Blockchain Penetration Testing – Definition & For What?

Blockchain Penetration Testing

Gradually, blockchain adoption is expanding across modern industries in different uses and deployments. Blockchain technology was introduced in 1991. Yet, the initial discovery of a digital ledger was limited to commercial transactions. Still, in 2014, it underwent the latest advances in other financial, medical, and inter-organizational transaction spheres where new opportunities were explored. Technology is undoubtedly the key element in the development of blockchain-focused healthcare solutions.

In this full guide, we will explore how the Blockchain ecosystem works, and how to secure it from malicious attacks with the most secure coding practices, effective security testing, along with Blockchain penetration testing. 

Top 10 Pentest Blockchain Service Providers

Let’s examine blockchain pentest companies that provide pen testing services for target organizations. 

  1. ScienceSoft
  2. BreachLock Inc
  3. Raxis
  4. ImmuniWeb®
  5. Acunetix
  6. CyberHunter
  7. Netsparker
  8. Intruder
  9. QAlified
  10. AstraCipher

The blockchain performance testing services these companies provide include a manual review of the blockchain ledger network, security controls, company process, technological features, data transmission, access controls, and blockchain application tests.

What are Blockchain and its types?

Blockchain is a progressive technology that allows companies and users to store and process data with the help of structured distributed databases in a digital ledger network. Each new block, by default, stores a transaction or a package of them. These transactions are connected to all the earlier available blocks in a cryptographic chain form. 

Three key types of ledgers exclude DLT traditional and databases. Here they are:

1. Private Blockchains

All digital transactions conducted on private blockchains are confidential and accessible to the system’s members who have permission to join the private blockchain network. For example, let’s say, Hyperledger and R3 Corda are private networks.

2. Public Blockchains

All transactions that occur on public digital ledgers are completely transparent. This means that anybody can examine the transaction’s subtleties. For example, BTC and Ethereum are public blockchains.

 3. Consortium Blockchains

These are similar to private ones. The main distinction between them is that consortium ledgers are not governed by a single entity but by a group. Participants in this type of blockchain can incorporate anyone to supply chains, no matter from national banks or governments.

How does blockchain technology work?

Blockchain functions as distributed network facilitating the decentralization of data. That makes it more secure and harder to tamper with technology. Using a public ledger network, companies can connect to it using network nodes to store and process data. A third party wants access to them by verifying the data, and a second party easily verifies the data stored in a block.

A decentralized public ledger network lets organizations link to it via nodes for processing and data storage. The information stored in blocks can be easily accessed with verification, validation, plus consensus by the original entity aiming to process or store the data. Here is when building secure blockchain solutions and performing tests like API testing and blockchain penetrate testing are required.

When a participant using a blockchain-driven application asks for a transaction, a respective block is generated in the network to store the transaction’s records. Then the resultant block is sent to every node in the distributed peer-to-peer ledger, further validating the transaction. Once the validation phase is over, nodes obtain a reward for the proof of work (PoW), or distributed consensus – an agreement between the nodes. Then, the previous block is added to the blockchain, and the user completes a successful transaction.

Here are the reasons why the blockchain has become so:

  • Blockchain stores the records cryptographically.
  • Data tampering in the digital ledger is impossible.
  • The ledger is transparent and untraceable.
  • It is decentralized.

Data Transmission Blockchain includes a peer-to-peer architecture, which makes it imperative for security professionals to verify the encryption and decryption of data and make it faultless.

What is Blockchain Security?

Blockchain security is a far-reaching risk assessment process for a digital ledger network or solution to guarantee security. The ledger security is attained via the execution of security testing methodologies, cybersecurity frameworks, blockchain solutions, and dynamic application testing. All these are implemented to keep blockchain works protected from online breaches, unauthorized network access, and other malicious programs.

Recent cyberattacks on Blockchain solutions

Many recent incidents of unauthorized or fraudulent use of blockchain technology make it unimpaired against cyber-criminality. These are examples of the latest cyber-attacks on the blockchain:

  • BTC worth as much as $72 million was taken from one of the major crypto exchanges called Bitfinex because of stolen keys.
  • One more exchange Bithumb was recently hacked, and the data of 30 thousand users were compromised. Consequently, a suspected insider job stole $870K worth of BTC.
  • A VC firm called DAO became a target of a code exploitation attack where it lost over $60 million in assets of Ether.

