Blockchain Application Security

How to Design Secure and Attack Resilient Blockchain Applications
1. Auflage 2025
ISBN: 978-1-119-55103-4
Verlag: Wiley

Buch, Englisch, 636 Seiten, Gewicht: 666 g

Learn to secure, design, implement, and test tomorrow's blockchain applications.

Blockchain Application Security guides readers through the architecture and components of blockchain, including protocols such as Bitcoin and beyond, by offering a technical yet accessible introduction.This resource is ideal for application architects, software developers, security auditors, and vulnerability testers working on enterprise blockchain solutions. It bridges the gap between theory and implementation, providing actionable guidance on protecting decentralized systems while capitalizing on their innovative benefits.

Blockchain Application Security covers the essentials, from the fundamentals of distributed ledgers, consensus algorithms, digital wallets, smart contracts, privacy controls, and DIDs, to designing secure dApp architectures with component-level threat analysis and resilient APIs, token transactions, digital exchanges, and identity models. It features a complete lifecycle example for securing a DeFi lending and borrowing platform, along with practical walkthroughs for smart contract development, AWS-integrated blockchain systems, frontend/API integration, and code auditing.

“An accessible, comprehensive blockchain overview that emphasizes its value across industrial and government sectors with a holistic security focus.” David W. Kravitz, Technical Advisor, Spring Labs

“A cutting-edge method for securing blockchain applications, pushing the boundaries of current practice.” David Cervigni, Senior Security Research Engineer at R3

“Bridging theory and practice with realistic examples, this guide empowers architects and developers to build attack-resistant applications.” Steven Wierckx, Product Security Team Lead & Threatmodel Trainer at Toreon

“A valuable resource for blockchain specialists, featuring hands-on examples of deploying dApps on AWS and securing infrastructure.” Ihor Sasovets, Lead Security Engineer, Penetration Tester at TechMagic

“A practical roadmap for navigating blockchain security that we recommend to clients and incorporate into our training.” Vijay Dhanasekaran, Founder & Chief Blockchain Officer, Consultant at Blocknetics

“An indispensable resource for dApp developers, guiding readers from fundamentals to advanced implementation with in-depth vulnerability analysis.” Mohd Mehdi, Head of DevOps, DevSecOps and Infrastructure at InfStones

Autoren/Hrsg.

Morana, Marco

Singh, Harpreet

Fachgebiete

• Technische Wissenschaften Elektronik | Nachrichtentechnik Nachrichten- und Kommunikationstechnik
• Mathematik | Informatik EDV | Informatik Computerkommunikation & -vernetzung Netzwerksicherheit
• Mathematik | Informatik EDV | Informatik Technische Informatik Computersicherheit
• Technische Wissenschaften Technik Allgemein Technische Zuverlässigkeit, Sicherheitstechnik

Inhaltsverzeichnis

Table of Contents

Blockchain Application Security: How to Design Secure and Attack Resilient Blockchain Applications 0

