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can ethereum contracts control other assets, where the actual contract owns the btc and will only release it back to the address it was sent from (to avoid a DAO type hack) once a certain signal is recieved to release, and have it run autonomous?

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Ethereum contract cannot control other blockchain's asset because other blockchains are not connected at any point with ethereum blockchain in current scenario but you can use oraclize to get connected with the external world!

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