Web3 Security Risks and Issues 2023

Web3 is a relatively new and not entirely discovered type of network. The third generation of the net concept brought many interesting underlying technologies like smart contracts and blockchain technology to the table. But how safe are those things? Can web3 security facilitate using web 3.0 technologies without having any risks of losing data or money?

This article will fully uncover the topic of web3 security. We will talk about vulnerabilities in the net and how you can avoid security issues on the web 3.

What is web 3.0?

Web 3.0 is a third generation of the internet with decentralization as its main principle. We are in the hybrid state at the moment, where approximately 70 percent of the internet is web 2.0 technologies, and 30 percent is populated with web 3.0.

Web 3 platforms are taking power and control from significant internet authorities and transferring it to every user. Thus, it helps developers to facilitate an equal digital ecosystem. For example, no authority can change a code himself. Now, users have to conduct a vote and collaborate to make a change. But on the other hand, such an approach perpetuates questions of information quality, as it is harder to control.

Blockchain technology

Blockchain is a system developed to protect a web 3.0 market by providing a secure, effective, and fast transfer method.

All transactions create a certain block that has all the information, including how much funds were transferred, who the parties are, what the time is, and other details. Further, these blocks are interconnected into the chain.

The longer the chain, the less risk you have. It is because to steal data from a particular block, attackers will need to hack each previous one. Such a method is highly effective and dramatically distances cybercriminals from success.

Blockchain features distributed ledger technologies to facilitate clarity within transactions and get rid of many questions. It allows checking all the information about transactions within a chain for each participant of it.

An essential part of blockchain security is an immutability principle. Thus, all the records inside blocks can’t be changed or tampered with by users. If you wonder what to do if the error occurs, it is pretty simple. Automated protocol fixes a problem in a matter of seconds without outer help.

Smart contracts

A smart contract is an essential part of the blockchain that facilitates fast and automated transfers of crypto assets. Smart contracts are little programmed codes placed inside a blockchain. They work just as actual contracts, being a middleman between two parties.

A smart contract can be programmed in different ways. Thus, during development, a programmer can set a condition when a smart contract needs to be executed. As soon as a condition is met, a smart contract will quickly start its process.

Smart contracts exclude a third-party element from the transactions within a web3. For instance, you are automatically more secure, as third parties can draw some risk. In addition, smart contracts are greatly encrypted, so they are hard to attack hackers.

But regardless of all these security advantages, smart contracts became targets of numerous attacks, leading to loss of money. Such practices were extremely widespread in 2021 when cybercriminals managed to steal crypto-assets for millions of dollars.

How to counter security issues and risks

Security professionals and web3 developers are working every day to provide new methods to protect you in the web 3.0 environment. With the assistance of the following practices, you will be able to mitigate many vulnerabilities and significantly reduce risks.

Blockchain/smart contract audit

Blockchain/smart contract audit services are highly effective methods to prevent common errors and eliminate almost any vulnerability. An audit is a complex process completed by the security teams. Professionals will dive into your project and its security by analyzing a code. To fully understand the flaws of your project, security companies go through the following steps:

1. Review your documentation and architecture of the projects to understand better how it functions.
2. Take a few steps to review your code. Most of the services will review preliminary code and static code separately to reach the best results.
3. Review of the code’s quality. It is crucial to write good code in the development stage. Otherwise, it can result in significant losses in many cases.

At the end of the process, security professionals will form a special report. A report has important information about your projects, how well their code is written, and is there any vulnerability in your code.

Track the market and dynamics

There are countless examples where fraudsters deceive users so they take part in a fake deal. Unfortunately, fraudsters receive such an ability due to a lack of knowledge among users.

If you take part in deals and crypto trades, it is recommended to track different web 3.0 projects, their tokens’ prices, and the market conditions. This will help you to reduce risks and secure your wallets.

There are also many sophisticated regulations of crypto technologies. If you are in the development team or just a user, it would be helpful if you found a legal recourse with current jurisdictions. It is essential to know, as there are so many things when it comes to security beyond the technologies.

Use a blockchain with lower accessibility

It is essential to mention that web3 features different types of blockchain platforms. Such examples as Ethereum or Solana are open networks that attackers can easily access. Another issue when it comes to public blockchains is that users don’t need to prove their identity. Thus, attackers can avoid risks with the help of anonymity.

On the other hand, you can use private blockchains where users need to provide their identity information or even a membership. Such blockchain networks will make sure that you are in reliable and trusted communities, as a criminal wouldn’t prefer to share their identity.

But before jumping into a private blockchain, make sure to learn it as there are many significant differences.

Assess vulnerabilities of your decentralized applications

Vulnerability assessment is a highly effective tool, helping developers to make sure their DApp has high security and low risks. It provides an automatic test made to identify vulnerabilities and remediate them further.

Such a proactive approach is key to your DApps security. It will exclude numerous attack vectors and save your data from risks. Assessing vulnerabilities is very important as there are so many flaws in the apps that criminals can exploit to get control over users’ wallets and data access.

And the same as in code audit, you will get a full report on your DApp security. You will be informed about vulnerabilities that criminals can exploit and the risks it entails. The report will also recommend a remediation method for developers to use, for example, updating a particular protocol.

Conclusion

As so many entities are making plans to attack your network, it is very important to set a high web3 security. Approach your network thoughtfully, and start implementing security methods as soon as you begin to develop a web 3.0 program/code. It is up to the due diligence of the engineering team to make sure that the code is appropriately protected. And don’t forget to use other tools we mentioned to secure your data and funds.

Frequently asked questions