Top 3 Elements Of The Blockchain Audit Ecosystem

Top 3 Elements Of The Blockchain Audit Ecosystem

Blockchain News
July 6, 2023 by Diana Ambolis
Over the past few years, blockchain platforms have taken center stage in several global IT discussions. This is so that various independent applications can be supported in addition to the technology that powers practically all of the current cryptocurrencies. In this sense, it is important to emphasize that a variety of unique industries, including banking,
Essential Traits Of A Successful Blockchain Implementation

Over the past few years, blockchain platforms have taken center stage in several global IT discussions. This is so that various independent applications can be supported in addition to the technology that powers practically all of the current cryptocurrencies. In this sense, it is important to emphasize that a variety of unique industries, including banking, finance, supply chain management, healthcare, and gambling, among many others, have embraced the use of blockchain.

Discussions on blockchain audits have significantly expanded due to this rising popularity, and appropriately so. Blockchains enable decentralized peer-to-peer transactions between people and businesses but are not impervious to hacking and outside intrusion problems.

A few months back, thieves broke into the gaming-focused Ronin Network blockchain platform and made off with more than $600 million. Similarly, last year, a hacking scheme targeting the blockchain-based platform Poly Network cost the ecosystem user assets worth over $600 million.

The present blockchain networks have several widespread security problems.

Blockchain’s current security issue

Despite the fact that blockchain technology is well-known for its high levels of security and privacy, there have been several instances when networks have featured flaws and vulnerabilities connected to unsafe interfaces and interactions with external servers and apps.

Smart contracts are bits of self-executing code that execute automatically when specific predetermined circumstances are met. Similar to this, it has been discovered that several blockchains have functional problems, including flaws in their native intelligent contracts. To date, smart contracts occasionally have errors that leave the platform susceptible to hackers.

Last but not least, specific platforms are running programs that haven’t gone through the proper security checks, making them possible points of failure that might jeopardize the entire network’s security. Despite these problems, many blockchain systems have not yet undergone a thorough security audit or independent security review.

How are security assessments for blockchains carried out?

Even though several automated audit protocols have recently entered the market, they are not nearly as effective as security professionals manually employing the tools at their disposal to thoroughly audit a blockchain network.

Every piece of code in the system’s smart contracts may be appropriately validated and tested using a static code analysis application, thanks to the highly systematic way that blockchain code audits operate. The essential steps involved in the blockchain audit process are shown below.

Determine the audit’s objective.

Nothing is worse than a poorly planned blockchain security audit, which can waste time and resources and create confusion about the project’s inner workings. Therefore, it is preferable that businesses explicitly state what they may be aiming to achieve through their audit to prevent being trapped with a lack of direction.

A security audit is intended to discover the significant risks that could impact a system, network, or tech stack, as the name quite plainly implies. Developers typically focus their objectives at this stage on specifying which component of their platform they want to test rigorously.

Furthermore, it is best for the auditor and the organization in issue to lay out a precise plan of action that must be followed during the entire operation. This can help ensure that the security assessment produces the best results possible and doesn’t go astray.

List the essential elements of the blockchain audit ecosystem.

The top 3 elements of blockchain audit system are:

    1. Immutability: Blockchain is a distributed ledger technology that makes it very difficult to change or delete data once it has been added to the chain. This makes it an ideal platform for storing audit data, as auditors can be confident that the data they are reviewing is accurate and complete.
Blockchain Immutability
    1. Transparency: Blockchain is a transparent system, meaning that all transactions are recorded on the public ledger. This makes it easy for auditors to track and verify transactions, and to identify any potential problems.
Blockchain Transparency
    1. Security: Blockchain is a secure system, as it uses cryptography to protect data from unauthorized access. This makes it an ideal platform for storing sensitive audit data.
Blockchain Security

These three elements make blockchain a powerful tool for auditing. By using blockchain, auditors can improve the efficiency and effectiveness of their audits, and can provide greater assurance to their clients.

In addition to these three elements, there are a number of other factors that auditors should consider when auditing blockchain-based systems. These include:

  • The type of blockchain being used
  • The level of security of the blockchain
  • The completeness and accuracy of the data stored on the blockchain
  • The risks associated with blockchain-based systems

The next phase is typically to define the essential elements of the blockchain audit and its various data flow routes once the audit’s primary goals have been established. At this phase, the audit teams examine the platform’s native tech architecture and related use cases in-depth.

Auditors examine the current source code version of the system before engaging in any smart contract analysis to guarantee a high level of transparency across the audit trail. This step also enables analysts to identify between the many audited versions of code and any fresh modifications that may have been made since the process started.

Isolate important issues

Nodes and application programming interfaces (APIs) are connected utilizing both private and public networks in blockchain networks, which is not a secret. Auditors often examine these organizations in great detail, doing several tests to ensure that there are no digital leaks in their frameworks because they are in charge of carrying out data relays and other fundamental network operations.

Threat analysis

Threat modeling is one of the most crucial components of a good blockchain security evaluation. In its most basic sense, threat modeling makes it easier and more precise to identify potential issues like data spoofing and tampering. Additionally, it can aid in the isolation of any potential denial-of-service attacks and reveal any potential for data tampering.

Resolution of the relevant concerns

The auditors typically use specific white hat (also known as ethical) hacking techniques to attack the vulnerabilities identified once a thorough analysis of all potential hazards connected to a particular blockchain network has been performed. This is done to evaluate their seriousness and any possible systemic long-term effects. The auditors also recommend corrective actions that developers might take to strengthen the security of their systems against potential threats.

Also, read – How Blockchain is Sponsoring More Transparency In Hollywood

Blockchain audits are essential in the current economic environment.

As was previously noted, most blockchain audits begin by looking at the platform’s fundamental architecture to find and remove potential security flaws from the beginning of the design. A review of the technology in use and its governance structure is then conducted. Finally, the auditors investigate the APIs and SDKs related to the blockchain to find problems with smart contacts and applications. When all these stages have been completed, the company is given a security rating indicating its market readiness.

Blockchain security audits are crucial for any project since they assist in finding and eliminating any security gaps and unpatched vulnerabilities that can later harm the endeavor.