In a world that is increasingly embracing automation, smart contracts are a logical step forward. These are digital agreements that execute exactly as their code dictates, which means that unlike traditional contracts, there are no delays, no middlemen, and nothing open to interpretation. Trusting the other parties no longer forms the foundation of transactions, but you do need to trust the smart contract’s code, and that’s where auditors come in. Here’s the rundown on what they do and why.
What Happens in an Audit?
Smart contracts are only as smart as their code allows them to be. However, in order to become widely adopted, they need to be accessible for people who are not able to read that code. This is enabled through a process known as a Solidity audit, which is when an expert will thoroughly examine the smart contract to ensure it will execute exactly as the parties to the contract expect it to.
It is similar to having a lawyer look over a business contract, but it is not as simple as just having someone sit there and read the code line by line. Auditors may do things like simulate bad actors trying to attack the smart contract by, say, directing payments to their account instead of the correct one. The outcome of an audit is a report with details of any vulnerabilities that were found, and the auditor’s recommendations to fix them.
Can’t I Trust the Developers?
No doubt, there are some extremely skilled developers out there, but the fact remains that they are people and they are fallible. When they are writing hundreds and thousands of lines of code, there is a good chance that bugs will creep in. In many applications, like creating video games, a quick update can fix these. However, that’s not the case for smart contracts. They are engineered to not be changed after they are deployed.
As we mentioned earlier, checking the developer’s code is not all that auditing these contracts involves. Even if they are set up to execute precisely as the parties wish, they may also be vulnerable to hackers. These can be relentless and will be on the lookout for any errors they can use to their advantage, no matter how small or insignificant they may seem to the developers.
How Else Do Audits Help?
Smart contracts exist in the realm of blockchain technology, which also includes technologies like cryptocurrencies. The anonymity this technology provides has made it hard for cryptocurrencies to become widely used, because you often do not know who is on the other side of your transactions. Audits help bolster your credibility and trustworthiness, even if you are anonymous. This creates a healthier and more active online marketplace, potentially making it time for crypto to shine.
Conclusion
Cryptocurrency scams are a big risk when transacting on the blockchain, and smart contracts can be great tools for mitigating it. However, they bring their own risks because of bugs and the potential for cyberattacks. Getting a professional audit can help protect you from these, as well as build trust and credibility for your brand.
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