Table of Contents 1

Introduction 8

Chapter I - The Blockchain Technology Primer 22

1.1 Introduction 22

1.2 Brief History of The Blockchain and Its Evolution 22

1.3 Distributed Ledger Technology (DLT) and The Blockchain 23

1.4 Blockchain Networks 27

1.4.1 Nodes 31

1.4.2 Scalability Components 32

1.4.3 Interoperability Components 35

1.4.4 Platforms 37

1.4.5 Decentralized Applications 40

1.4.6 Practical Examples 40

1.5. The Blockchain Data Structure 43

1.5.1 Hash Functions 44

1.5.2 Digital Signatures 47

1.5.3 Block Structure 52

1.5.4 Merkle Trees & Use Cases 55

1.5.5 Fundamental Blockchain Elements 56

1.5.6 Blockchain Inherent Technology Security Risks 59

1.6 Consensus Algorithms 67

1.6.1 Different types of consensus algorithms 67

1.6.2. Deterministic vs Non Deterministic Consensus Algorithms 74

1.7 CryptoCurrencies 75

1.7.1 Cryptocurrencies Use Cases 77

1.7.2 Use of Cryptocurrencies and Security Risks 78

1.8 Digital Wallets 79

1.8.1 Introduction 79

1.8.2 Security Features of Digital Wallets 84

1.9 Digital Transactions 86

1.9.1 Transaction Automation With Smart Contracts 91

1.9.2 Token Transactions 94

1.10 Privacy Controls 96

1.10.1 Anonymity vs. Pseudonymity of Blockchain Transactions 98

1.10.2 Techniques for Enhancing Transaction Privacy 99

1.11 Identity Controls 101

1.11.1 Identity Verification Methods 102

1.11.2 Privacy-Preserving Identities 104

1.11.3 Identity & Access Management 106

1.11.4 Decentralized Identities (DID) 108

1.12 Legal and Regulatory Considerations 109

1.13 Conclusions 117

1.14 Future directions and trends in blockchain technology 119

Chapter II - Designing Secure Decentralized Applications (DApps) 121

2.1 Introduction 121

2.2 Decentralized Applications (DApps) 127

2.2.1 Decentralized Application Architectures 130

2.2.2 Comparison of DApps with traditional centralized applications 137

2.2.3 Analysis of use cases for blockchain and decentralized applications 139

2.3 Identification of security requirements for dApps 143

2.3.1 Elicitation of Security Requirements 143

2.3.2 Example of dApps Security Requirements 146

2.4 Securing Decentralized Applications (DApps) 149

2.4.1 Principles of Secure Blockchain Platform Design 150

2.4.1.1 Overview of Security Architecture Principles 151

2.4.1.2 Security Architecture Principles for DApps Design 151

2.4.2 Securing DApps By Design 157

2.4.2.1 Identifying DApps Security Design Flaws & Vulnerabilities 159

2.4.2.2 Securing DApps Components by Design & Implementation 165

2.4.3 Blockchain APIs 177

2.4.3.1 Securing Blockchain APIs 177

2.4.3.2 BlockChain API Vulnerabilities 180

2.4.3.3 Security Review of Blockchain API 183

2.4.4 Securing DApps Confidential Data & Transactions 185

2.4.4.1 Security Requirements For The Protection of Confidential Data 188

2.4.4.2 Vulnerabilities Exposing Confidential and Transactions Data in dApps 191

2.4.4.3 Security Reviews To Identify Design Flaws and Vulnerabilities in dApps 192

2.4.5 Consensus Algorithms 194

2.4.5.1 Identification of potential security design vulnerabilities related to consensus algorithms 195

2.4.5.2 Best practices for selecting and implementing secure consensus algorithms 198

2.4.6 Protecting Secrets 200

2.4.6.1 Practical examples of security by design protection of secrets and keys in dApps 201

2.4.6.2 Identification of potential vulnerabilities related to secret and key management with Dapps 203

2.4.7 Securing Token-Based Transactions 204

2.4.7.1 Explanation of Token-Based Transactions 205

2.4.7.2 Secure Token standards 207

2.4.7.3 Security Considerations for Securing dApps with Token-Based Use Cases 209

2.4.8 Securing Cryptocurrency Decentralized Exchanges (DEXes) Transactions 212

2.4.8.1 Securing DApp integration with Digital Exchanges 213

2.4.8.2.Mitigating the risks of DEX Use Cases 217

2.4.9 Securing Digital Identities 223

2.4.9.1 Explanation of Digital Identities 224

2.4.9.2 Security Considerations for Digital Identities 226

2.4.10 Securing Smart Contracts 229

2.4.10.1 Overview of Smart Contracts and Security Considerations 229

2.4.10.2. Common Smart Contract Vulnerabilities and Associated Risks 231

2.4.10.3 Best Practices for Smart Contracts Security 234

2.5 Conclusions for This Chapter 243

2.5.1 Future directions and trends in secure blockchain application design, development, testing and audit for compliance. 245

Chapter III - Securing Blockchain Applications: Identifying and Mitigating the Vulnerability Risks 246