What is blockchain penetration testing?

Largely, Blockchain penetration testing is a security-focused assessment process performed by security specialists or ethical hackers to test the security level of the blockchain-driven solution or blockchain application. 

Penetration tests operate in a manner to exploit the code errors of potential hackers efficiently. Briefly, testers act as hackers and attempt to penetrate network security to detect security holes in the system. The overall time needed for the penetration testing system varies with network dimensions along with complex architecture. Smaller tests are only minutes, whereas long tests can last several months. A common challenge requiring blockchain testing is using a secure infrastructure.

The main goal of penetration testing is to find weaknesses and safety loopholes and spot misconfiguration errors in the blockchain solution. By performing such a security assessment process, organizations obtain feedback and insights on the overall safety posture of their digital ledger. Besides that allows them to fix the potential vulnerabilities for their blockchain-focused solutions or apps following the performance testing.

Tell me the best way to conduct a penetration test?

The blockchain pen test is done in 3 steps:

Step 1: Information Gathering + Threat Modeling

In this step, you can comprehend and analyze functionality and business requirements. 

This stage covers detecting security weaknesses:

  • Getting an idea of Blockchain architecture
  • Spotting threat entry points inside the organization
  • Collecting publicly accessible data on future exploits
  • Evaluating Logic of Smart Contract Business
  • Setting aims for conducting safety testing
  • Full test of strategy designing
  • Arranging the testing environment
  • Compliance readiness assessment
  • Generation of test records

Step2: Discovery/Testing

Next, you may now use the previously acquired data to develop and conduct the active testing of your digital ledger to decide its development level measured against standard industry guidelines.

This step includes the testing process:

  • Functional Testing
  • API Testing
  • Manual & Automatic Security-based Analysis
  • Static and Dynamic Testing of Blockchain
  • Network Vulnerability Assessment
  • Blockchain Integrity Test 
  • Application Vulnerability Testing       
  • Reporting Testing Detections

Step 3: Exploitation

At last, here, the objective is to use any vulnerabilities found in the second stage. This is frequently performed manually to dispose of false positives. This stage also includes the exfiltration of records from the target and looking after perseverance.

This step covers:

  • Security Weaknesses Verification
  • Security Vulnerabilities Exploitation
  • Penetration Assessment of Web App
  • Network Penetration testing
  • Test for Social Engineering Attacks
  • Review plus Document Discoveries

What are the Blockchain Security Testing Tools?

If you are interested in proficient security testing of networks and blockchain applications, see our blockchain testing tools list:

  • SmartCheck: It is a static security analyzer of smart contracts.
  • Manticore – This one is a symbolic execution tool for binaries analysis and smart contracts.
  • Solgraph – The tool generates a DOT graph that highlights potential risks.
  • Echidna is a Haskell program for property-based tests/ fuzzing the Ethereum network.
  • ERC20 Awesome Buggy Tokens – It is a collection of weaknesses in ERC20 smart contracts with tokens under effect.
  • Solidity security blog covers a broad list of crypto-related hacks, bugs, and preventive measures.
  • Securify 2.0: It is a security-focused scanner for Ether smart contracts.
  • MythX – This is an API testing tool that supports Tron, Vechain, Ethereum, and other EVM-compatible ledgers.
  • SWC-registry: It is a classification of smart contract vulnerabilities with test cases.
  • Oyente: This is a static analysis system for smart contract security.

Recap

In conclusion, Blockchain offers a variety of measures for the network solutions built on it. Nonetheless, the lack of governance and deployable weaknesses makes it not immune to potential threats. Hence, conducting a  security audit or Blockchain penetration testing becomes crucial for your business. Furthermore, the earlier you identify digital ledger security loopholes, the faster you fix them, thus protecting your blockchain solutions from attackers.

FAQ:

What is blockchain pen testing?

It is an active pen-testing process completed by a penetration tester to check the security of blockchain-based applications and spot security loopholes.

What are the stages of Blockchain penetration testing?

The stages while performing blockchain penetration testing cover: Vulnerabilities detection, Evaluation stage, Functional testing, Feedback on the entire blockchain, Remediation and Certification.

How to Perform Blockchain Security Penetration Testing?

Phases of penetration procedure include pre-engagement, engagement, and eventually, post-engagement.