Alibaba Files Blockchain Patent for Smart Contract Illegal Activity Intervention Cases

Alibaba Files Patent for Blockchain System

E-commerce giant Alibaba has filed a patent application with the United States Patent and Trademark Office. The patent is for a blockchain-based system that can allow a third-party administrator to intervene in the smart contract process in the event of illegal activities. On October 4, the patent office published the application.

Smart contracts essentially eliminate the middle man during a negotiation and contract formation process. The contracts are self-executing and the parties’ agreement terms are written into the coding.

Alibaba’s patent application describes a blockchain-powered transaction method enabling authorized parties to halt user accounts associated with illegal activities and to intervene on the network. The patent application places an emphasis on the fact that there are advantages to blockchain technology, such as openness, unchangeability, and decentralization. However, blockchain is unable to provide conditions in specific cases. As the patent indicates:

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, his operation activity conflicts with smart contracts in existing blockchains and cannot be carried out.

The patent application also identifies Alibaba’s interest in developing a system to effectively supervise the administration of all accounts on a blockchain network. The supervision is not broad, but limited so that normal transactions cannot be restricted on the network. As the patent application explains, “The issuing account recorded in various embodiments may be an account owned by a government agency or a trustful institution.” And that:

“Upon receiving an operation instruction sent from a designated account, a node in a blockchain network can invoke a corresponding smart contract when determining that the operation instruction is issued legally, to execute corresponding operations on an account corresponding to the to-be-operated account information, which achieves a goal of supervision on accounts in the blockchain and solves the problem of processing special transactions like administrative intervention in a blockchain.”

Currently, Ethereum blockchain allows for upgrade of contracts and issuance where the logical and data are separated into different contracts. Such contracts are complex though, much more so than traditional contracts. As a result, they are susceptible to bugs. Supposedly, Alibaba’s technology may be able to expand on the ability of administrators to simplify amendments to smart contracts.