Blockchain Security Audit
Process, Team, Costs
In IT security since 2003 and blockchain development since 2020, ScienceSoft helps organizations across 30+ industries ensure adequate cyber protection of their blockchain solutions.
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Blockchain Security Audit: The Essence
Blockchain security audit is an examination of an organization’s security controls against blockchain- and industry-specific standards and best practices. It verifies that a company has taken all required measures to ensure blockchain network protection, chaincode reliability, and record integrity.
ScienceSoft relies on its compliance expertise and experience in blockchain development and cybersecurity services to identify and promptly fix blockchain security flaws.
Blockchain Solutions and Components to Cover by a Security Audit
Blockchain networks
Blockchain platforms and marketplaces
Decentralized apps
Crypto wallets
Cryptocurrencies and crypto tokens
Tokenized assets
Smart contracts
Consensus algorithms
Blockchain protocols
Miner nodes
Cross-chain bridges
Oracles
Security Audit Types
Below, ScienceSoft's consultants describe the common audit types based on key aspects of blockchain security. In real projects, our specialists adapt the audit scope to each client’s particular case.
Architecture audit
Auditors inspect the blockchain architecture against the following requirements:
- Resilience — to ensure high availability of applications and networks and prompt incident recovery.
- Scalability — to protect blockchain networks from DDoS and similar attacks that overload network traffic.
- Interoperability — to ensure there are secure protocols and interfaces to enable safe communication between blockchain networks and between smart contracts written in different languages.
Network layer audit
Auditors review the blockchain network, looking for appropriate security measures such as:
- An adequate limit of P2P or remote connections to a single node — to protect the nodes from excessive traffic.
- A limit of nodes with a single IP address — to protect against Sybil attacks.
- Network identification such as ChainID in Ethereum — to prevent alien attacks on the blockchain P2P layer.
Ledger layer audit
Auditors verify consensus and transaction security by examining:
- The consensus algorithm — to ensure that a transaction is only completed after it’s confirmed by a sufficient number of blocks.
- The use of nonce — to prevent transaction replay.
- The cryptography library — to ensure it is resistant to malleability attacks.
Code audit
Auditors perform blockchain code review and inspect:
- Smart contracts — to verify security best practices for smart contract programming that help prevent arithmetic overflow, gas griefing, reentrancy attack, frontrunning attack, and other threats.
- dApps — to confirm the security of role-based access control mechanisms, cross-chain operations, sensitive data storage, and more.
- Encryption libraries and hashing methods — to protect against hash collision and length extension attacks.
- Cryptographic security — to ensure the random number generator is cryptographically strong and produces non-guessable numbers.
Global, region-, and industry-specific compliance audit
Auditors perform compliance assessment of the blockchain-based solution against:
- PCI DSS, KYC/AML, SEC, FINRA, GLBA, NYDFS — to secure financial and payment operations and data.
- HIPAA, HITECH — to establish security policies, procedures, and controls for PHI protection.
- CCPA, GDPR, SOC 2, ISO 27001/27002, and other applicable standards and regulations — to ensure sensitive data privacy.
Blockchain Security Audit Process
Drawing on 20+ years of experience in cybersecurity, ScienceSoft devised a general five-step process to evaluate the security of blockchain-based solutions. The audit plan can be adjusted to your organization’s needs and the target solution’s complexity.
1.
Planning and scoping
First off, we need to gather and analyze the organization’s security and compliance requirements to determine:
- The goals of the audit.
- Auditing scope (what security controls the audit will cover).
- Auditing targets (e.g., smart contracts, consensus mechanisms, wallets).
- Audit plan and team composition.
- Auditing methodology, techniques, and tools.
- Audit turnaround time and costs.
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2.
Preparation
Auditors gather relevant documentation about the blockchain auditing targets and their key components. The documentation may include smart contract specifications, architecture diagrams, security policies and procedures, and more.
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3.
Audit execution
The process begins with automated testing (e.g., SAST and DAST). After the auditors inspect the findings and research the blockchain architecture and environment, they manually review the audit targets and validate the detected security issues.
Based on the project scope and requirements, a blockchain audit may be complemented by security testing (e.g., pentesting and vulnerability assessment) to assess the effectiveness of the existing security measures.
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4.
Reporting
The auditing team reviews the results to prepare a comprehensive report. The report usually includes:
- Project summary (audit scope, audit methods, frameworks, etc.).
- Audit findings (security issues classified by their severity and the risks they present).
- Recommended actions to fix the identified vulnerabilities.
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5.
Remediation
Your organization carries out the remediation activities, either internally or by involving outsourced security experts:
- Improving or creating security policies.
- Fixing software and infrastructure misconfigurations.
- Introducing the needed security controls.
