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The Data Scientist

Blockchain auditing

The qualities of blockchain explained and why regular audits are necessary

The way that big business operates continues to evolve thanks mostly to continual advances in digital technology. Previously a long process would see contracts being signed physically, and cash would be transferred through a bank. Many organizations prefer to go about things in a different way which might involve using cryptocurrency and blockchain as a way of operating.

There are several reasons for this move, with increased trust being at the top of the list. Those who use blockchain can have total faith in its process even if they do not know other parties that are involved, while still wanting occasional blockchain auditing being carried out. Being involved in a decentralized structure is appealing as it allows for the sharing of real-time data while any possible areas of weakness can be identified and reduced.

Because blockchain carries end-to-end encryption it provides the highest levels of security, which is an obvious attraction to any business that wants to ensure that they are not party to any criminal activity. Unauthorized activity and fraud can be made redundant while it also provides cost cutting which is always something to make any organization happy. This is through manual tasks, which are more likely to see errors, either accidentally or maliciously, occur while transactions are carried out at a far faster speed, which can be invaluable when time is of the essence when getting a deal over the line for the best value.

While blockchain is excellent in creating privacy and prevents third parties and intermediaries from getting involved, who can charge large fees and be privy to information that they can use to their advantage, a transaction is also visible and traceable. This ensures that counterfeit goods are far less likely to be passed on because they can be traced to their source, meaning that any issues are quickly identified with the perpetrators being dealt with accordingly. Perhaps the biggest attraction of using a blockchain is that transactions are unable to be deleted or amended, which is why they create so much trust and reliability. A data-driven business might also have other security measures in place.

Blockchain also allows smart contracts to be exchanged in which it may see certain data only being available for a set length of time and decide who can see it. Being given that control further enhances trust in the system which might be using cryptocurrency such as Bitcoin throughout a transaction. There is little wonder that so many big businesses and organizations are turning to blockchain technology as it solves problems, provides security, and saves time through its innovative way of operating. Yet, despite this, there is still the need to have audits carried out by a leading team.

It is wise to choose auditors who have expertise and vast experience in dealing with blockchain and understand the different platforms and technologies that are involved as well as how the security that has been put in place works. They should also have a proven track record in carrying out the same work for other companies which deliver trust and reliability thanks to the rigorous methodology that they employ. They might use penetrative testing techniques along with automated analysis and a manual code review to deliver the best results which provide the best service to their clients. Those clients are likely to have different requirements from other firms, so it is important to choose auditors who can provide a tailored service that includes everything that is asked for.

It is essential that audits are not only reliable but are timely and any issues are quickly identified and then dealt with through clear communication so that clients understand the language that is being used if they are not blockchain experts. Leading auditors will offer a range of different services to choose from, which often depends on what is being searched for and how often the blockchain is being used. This can include examining a codebase meticulously so that any vulnerabilities can be quickly identified along with potential security flaws, while also abiding by any legislative and regulatory actions when blockchain involves finance.

It makes sense that a leading auditor should prioritize potential vulnerabilities so that they can be dealt with when identified through their manual analysis and automated tools. A great way of ensuring that security and blockchain can withstand potential hacks is by creating a real-world situation and trying to carry out a malicious attack. This is what makes the best auditors stand out from their competitors. Choosing a collaborative approach can build an understanding and trust between the auditor and the development team of their client so that they can act upon feedback and recommendations so that they have a less vulnerable blockchain at their disposal.

Risk assessment is also valuable in the auditing process, which can provide the right solutions to have a more secure system in place. Being able to identify potential security issues before they occur will quickly gain an organization the best reputation among its peers and employees, which can result in increased trade as it will be seen as a business that takes such matters seriously. A thorough blockchain audit will also lead to far less downtime being incurred, which also leads to customer satisfaction when the utmost reliability can be provided by a seamless operation.

Any organization worth its salt continually ensures that they remain compliant to avoid the interest of the authorities which may look for breaches in regulatory and industry standards. That is why a regular audit is both invaluable and necessary to avoid any fines or penalties and ensure that its reputation remains intact. A thorough audit will take up to three weeks to complete, which can be assisted when the business compiles all the necessary information that will be required in readiness for the auditors to get to work.

Blockchain is becoming increasingly popular with many organizations, with a regular audit being able to identify any security issues along with ensuring the compliance and reliability of a blockchain project.