LIMITATIONS OF SMART CONTRACTS
Human-written computer code makes up smart contracts. As a result of the code's faults and weaknesses, there are several hazards involved. Ideally, they should be created and implemented by skilled programmers, especially when dealing with confidential data or significant sums of money.
In addition, others contend that the majority of the solutions and functions supplied by smart contracts may be provided by centralized systems. The primary distinction is that smart contracts operate on a decentralized P2P network as opposed to a centralized server. Additionally, because they are built on a blockchain system, they are frequently either unchangeable or extremely difficult to alter.
Being unchangeable can be excellent in some circumstances and disastrous in others. For instance, when a Decentralized Autonomous Organization (DAO) under the name of "The DAO" was compromised in 2016, errors in the smart contract code allowed millions of ether (ETH) to be taken.
Developers were unable to correct the code because their smart contract was immutable. Eventually, a hard fork occurred as a result, creating a second Ethereum chain. In other words, one chain "reverted" the hack and gave the money back to its rightful owners (this is a feature of the current Ethereum blockchain). The alternative chain, which is now known as Ethereum Classic, chose not to interfere with the hack because it believed that events that occur on a blockchain should never be changed.
It's crucial to understand that the issue is unrelated to the Ethereum blockchain. Instead, a bad smart contract implementation was to blame.
The ambiguous legal status of smart contracts is another drawback. Not only is it illegal in most nations, but smart contracts also don't fit into the existing legal system.
For instance, many contracts demand that both parties be legally identified and over the age of 18. These standards could be jeopardized by the pseudonymity offered by blockchain technology and the absence of middlemen. The legal enforceability of smart contracts is a serious difficulty, especially when it comes to borderless, distributed networks, even though there are potential answers.
Very important speech you have shared with us.
We all should know about this Smart contracts
The smart contract obviously has limitations just like everything else. Thanks for sharing