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A smart contract is an essential component of blockchain as it makes it possible to establish trust between the users. It’s some sort of guarantee that the transaction won’t be bounced, enabling the users to transfer their assets securely.
While blockchain has a bulletproof network, smart contracts still need a lot of work. They might include inattentive mistakes that can undermine the whole contract. Consequently, smart contract audit becomes a necessary measure.
The definition of a smart contract
In the simplest terms, smart contract is a set of principles written in code. It operates on blockchain and doesn’t necessarily exist without it. It has the ability to execute itself when certain conditions are met. This also means that it can automate transactions and regulate agreements without third-party involvement.
More precisely, smart contracts are rules that all users of the specific blockchain agree to. For example, if you want to buy Ethereum or other cryptocurrencies, you essentially agree to the smart contracts built into them. By doing so, you can stay assured that your transaction will be successful and you won’t lose funds.
Unlike traditional agreements, smart contracts can only oversee simple principles. They aren’t capable of regulating sophisticated legal matters, at least for now. They have a straightforward structure: if an ‘X’ happens, then ‘Y’ should happen too. With such a basic outline, smart contracts can allow the approval of transaction in less than seconds.
Even though current smart contracts are quite rudimentary, they have a great potential for the future. They might eventually substitute legal agreements that don’t require a set of different conditions. However, such development would need advanced coding to combine multiple principles at the same time.
What is a smart contract audit?
Smart contract audit is the process of reviewing the code behind the contract. Since smart contracts determine whether transactions will be successful or not, they carry a huge responsibility. Mistakes in the code, bugs, or errors could cause the contract to fail, resulting in the loss of funds.
Considering the fact that transactions on blockchain are immutable, the necessity of fortified smart contract code is quite obvious. To make sure such events don’t take place, companies usually use smart contract audit services as a step in the development process. They approach professional blockchain developers who examine the code carefully. During the process, they will find issues that undermine security of the smart contracts and propose the solutions.
Smart contract audit is usually done either manually or automatically. Leading companies will prioritize manual testing of the code, as it eliminates the chances of missing significant vulnerabilities. However, automatic testing could yield satisfactory results in a time-efficient manner.
Why is it necessary to conduct a smart contract audit?
A smart contract audit is necessary as it eliminates security issues, prevents digital attacks, optimizes the code, and improves the performance.
Eliminates security issues
A detailed code examination is the key to finding even the minor bugs that could easily turn into important security issues. It requires skilled programmers who can detect the errors and propose solutions.
Prevents digital attacks
Smart contract audit will also prevent it from digital attacks. If the code is fortified enough, it won’t be vulnerable to hacks. Even if the digital attacks occur, it will be able to withstand them.
Makes it possible to optimize the code
Another reason why it’s necessary to conduct a smart contract audit is code optimization. By tweaking the code to perfection, it’s possible to improve execution, facilitate faster operation, and reduce the required resources.
Improves the performance of the smart contracts
Finally, smart contract audit is essential as it improves the performance. Generally, while conducting the code review, the responsible team will examine every line. Along with security bugs, they will also locate functionality problems. By fixing those bugs, smart contract will operate better.
Conclusion
Smart contract is a digital agreement that has terms written into its code. To ensure the security of blockchain technology, it’s crucial to conduct smart contract audit before it ends up in the blocks of multiple computers. Due to the immutable character of the transactions, it will be impossible to correct mistakes after the launch. Therefore, it’s necessary to review the code in the beginning and prevent future problems.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.