RIMT International Journal of Multidisciplinary Research (RIJMR)

Abstract: Digital currency, underpinned by decentralized ledger technologies (DLT) like block chain, fundamentally relies on cryptographic cyber security to establish trust and maintain immutability without central oversight (Nakamoto, 2008). This paper argues that cyber security is the single most critical factor determining the legitimacy, functionality, and future widespread adoption of digital currency. While cryptography is the technology’s core enabler, systemic vulnerabilities at centralized interfaces (exchanges), within decentralized application code (smart contracts), and at the end-user level pose an existential threat. This paper examines the foundational cryptographic mechanisms, analyzes the evolving threat landscape (including 51% attacks, reentrancy attacks, and exchange breaches), and discusses proactive mitigation strategies, such as multi-signature wallets and post-quantum cryptography (Kwon & Kim, 2021). Ultimately, the transition of digital currency from a speculative niche asset to a mainstream financial instrument hinges on the industry’s sustained commitment to institutional-grade digital defense and robust regulatory frameworks.