- Revising blockchain architecture.
- Refactoring smart contracts and application code.
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Blockchain Security: ScienceSoft's Selected Projects
Consider ScienceSoft’s Services
Security audit
Our specialists will perform a comprehensive analysis of your blockchain solution and related policies, identify absent or immature security controls, and provide a detailed remediation plan.
Security audit and remediation
Upon completing the audit, we are ready to implement our own remediation advice. Our experts can draw up necessary policies, set up security tools, fix misconfigurations, and refactor on-chain source code.
ScienceSoft: A Blockchain Security Auditor You Can Rely On
Hands-on experience
- Successfully carrying out cybersecurity projects since 2003.
- Building secure blockchain solutions since 2020.
A team of top experts
- Certified Ethical Hackers on board.
- Security engineers proficient in NIST, CIS, PTES, and OWASP methodologies and leading blockchain testing tools: Mythrill, Slither, MythX, Contract-Library, and more.
- Compliance consultants well-versed in global, region-, and domain-specific standards and regulations, including PCI DSS, SEC, GLBA, SOX, NYDFS, SAMA, SOC 2, GDPR, and HIPAA.
- Senior developers proficient in all major blockchain platforms, including Ethereum, Hyperledger Fabric, Graphene.
- Blockchain solution architects with 7–10 years of experience.
Typical Roles on ScienceSoft's Blockchain Security Audit Team
Project manager
Plans a blockchain security audit according to the agreed scope. Supervises the project and coordinates communication between the audit team and the client. Manages task allocation and execution.
Blockchain developer
Examines the source code of smart contracts and blockchain protocols for potential vulnerabilities. Verifies logic implementation, cryptographic functions, and key management.
Blockchain architect
Examines blockchain architecture from a security and resilience perspective. Reviews platform choices, integrations, and interactions between solution modules.
Compliance auditor
Identifies compliance gaps in the blockchain security controls or the company's policies and advises on how to remediate them.
Security engineer
Identifies security issues in Web3 apps and blockchain infrastructure. Verifies the implementation of a zero-trust model, the efficiency of the network segmentation, and secure app configurations.
Proven Techs & Tools We Use for Blockchain Security Audit
Costs and Cost Factors
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The cost of a blockchain security audit may range from $5,000 to $50,000. Among the factors that influence the cost are:
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Answering Common Questions
How often should a company perform blockchain security audits?
Blockchain security audits are most effective when conducted before the deployment in production. Introducing security patches to a smart contract or consensus algorithm after deployment is complicated due to their immutable nature.
Additionally, a security audit or a pentest is warranted whenever you introduce major changes to the blockchain environment. Security checkups help make sure that changes such as new sidechains, smart contracts, and external integrations will not introduce vulnerabilities to the blockchain.
What are the common security measures recommended as the result of a blockchain security audit?
Though each blockchain system is unique, certain security measures are frequently overlooked in this domain. In our audit reports, we often recommend implementing:
- A multi-signature (multisig) wallet instead of a single-signature (singlesig) one — to avoid the risk of asset loss. If the private key for a singlesig wallet is compromised or lost, the owner will lose all access to their funds. Multisig wallets require multiple signatures to authorize a transaction, removing the single point of failure.
- Strong block payload encryption — to mitigate the risks of man-in-the-middle, meet-in-the-middle, and similar attacks (when a hacker eavesdrops, intercepts, or modifies traffic).
- Key management, including robust cryptography, secure storage, and recovery methods — to reduce the risk of private keys being stolen or brute-forced as well as provide a method to regain access to assets if the keys get stolen or lost.
- Secure backups — to be able to restore private keys, crypto wallets, or a node’s entire state.
- Role-based access control — Setting multiple administrative accounts with access to predetermined sensitive functions (as opposed to a single contract’s “owner”) allows to reduce attack surface if the owner’s key is exposed, removing the single point-of-failure.
How do we reduce blockchain security audit costs?
- Prepare clear documentation. Properly documented source code, specifications, business requirements, and security policies prevent misunderstandings and unnecessary retests. This, in turn, ensures a smoother and more time- and cost-effective audit.
- Prioritize auditing targets. Identify which components of your blockchain solution are the most critical (e.g., based on the current development stage, compliance requirements, business value) and focus the audit on them.
- The auditing targets should remain unchanged before the audit is completed. For instance, ongoing development and code changes during a smart contract audit will result in additional checks and, therefore, higher costs.
About ScienceSoft
ScienceSoft is an international IT consulting and software development company headquartered in McKinney, TX. Since 2003, we help organizations across 30+ industries uphold a strong cybersecurity posture by providing a broad range of IT security services. If you are ready to take a proactive approach to blockchain security, reach out to ScienceSoft's team.