How are Blockchain Applications Made Secure?

In this lesson you will learn about the best practices projects follow to ensure the security of blockchain based applications such as crypto wallets, layer-1 solutions, and other Decentralized Applications (DApps). By the end of the lesson you will be able to discern which projects are practicing the best practices in order to make their projects secure.
August 19, 2022

How are Blockchain Applications Made Secure?

Innovations in blockchain technology are rocketing through various industries from finance to healthcare and law. These new technologies can enable many to work in unprecedented ways. However, even new things need to be maintained. Modification and maintenance is a continual process to keep any worthwhile system up and running. New innovations in system architecture can open up vulnerabilities that might have not been there before. Therefore it is very important that projects keep up with the best security practices.

In this lesson you will learn about the best practices projects follow to ensure the security of blockchain based applications such as crypto wallets,  layer-1 solutions, and other Decentralized Applications (DApps). By the end of the lesson you will be able to discern which projects are practicing the best practices in order to make their projects secure.
Here are the best practices that any top blockchain project should be following:
1. Regular Blockchain Maintenance

Blockchain maintenance can help bugs that may be slowing down the network, or vulnerabilities that can be exploited by an attack. By conducting consistent blockchain maintenance procedures and monitoring an organization can not only defend itself from internal and external threats but also identify opportunities for innovation. Through regular maintenance of nodes and systems, projects will be taking the proactive step to stay safe and ahead of the innovation curve. A common maintenance cycle is to monitor, analyze, improve, and innovate. Crypto Cybersecurity companies often have solutions that allow a blockchain to consistently monitor and evaluate security. Crypto projects should also make it part of governance that research must be done regularly to determine current security risks with the technology they apply.

2. Dapp Security: Maintaining Dapps

Decentralized applications (Dapps) are hosted on a blockchain and can be used by anyone on a computer or mobile device. These applications could possibly hold vulnerabilities or unknown entry points, making it essential to conduct regular maintenance of these applications. Regularly monitoring code helps to detect any irregularities there may be and to resolve them as quickly as possible. Projects can also put out bug bounties on their applications or even on an entire blockchain. These bounties have white-hat-hackers that try to break the system in order to discover exploits that can be fixed before it is exploited. 

3. Smart Contract Security Checks

Smart contracts are sets of code within a blockchain, which trigger transactions based on programmed conditions. They create another point of vulnerability because their integrity determines the reliability of the operation and the trustworthiness of the results. There should be review of code inhouse and through the use of auditors and third parties.

4. Blockchain Network Security and Interoperability

Due to the complexity of the interoperable nature of blockchains, many parties are working concurrently. Not just chains, but network infrastructure, databases, servers and many more, all of which could have possible security exploits. Part of the maintenance of a chain should be to review and monitor all of these aspects and ensure that it's secure. It should be included in the basic governance of the chain to oversee this monitoring.

Another lens through which one can view is by seeing transacting applications and smart contracts at scale on a blockchain. Are there vulnerabilities in scaling architecture or new functionality etc? Threats increase as interfaces and systems complexity expands; security flaws and errors at any point in the ecosystem can lead to insufficient user authentication, unauthorized transactions, misconfigurations, data manipulation and other unpredictable results.

5. Customize Governance Specific to Blockchain

As users use the blockchain by monitoring them it can be determined who the bad actors are, conflicts of parties, and common errors. This could enable the design of a framework that incorporates specific compliance needs to secure the project. 

6. Security of On- and Off-Chain Data

Generally, one of the ways to get a blockchain faster is by altering the size of things that are stored on the block or by using a side-chain. Security measures and best practices should also be applied to side-chains and their interactions with the main chain.

7. Using Trusted Auditors and Third Parties

All additional security measures like bug bounties, penetration tests, audits of smart contracts and source code should be done by trusted third parties. These are used to stay up to date on new algorithms, hacks, novel attack types, or new malware. 

Because the blockchain industry evolves so quickly it's critically important to do a continual evaluation of security to not compromise the project or its users. With the introduction of new technologies and different ways of doing things, there is always the possibility of an exploit. Therefore security must be a recurring practice. 

Lesson Recap (TL:DR)

Blockchain is a fairly new industry that is growing rapidly. Ensuring security within each application is must to build trust and to protect projects and future consumers of the tech. Here are 7 practices projects can to protect themselves from malicious acts:

  • Regular blockchain maintenance - checking and rechecking for vulnerabilities within the ecosystem an application is built on. 
  • DApp specific maintenance - looking at a decentralized applications code, testing, retesting, and upgrading when needed. May make use of bug bounties to have more eyes on over-all security.
  • Smart Contract Security Checks - Ensure the processes within a smart contract are smooth and void of vulnerabilities, use third parties and auditors to assist in checking.
  • Customize governance specific to blockchain - a blockchain specific framework can help the monitoring for bad actors and can raise security through specialized compliance needs.
  • Security of on- and off-chain data - Ensure that best practices are utilized whether it be on the main blockchain, its blocks or on sidechains. 
  • Using Trusted Auditors and third parties - A fresh set of eyes, through bug bounties, or through industry experts like Hacken can help secure DApps. 

  1. IBM. (n.d). What is Blockchain Security?.
  2. Ethereum. (2022, 18 August). Ethereum Security and Scam Prevention. 
  3. Hacken. (2022, 27 May). How to Improve your Cybersecurity?.
  4. Abrol, A. (n.d.). Crypto Off-Chain vs. On-Chain Transactions: How Do They Differ?. -  

About Hacken

Hacken is a cybersecurity auditor born in 2017 with a vision of transforming Web3 into a more ethical place. With 5+ years of experience, hundreds of blockchain partners, and thousands of secured crypto projects, Hacken protects technological businesses and crypto communities worldwide with the most competitive suite of professional cybersecurity services. 

Hacken in figures:

  • 1,070+ clients, including THORSTARTER, ConstitutionDAO, XTblock, Paribus, to name a few
  • 180+ partners including Avalanche, Polkastarter, CoinMarketCap, Weld Money, CoinGecko, Solana Foundation, Simplex, to name a few
  • 23/50 top crypto exchanges are Hacken clients
  • $10B in users’ assets saved from being stolen by hackers

Strategic goal: get a 20% share in the Web 3.0 cybersecurity market by 2024.

For more on Hacken follow them on:
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