While blockchains began life to facilitate the development of cryptocurrencies, they are now widely used across businesses for smart contracts, online transaction management, asset record management, and securing critical data. Acting as digital ledgers residing in a distributed infrastructure, they allow the secure storage and structuring of important information in a manner that ensures the integrity and availability of the information. It is the principle of the immutable ledger that underpins the evolution of blockchain.
This technology has created the need for blockchain audits to provide independent assurance of the validity, security, and authenticity of the blockchains. This type of inspection is a highly specialized practice that few organizations can undertake, with our experienced and knowledgeable staff, Hacken is ideally positioned to provide these services. Our auditors have a comprehensive understanding of blockchain and its implementing algorithms and underlying encryption methodology.
Blockchain protocols enable the storage and sharing of transactional information in a manner that preserves the integrity of the information. They provide the foundation for applications that require secure data sharing facilities without having to rely on a central repository to maintain a definitive copy of the data. The protocols establish the rules that govern the transfer of data via the blockchain, including data structures and exchange mechanisms.
The rapid development of cryptocurrencies, online transactions, and smart contracts have been built on blockchain protocols. The users of these applications can be isolated from the implementation details of the blockchain, and the use of peer-to-peer or machine-to-machine infrastructure to support the blockchain protocols provides a decentralized solution for near real-time information sharing. The blockchain protocols rely on cryptographic consensus protocols to ensure the immutability and irreversibility of all transactions made by the application.
While the use of blockchains can improve efficiencies, reduce costs and eliminate the need for a central trusted data custodian, it comes with its specific risks on top of the traditional business risks of the system it replaces.
The security of blockchain protocols is underpinned by cryptographic technology based on private key management. If the end-user manages these keys, then they become solely responsible for the secure management of these keys. Loss of keys will result in loss of access to the information; unauthorized disclosure of keys can result in the compromise of the information by a malicious attacker. The correct management of keys, including backup functions and secure access, are critical controls for these risks.
The security of blockchain protocols is only as good as the code that implements the protocols. Any vulnerabilities in the developed code can be exploited as vulnerabilities in the blockchain. As an emerging technology that is rapidly evolving, access to proficient code developers can present challenges. Through verification and validation of code is required to ensure vulnerabilities are eliminated or mitigated such that no weaknesses in the blockchain itself may be exploited.
The operation of blockchains relies on the principles of consensus and governance. The consensus is defined as the method of establishing a single agreed version of a blockchain ledger that is accepted by all parties that use the blockchain. Governance is defined as the method of maintaining and revising the blockchain protocols. If the parties cannot reach an agreement on issues of consensus and governance, then the blockchain will fail.
Blockchain audits can be summarized as an assessment of the recorded transactions within a blockchain ledger are verifiably complete and correct based upon the available evidence of the transactions recorded in the ledger.
The audit of a blockchain ledger requires a detailed understanding of the technology that implements the protocols in order to understand how to audit blockchain effectively. Hacken is a leader in the field of blockchain audits, with the skills and knowledge to deliver effective solutions for users of blockchain technology