While blockchain technology is designed to protect data integrity, this doesn’t mean that the applications that reside on the blockchain will never be attacked. Keeping blockchain applications from being attacked is a time-consuming and difficult process, which is why blockchain security audits are becoming increasingly important throughout any industry that relies on technology.
Blockchain applications have been used across food safety, finance, banking, and healthcare industries. This guide tells you everything you need to know about blockchain security audits and how your company can benefit from them.
What is Blockchain Security Audit
A blockchain security audit refers to a type of technology that adds support to high-value transactions that are being done on a blockchain. This process uses high-end code analysis to determine if there are any loopholes or vulnerabilities in the system that must be eliminated.
Companies that use a blockchain audit can measure their company’s operations to ensure that all records are accurate and that human error hasn’t resulted in any mistakes. Blockchains are immutable, which means that data processing is always precise. A blockchain auditor’s role is to reduce the risks associated with determining digital asset accuracy.
Even though blockchain is effective when used as a transaction database, there are also a few risks that every company should consider. The primary risk is that access to the private key will be compromised, which can break the encryption. Security measures should be in place to protect and secure the private key. Keep in mind that performing an automated analysis of the smart contract on the blockchain can lower the costs associated with a smart contract audit.
Benefits of a Blockchain Security Audit
Blockchain technology has already begun to transform the business world, seen with the auditing function. Audits that are powered by blockchain are known to be more reliable, collaborative, and cost-effective. Performing a blockchain audit should enhance the verification process’s efficiency while allowing auditors to spend their time providing advisory services instead of controlling information.
Blockchain audits are also secure and are meant to be easy to use. Since these audits can automate basic processes, auditors can obtain insights into how information is placed in a chain. Auditors can also focus on improving control systems when many of the tasks are automated.
These audits are also highly beneficial for businesses that use this type of technology to manage their internal operations. Auditors can perform comprehensive analyses of the data they receive, which allows businesses to make more informed decisions.
As for smart contract security audits, smart contracts can execute transactions immediately, reducing authentication costs and lowering the chance of fraud. Among the most important aspects of a smart contract, the audit is the ability auditors have to perform automated analysis. During this process, errors in blockchain code will be identified to keep audit costs as low as possible.
Issues Associated with a Blockchain Security Audit
Blockchain security audits are highly advantageous for the companies that use them. However, there are a few risks that you should keep in mind, which include scalability problems and data privacy issues. There’s also the potential for jurisdictional risks. Blockchain technology cannot provide users with account security, which is why credential management is essential to protect digital assets.
Make sure that you pair this audit with mining pool monitoring. Your goal should be to keep mining pools below the 40% limit. Experts may also need to verify smart contracts before being updated with best practices for private key storage. The blockchain security audits you perform should be outfitted with protocols that keep routing attacks at bay.
What to Do with the Security Audit Results
Solidity is a programming language to implement smart contracts on blockchain platforms like Ethereum. Smart contract audits are a process used to help you identify system flaws that should be corrected. Any findings from this audit need to be discussed with your developers, after which measures can be taken to improve security if necessary.
Your developer should also test smart contracts and consider all of the audit’s suggestions. The information you obtain from the audit is essential if you want the system to be protected from vulnerabilities. Keep in mind that these audits can only provide some assurance that a protocol is secure. Automated audits may be needed to detect certain vulnerabilities but can still miss some more complex security issues.
When using a smart contract audit with Solidity, you can determine if the smart contracts meet the standards and specifications maintained by the Solidity protocol. However, you won’t be provided with an extensive analysis of the underlying code. Since smart contracts are built directly on top of one another, all their code is independent.
Smart contracts can significantly improve the way that businesses operate by effectively simplifying the verification process as well as the implementation of agreements that are made between sellers and buyers. Because of the added functionality provided by smart contracts, they allow for more trust in digital transactions.
Even though smart contracts are beneficial, errors can be made. When developers make a mistake, an incorrect contract can be put forward and executed. For instance, one user’s Ether might be deposited to a completely different contract instead of running on its own, which doesn’t adhere with real-world business practices. Since mistakes can always be made, performing a blockchain security and smart contract audits is highly recommended.