What are Blockchain Security Audits?

What are Blockchain Security Audits?

Security auditing is an integral part of any infrastructure. While various organizations have already started implementing blockchain in their frameworks, hackers are also actively targeted through different endpoint vectors. Few such attacks include exploiting weakly coded data, social engineering, phishing, or gaining access through third-party vendors. With some security evaluation and implementations, catastrophic damage can be evaded effectively- namely with a reliable way of testing called blockchain security audits. Let’s understand more about it in our article today.

What are Blockchain Security Audits?

Before starting with the concept of security auditing in blockchain, let us first know what exactly blockchain is and why auditing it remains a critical issue in the latest technological landscape.

What is a Blockchain?

Blockchain can be defined as a ledger infrastructure for maintaining the records and tracks of transactions. Blockchain enables the peer-to-peer distribution for companies to record the transactions as a permanent block of metadata. The significant advantage of having blockchain is an established chain of information that stays unmodified and provides complete transparency.

Now the hackers may want to steal the information contained in the blockchain through infiltration and attempt to encrypt or destroy it in various ways. The primary purpose of a security audit is to patch such vulnerabilities by proactive detection. An organization can choose to keep periodic cycles of security audits, maintain the latest technologies, and monitor any suspicious activities regularly.

Since multiple organizations opt for blockchain as software, it is necessary to implement specific assessments that will make the infrastructure immune to various attack vectors commonly targeted by malicious hackers.

Different checks and methods to perform Blockchain Security Auditing

One of the key outputs is the SOC reports that includes the analysis done through blockchain auditing. It is the final deliverable to the client as proof of audit. Depending on the organization’s requirement, the audit can analyze and inspect the following:

  1. Code audit to find bugs (intelligent contracts assessments). The attackers often target issues in the code. Different code analysis tools that can perform secure source code reviews are used for this purpose.

  2. Checks to analyze different ways if the private-public key pair is compromised.

  3. Multiple checks need to be implemented to avoid the vulnerabilities arising due to common security misconfigurations or default configurations.

  4. Checks to investigate for bugs in the development cycle.

  5. Blockchain architecture review includes testing right from the smallest building block (also node) of the entire foundation.

Essential facts to know about Blockchain Security Auditing

You need to note some things about the entire auditing process revolving around blockchain technology.

  1. The assessment may take days, weeks, or months to complete.

  2. The audit can be concluded by a third-party auditor or a team of internal assessors.

  3. The idea is to identify the bugs, issues, and vulnerabilities to fix in this assessment called a crypto audit.

  4. The examination is mainly done for clients who translate cryptocurrency or extensively use blockchain in their businesses, which is a primary model for crypto-based fund transfers.

  5. Various auditing tools are built around the blockchain security audit that addresses the ever-evolving challenges. There are still developments being made for detecting the advance attacks.

Commonly followed procedure during the Blockchain Security Auditing

Below are some standard procedures implemented during blockchain security auditing. While it may differ depending on customized and tailored offerings, the underlying methodologies closely resemble the following:

  1. Defining scope of the project/assessment

    This step implies obtaining necessary information that the auditor may need to know about the system or the overall working. This may also include getting access to sensitive information such as roles and access to the keys.

  2. Outlining of test scenario

    This step includes evaluating data flow or defining the test cases where the checks may fail or display a weak security structure.

  3. Document the pieces of evidence

    Keeping the evidence, say screenshots or proof of exploits, on the go, is necessary. It can be the version number, takeaway notes, or mitigation and changes to render.

  4. Checking for vulnerabilities

    Checking for the underlying vulnerabilities in the network, such as API endpoints or other unsecured nodes. Heavy analysis is made to identify any vulnerability that severely affects the blockchain infrastructure.

  5. Threat modeling

    Add-on checks include threat modeling that uses the STRIDE framework to evaluate the threat and risks proactively. While there can be frameworks, the STRIDE is widely adopted to categorize and provide comprehensive crypto-exchange and blockchain-based systems.

    Additionally, within this framework, checks are done to identify whether the system is vulnerable to Spoofing, Tampering, Repudiation, Information Disclosure, and Elevated Privileges- thus making STRIDE.

  6. Presenting a detailed report

    This report is the final deliverable which mentions every detail of the Audit cycle such as– date, scope, active members on the audit, list of vulnerabilities, their description, its impact, the severity of each exposure, tools used, steps to reproduce every issue, ways to mitigate the patches, and lastly, references if any.

    Usually, the auditors may also assist in patching the vulnerabilities and verifying by repeating the checks in a retest cycle of the audit.

    It is also essential to ensure that the third-party vendors associated with the blockchain infrastructure in a company are providing the latest versions. Specific blockchain security auditing includes legal and compliance checks as well. Thus, considering this, the payment portals and financial platforms undergo stringent inspection to stay compliant.

Towards the conclusion

As we conclude on the topic, we hope that this article answers the question, ‘what are blockchain security audits?’. We tried to shed light on the basic meaning of blockchain to how an audit is carried out. Given the ever-growing technology, the attacks rise exponentially to patches.

Various factors beyond technology can weaken a blockchain system, such as rug pulling or lack of expert cybersecurity analysts. But for the low-hanging fruits that one can work on, engaging in a periodic audit cycle is recommended. They include Sybil attacks, crypto-mining malware, DAO attacks, race attack, and many more.

There are also blockchain-based financial and security audits that also look at regulations and compliances along with the security strength. With this, do let us know your views and thoughts in the comments below.

Rishika Desai

Author Bio: This article has been written by Rishika Desai, B.Tech Computer Engineering graduate with 9.57 CGPA from Vishwakarma Institute of Information Technology (VIIT), Pune. Currently works as Threat Intelligence Researcher in CloudSEK. She is a good dancer, poet and a writer. Animal love engulfs her heart and content writing comprises her present. You can follow Rishika on Twitter at @ich_rish99.

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