The process of ensuring that a network is secure
In recent years, blockchain platforms have become the centerpiece of many technical conversations around the world. This is because the technology not only lies at the heart of almost every cryptocurrency in existence today, but also supports a number of independent applications. In this regard, it should be noted that the use of blockchain has penetrated a number of new sectors, including banking, finance, supply chain management, healthcare and gaming, among many others.
As a result of this growing popularity, discussions related to blockchain audits have increased considerably, and rightly so. While blockchains allow for decentralized peer-to-peer transactions between individuals and companies, they are not immune to the problems of hacking and third-party infiltration.
Just a few months ago, crooks managed to breach the gaming-focused blockchain platform Ronin Network, eventually making off with over $600 million. Similarly, late last year, blockchain-based platform Poly Network fell victim to a hack that resulted in the ecosystem losing over $600 million worth of user assets.
There are several common security issues associated with current blockchain networks.
Blockchain’s existing security issue
Although blockchain technology is known for its high level of security and privacy, there have been quite a few cases where networks have contained loopholes and vulnerabilities related to insecure integrations and interactions with third-party applications and servers.
Likewise, certain blockchains have also been found to suffer from functional issues, including vulnerabilities in their native smart contracts. To this point, smart contracts — pieces of self-executing code that run automatically when certain predefined conditions are met — sometimes contain certain bugs that make the platform vulnerable to hackers.
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Finally, some platforms have applications that have not undergone the necessary security assessments, making them potential points of failure that could compromise the security of the entire network at a later date. Despite these glaring issues, many blockchain systems have yet to undergo a major security check or independent security audit.
How are blockchain security audits performed?
Although several automated audit protocols have appeared in the market in recent years, they are not as effective as security experts manually using the tools at their disposal to conduct a detailed audit of a blockchain network.
Blockchain code audits are run in a very systematic way, so that every line of code in the system’s smart contracts can be verified and tested using a static code analysis program. Below are the most important steps related to the blockchain audit process.
Establish the objective of the inspection
There is nothing worse than a poorly organized blockchain security audit as it can not only lead to a lot of confusion regarding the inner workings of the project, but also be a drain on time and resources. Therefore, to avoid being stuck with a lack of clear direction, it is best if companies clearly outline what they might be looking to achieve through the audit.
As the name quite clearly implies, a security audit is meant to identify the most important risks that could potentially affect a system, network or technology stack. During this step of the process, developers typically narrow their goals to specify which area of the platform they want to assess with the greatest rigor.
Not only that, it is best for both the auditor and the company in question to outline a clear action plan that must be followed throughout the operation. This can help prevent the safety assessment from going astray and the best possible result from the process.
Identify the key components of the blockchain ecosystem
Once the core objectives of the audit are set in stone, the next step is usually to identify the key components of the blockchain as well as its various data flow channels. During this phase, audit teams thoroughly analyze the platform’s native technology architecture and associated use cases.
When participating in a smart contract analysis, auditors first analyze the system’s current source code version to ensure a high degree of transparency in the final stages of the audit trail. This step also allows analysts to distinguish between the different versions of code that have already been revised compared to any new changes that may have been made to it since the process began.
Isolate key issues
It’s no secret that blockchain networks consist of nodes and application programming interfaces (APIs) connected to each other using private and public networks. Since these devices are responsible for performing data transfers and other core transactions in the network, auditors tend to study them in great detail, performing a series of tests to ensure that there are no digital leaks present anywhere in their respective frameworks .
Threat modeling
One of the most important aspects of a thorough blockchain security assessment is threat modeling. In its most basic sense, threat modeling allows potential problems – such as data falsification and data manipulation – to be uncovered more easily and precisely. It can also help isolate any potential denial of service attacks, while revealing any chances of data manipulation that may exist.
Solve the problems at hand
Once a thorough review of all potential threats associated with a particular blockchain network is completed, the auditors typically use certain white hats (to let ethical) hacking techniques to exploit the exposed vulnerabilities. This is done to assess their severity and potential long-term consequences for the system. Finally, the auditors suggest remedial measures that can be used by developers to better secure their systems against potential threats.
Blockchain auditing is a must in today’s economic climate
As mentioned earlier, most blockchain audits start by analyzing the basic architecture of the platform to identify and eliminate likely security breaches from the initial design itself. After this, a review of the technology in play and its management framework is carried out. Finally, the auditors seek to identify issues related to smart contacts and apps and study the blockchain’s associated APIs and SDKs. Once all these steps are completed, a security rating is awarded to the company, signaling its market readiness.
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Blockchain security audits are of great importance to any project as it helps identify and weed out any security holes and unpatched vulnerabilities that may come back to haunt the project at a later stage in its lifecycle.
