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Cybersecurity Guidelines for Digital Financial Asset Trading Providers in Indonesia
By distributing the ledger across multiple nodes, blockchain technology eliminates single points of failure and enhances resistance to attacks. Within blockchain technology, there is the concept of a smart contract. A smart contract is an automated digital agreement based on code that executes independently within the blockchain network, without the need for third-party intervention. When certain predefined conditions embedded in the code are met, the smart contract automatically executes the specified instructions, such as transferring digital assets or granting access permissions automatically. Since smart contracts run on a blockchain platform, they share its characteristics, i.e., decentralization, transparency, and immutability, meaning that every execution of the contract is permanently recorded and cannot be manipulated. However, vulnerabilities can arise in unaudited smart contract code, making it susceptible to exploitation and potentially resulting in financial loss 4 . In addition to smart contracts, another critical aspect of blockchain security is wallet management. A wallet is a tool used to store and manage crypto assets using a private key and a public key, with the private key stored within the wallet. In practice, wallets can be classified into hot wallets (connected to the internet and easily accessible, but more vulnerable to attacks) and cold wallets (not connected to the internet, making them more secure against phishing, malware, and hacking). The use of cold wallet becomes a best practice standard for long-term crypto asset storage, particularly by entities such as digital asset bourses and virtual asset custodians. Thus, the integration of blockchain as the foundational infrastructure, smart contracts as the transaction automation logic, and wallet management as the access control to assets forms a technological ecosystem that complements and supports both security and efficiency in a blockchain-based digital economy.
4 https://link.springer.com/article/10.1007/s12083-021-01127-0
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