C

ryptocurrency is one of the most discussed topics in the world, including in Indonesia. The decision to ban cryptocurrency by Bank Indonesia (BI) is one of the main stories in Indonesian media.

Despite such prohibition, the government has not changed its view on blockchains, which are underlying systems of cryptocurrency transactions.

According to Communications and Information Minister Rudiantara, Indonesia might implement a blockchain system to support various businesses and the government sector. Some predict that blockchains could have a similar effect to that of the internet in the early 1990s.

Blockchains differ from traditional server systems, which use the client-server network model. We, as the users of a server, are called clients. A centralized system is the main feature of a traditional server system. Each client has access to the server; any changes to data must be carried out by accessing the server. Such a server protects all of the data stored in it.

However, an evident problem of the traditional server system is that when the main server is hacked, cyberattacks occur, often with disastrous consequences, and so it is not easy to withdraw or save all data in it. As such, most servers have another backup server to prevent such incidents from taking place.

Famously known as disruptive technology, the blockchain establishes a system that answers a common problem in traditional server systems. The system creates a decentralized server that gives the opportunity for every client who uses a blockchain to have their own data book in a connected chain.

As in cryptocurrency, such as bitcoin, such a data book is called a ledger. The ledger is owned by all clients within the chain; it creates a decentralized server system.

Rather than having a single server as the main source, the blockchain decentralizes it, allowing for antihacking protection, and it is not easily broken down. If one ledger is being hacked, then the other unaffected ledger in the chain will still work.

As a system, it will provide more security in data and sustainable protection. Furthermore, research states that a blockchain can also provide better protection for personal data.

Indonesia has been working to regulate many aspects related to technology since the inception of the Electronic Information and Transactions (ITE) Law
No. 11/2008. A wave of various regulations on technology has followed since the promulgation. Regulations on data centers, disaster recovery centers and personal data protection are completing the wave.

This shows that the government is taking note of technological developments. Thus, preparation in this aspect is paramount to cover the effects of developments in technology, especially disruptive ones.

In 2016, the Communications and Information Ministry issued a regulation concerning data protection in electronic systems. Part of the regulation concerns the obligation for every person or entity who is considered an organizer of an electronic system to locate its data center and disaster recovery center in Indonesia.

Practically, when e-commerce rises, the use of data centers escalates, since electronic systems are the main business platforms of e-commerce. With e-commerce companies suddenly requiring data centers in Indonesia, this also affects other companies that need to utilize electronic systems to develop.

Companies can comply by establishing a data center in Indonesia since the ministry allows companies to rent data centers. However, a consequence to having a data center is the requirement of a disaster recovery center.

To build one is not a low-cost move. This creates a dilemma for companies over whether they need to build a disaster recovery center, considering that the ministry has already drafted certain guidelines on such centers, including requirements to adhere to rules on location, building and sustainability of disaster
recovery.

Despite the tenacity of the government in regulating disaster recovery centers, practically, it might be not easy to implement. In this situation, blockchains might fill the gap for companies looking to develop servers in Indonesia without fulfilling the disaster recovery center requirement.

Even though cyberattacks can occur on part of a blockchain network, data elsewhere will not be lost, and it will not inhibit the operation of the rest of the network. By having a network chain in blockchains, disaster recovery centers might be irrelevant. The possibility of using blockchain technology might arise in the coming years.

However, questions, too, will arise. Are we ready yet to deal with this rapid development while embracing the fourth industrial revolution? We might seem ready, but innovation will not only revolve around personal data and data centers. It is a challenge for Indonesia to follow innovation with conforming regulations.

There are many aspects to consider in creating a regulation, including but not limited to the market, business actors, related industries and customers. It is not easy to standardize new technology in the form of law.

One thing that the government needs to consider is that standardization cannot limit innovation. This emerging technology might need room to improve and legislation cannot be the one that hinders the improvement.

Business actors will definitely utilize technology that could develop their businesses and create more profits. The blockchain could be one of the options. The government needs to act promptly to come up with answers to any issues related to the implementation of blockchains.

It is important to realize that as technology will develop faster, we as humans must also work toward developing ourselves, alongside these rapid technological changes.
___________________________