In recent years, the popularity of blockchain technology has been rising due to its unique benefits: it removes a central authority, eliminates intermediaries, provides real-time immutable settlement, reduces operational costs, and has high levels of transparency. Though the rewards of this technology are very significant, it also brings new cybersecurity risks. Like any other modern IT technology, blockchain comes with its own vulnerability risks.
As the need for adopting this technology is increasing due to web3 advancements, the first step is understanding the security issues and establishing TRUST in blockchain technology. In this article, let's dive in to get an overview of the security framework for blockchains. Here, we share some major security considerations if you migrate from current web2 technology to web3-based blockchain.
Blockchain Security Framework
Until recently, some in the blockchain community believed this technology is “unhackable," but multiple cyberattacks have proved this assumption wrong. The blockchain platforms for smart contracts and blockchain applications were exploited due to their security flaws. These vulnerabilities can be mitigated through best practices that provide security and enable safe blockchain applications.
- Security of smart contracts A smart contract is a self-executable, self-enforcing pre-programmed code that serves as an agreement to execute a transaction on a blockchain node. Smart contracts have many significant security vulnerabilities and risks due to differences in the development lifecycle compared to the conventional software development life cycle, where testing, integration, and maintenance are repeated. Since smart contract code is immutable and cannot be altered after it is added to a blockchain, developers have to implement specific functionalities to change the behavior of smart contracts in the future. Unlike ordinary software code, which can be patched and fixed at any time, the smart contract's code cannot be modified once uploaded on the blockchain network. The developers must code smart contracts very carefully, meeting all security parameters. Continual testing throughout the development, testing, and production phases during the code development should be an integral part of the design and development of smart contracts.
BlockChainSentry vulnerability management platform is a web3-based automation tool that facilitates quick code scanning in static and dynamic environments for developers to eliminate vulnerabilities and develop a secured smart contract. If the developer does not have the skills to test the developed smart contract code, this tool comes in handy for the self-detection of code weaknesses.
- Forks A fork, in the most fundamental sense, is when a blockchain splits into two possible directions. It is like a side lane of the highway that can diverge from hard-coded old rules of smart contracts to new rules parallelly. The network's transactional history or a new standard for determining what constitutes a valid transaction causes this fork. There are two types of forks: hard and soft. Forks can bring on the following risks: Soft forks only partially supported by the network's nodes run the risk of becoming the network's shortest chain and being abandoned. A hard fork in the chain allows it to divide into two independent chains, leading to fragmentation or loss of control.
- Crypto Algorithms The usage of cryptographic algorithms and protocols is one of the fundamental components of blockchain technology. A cryptographic algorithm failure prevents the blockchain from continuing and forces its termination. Although it is exceedingly challenging, it has been done in the past and undoubtedly will be done in the future, especially as computer power continues to increase tremendously. Since one must rely on the larger community, it is impossible to manage it on public blockchains. However, it can be managed in the case of private blockchains.
- Crypto Key Management Public and private keys are used in blockchain technology, whether in a private or public chain. A private key is used to sign a transaction on the blockchain and can stand in for either a natural person or a business. A procedure for managing keys must be in place for any company which is considering the implementation of blockchain technology and address issues, including what to do if a private key is hacked or lost.
- Access control Blockchain has different access controls, such as how to add a node to the blockchain network, what kind of transactions can be executed on the network and who can use it. Based on the many responsibilities that need to be filled, an organization should have a variety of degrees of permission. Regular authorization reviews are required at least once per month, and users' permissions must be revoked as necessary.
- Complete Security This entails finishing and regularly assessing the business's most important assets, driving maximum automation, and providing the best cybersecurity advisory and implementation. This covers technical security compliance, continuous smart contract auditing, blockchain protocol security assessment, DevOps, code audits, security best practices, web application pen-testing, cloud provider pen-testing, API pen-testing, and red team custom engagements.
- Advanced Penetration Testing To find critical vulnerabilities in applications before they are exploited, advanced pen testing uses the most up-to-date offensive security strategy and a thorough security review. Pen testing encompasses many assets, including bridges, cryptocurrency wallets, online apps, mobile apps, digital custody solutions, cloud security, APIs, wallets, Layer 1 blockchains, and other assets.
- Automation & DevOps Automated scanning, the creation of CI/CD pipelines, cloud deployment, SAST/DAST integration, and background to support the formation of a productive DevSecOps culture are all included.
Defining security governance in distributed environments requires more work than in centralized peers. Proper governance models, regulatory standards, and third-party risk management are the three main security governance components that must be achieved to show strong governance in blockchain-based systems. Data protection, application protection, and infrastructure protection are preventative measures for sound cyber security. Advanced knowledge about blockchain security architecture can help evaluate your business's security posture with a critical eye and implement changes that offer robust protection from cyber threats.
Contact our blockchain security specialists at hello@blockchainsentry to learn more about how blockchain enterprises can protect their digital assets and follow the proper blockchain security frameworks and best practices.