need for a blockchain-based transaction processing method that enables special transactions like administrative intervention in a blockchain.” The patent explains.

Under this proposed system,dedicated administrative accounts are entitled to send a “special transactions” to nodes, and then nodes can invoke a corresponding smart contract to perform operation instructions when determining that it is issued legally.

The patent looks to develop a blockchain-empowered system for effective administrative supervision of all accounts across the entire network, although the supervision is limited. “As a result, effective administrative supervision can be performed on all accounts in a blockchain network, and this type of supervision is limited, which will not restrict normal transactions in the blockchain network”. The document states.

The patent author concedes that since the administrative supervision accounts will become prime targets of hackers, the system possibly poses risks for the blockchain network. As a result, decentralized supervisory power are recommended among multiple designated accounts.

This move of Alibaba, which filed the second largest number of blockchain-related patents with 43 filings in 2017, sparks heated discussions in China’s blockchain community. Some people think this system will compromise blockchain technology’s inherent features such as a peer-to-peer method and immutability.

“This is the blockchain of Chinese characteristics, and a LAN chain”.A netizen said.


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