Skip to main content

blog

Security Issues in Smart Contracts and How to Solve Them

| Author: Tim Janssen

Blockchain is often promoted as a distributed and immutable database, and it is generally viewed as very secure. While blockchain protocols may indeed be secure, one only needs to perform a quick search online to find a staggering amount of articles about hacks, scams and stolen cryptocurrencies. Many of these intrusions have to do with hacked exchanges that store user keys. By stealing the keys from the database of these exchanges, the hacker can steal users’ cryptocurrencies, which is why service providers generally recommend storing your own keys. 

Similarly, cryptocurrencies are stolen by hackers using phishing attacks on Telegram, Slack, and Reddit. In all of these cases, the issue does not lie on blockchain security flaws, but rather on poor key management by part of the user. So, are there common security issues in applications built on top of the blockchain protocol? As you can imagine there are. In this blog, we will focus primarily on smart contracts built on public blockchains like Ethereum. We will cover the hack that resulted in the DAO collapse of 2016 - which was recently exploited in a somewhat more sophisticated way. We will use some code in this blog, so you’ll need a basic, technical understanding of blockchain.

Want to read the entire blog? Click on the ''read more'' button.