Exploring Blockchain Security:
Blockchain cybersecurity, especially smart contract auditing, has gained significant attention in recent years, thanks to the significant risks involved with on-chain tech. As more people invest in and adopt blockchain-based applications, ensuring the security of these digital assets becomes crucial. This beginner's guide aims to demystify blockchain cybersecurity, covering the basics and providing an understanding of the web3 security industry and essential security measures.
Understanding Blockchain and Cybersecurity
Like most technology, blockchains have multi-layered attack vectors that need to be accounted for. There is the layer 1 blockchain itself and its network, the smart contracts / programs built on it, the front-end interfaces, and that's only a few of them. The primary reason why security is so highly valued, especially within smart contracts, is the fact that they are essentially permanent, open source, barley modifiable programs that handle currency and assets, unlike traditional applications that are typically less permanent and more modifiable over time.
The Primary Blockchain Cybersecurity Industry Applications
- Private Firms: The first common way of securing blockchain protocols is via private specialised firms, such as Hashlock, who work with clients in a number of ways to ensure a protocol lacks vulnerabilities and helps to monitor and support the project over its lifespan. The primary service in these firms is typically smart contract auditing, in which experienced security engineers manually analyse code prior to its deployment to find bugs and suggest fixes.
- Auditing Competitions: Large scale projects often opt to submit their code to auditing competition platforms, in which security engineers flock to compete to find vulnerabilities and exploits, in order to submit their findings for significant financial rewards. These competitions are one of the best ways private firms can find great security engineers.
- Bug-Bounty's: Another common way of protecting a protocol after its launch is via ongoing bug bounty's, in which sums of money are offered to anyone who can find dangerous bugs in a protocol. This is used to incentivise reporting to the protocol team for a reward rather than hacking and stealing the money.
- Security focused technology: Finally, hardware such as cold wallets have become a staple to managing private keys offline and safe from hackers, whilst a variety of software and implementations can also assist to increase on-chain security.
Essential Security Measures
- Secure Your Private Keys: Your private key is like a digital signature that allows you to access and manage your digital assets. Safeguard your private keys by storing them in secure wallets, such as hardware wallets, and avoid sharing them with anyone. Multi-sig is also a great measure that requires multiple signatures for critical operations.
- Be Wary of Phishing Scams: Always double-check the authenticity of emails or messages related to your digital assets. Never share your private keys or sensitive information with anyone, and be cautious when clicking on links or downloading attachments.
- Perform Due Diligence: Before investing in or using a blockchain project, conduct thorough research to ensure it has robust security measures in place and a reputable team and security practices behind it.
- Utilise the applications mentioned above: Work with a security firm, engage in competitions, and ideally have an ongoing bug-bounty to avoid hackers stealing money from your protocol directly. Ensure your tech suite is secure, and utilise tech that increases security.
“Secure your private keys.”
Blockchain technology offers immense potential, but as with any technology, it comes with its own set of cybersecurity challenges. By understanding the basics of blockchain cybersecurity and implementing essential security measures, you can protect your digital assets and contribute to a more secure and trustworthy blockchain ecosystem. Remember, staying informed and vigilant is key to safeguarding your investments in the ever-evolving world of blockchain.