3.1 Introduction 246

3.1.1 Focused DApp Application Security 247

3.1.2 DApp Vulnerabilities Risks 248

3.1.3 Lesson Learned from Security Incidents 249

3.1.3.1 Smart Contract Vulnerability Exploits: A Real Concern 250

3.1.3.2 Digital Wallet Design Flaws Exploits 252

3.1.3.3 LL-1: Conduct Security Audits Of Smart Contracts 254

3.1.3.4 LL-2: Require Responsible Disclosure of Vulnerabilities 255

3.1.3.5 LL-3: Comply With Regulatory Requirements 255

3.1.3.6 LL-4: Address Scalability and Network Congestion Issues 256

3.1.3.7 LL-5: Strengthen Incident Response Process 257

3.2 Enhancing Blockchain Security: Preventing and Remedying Vulnerabilities and Design Flaws 259

3.2.1 Introduction to Threat Modeling 260

3.2.2 PASTA Threat Modeling 263

3.2.2.1 Definition of Business Objectives (DBO) 263

3.2.2.2 Definition of the Technical Scope (DTS) 265

3.2.2.3 Application Decomposition and Analysis (ADA) 266

3.2.2.4 Threat Analysis (TA) 268

3.2.2.5 Vulnerability Analysis (VA) 270

3.2.2.6 Attack Modeling (AM) 272

3.2.2.7 Risk Assessment & Mitigation (RAM) 274

3.2.3 Threat Modeling Example: DeFi Lending & Borrowing DApp 279

3.2.3.1 Stage I - Definition of Business Objectives (DBO) 282

3.2.3.2 Stage II - Definition of Technical Scope (DTS) 294

3.2.3.3 Stage III - Application Decomposition & Analysis (ADA) 300

3.2.3.4 Stage IV - Threat Analysis (TA) 313

3.2.3.5 Stage V - Vulnerability Analysis (VA) 330

3.2.3.6 Stage VI - Attack Modeling (AM) 339

3.2.3.7 Stage VII - Risk Analysis and Management (RAM) 355

3.2.4 SecDevOps Tools 373

3.3 Auditing Blockchain Applications for Compliance 380

3.4 Conclusions 385

Chapter IV - Securing Blockchain Applications: Practical Examples 387

4.1 Introduction 387

4.2 DApp Creation Example 388

4.2.1 Architecture 388

4.2.1 Project Components 389

4.2.1.1 Token.sol (ERC-20 Token Contract) 389

4.2.1.2 Smart Contract Deployment 389

4.2.2 AWS Integration 389

4.2.2.1 API Gateway Setup 390

4.2.2.2 Create a New API in Amazon API Gateway 390

4.2.2.3 Link the API to AWS Lambda Function 390

4.2.2.4 Define API Methods 391

4.2.2.5 Additional Configuration 392

4.2.3 Create A Frontend 393

4.2.3.1 Create React App 393

4.2.3.2 Create Frontend Code 393

4.2.4 Security Review 394

1. Smart Contract Vulnerabilities 394

2. AWS Lambda Security 394

3. API Gateway Misconfigurations 395

4. Data Storage Risks 395

5. Blockchain Event Handling 395

6. Cross-Origin Resource Sharing (CORS) 395

7. Frontend Integration Risks 395

4.2.5 Conclusion 396

4.3 Code Auditing Examples 397

4.3.1 Introduction 397

4.3.2 Rationale for Secure Coding Practices 397

4.3.3 Auditing Smart Contract Code 398

4.3.3.1 Common Smart Contract Vulnerabilities: Reentrancy 398

4.3.3.2 Integer Overflows and Underflows 400

4.3.2.3 Denial of Service (DoS) in Contracts 400

4.3.2.4 Access Control Failures 401

4.3.2.5 Logic Flaws and Business Logic Errors 402

4.3.4 Audit Processes and Tools for Smart Contracts 403

4.3.4.1 Manual Code Review 403

4.3.4.2 Automated Static Analysis Tools 403

4.2.4.3 Unit and Integration Testing 404

4.3.5 Best Practices in Smart Contract Audits 405

4.3.5.1 Security-by-Design 405

4.3.5.2 Remediation and Secure Re-Deployment 405

4.3.6 Auditing Blockchain Node Software 406

4.3.6.1 Types of Blockchain Nodes 406

4.3.6.2 Typical Vulnerabilities in Node Implementations 406

4.3.6.2.1 Consensus Algorithm Weaknesses 406

4.3.6.2.2 Networking Stack and P2P Protocol Issues 407

4.3.6.2.3 Resource Exhaustion Attacks 408

4.3.6.2.4 Configuration and Key Management Errors 409

4.3.6.3 Approaches to Node Software Auditing 410

4.3.6.3.1 Source Code Review 410

4.3.6.3.2 Penetration Testing 411

4.3.6.3.3 Continuous Integration/Continuous Deployment (CI/CD) Checks 411

4.3.7 Auditing Wallet Software 412

4.3.7.1 Types of Wallets 412

4.3.7.2 Wallet-Specific Vulnerabilities 414

4.3.7.2.1 Private Key Exposure 414

4.3.7.2.2 User Interface Manipulation (Phishing or Spoofing) 414

4.3.7.2.3 Transaction Handling Errors 415

4.3.7.2.4 Third-Party Library Issues 415

4.3.7.3 Wallet Security Audits and Testing 415

4.3.7.3.1 Code Review for Cryptographic Routines 415

4.3.7.3.2 UI/UX Security Testing 416

4.3.7.3.3 Secure Build and Deployment 416

4.3.7.3.4 Compliance with Regulatory or Industry Standards 416

4.3.8 Auditing Decentralized Applications (dApps) 417

4.3.8.1 dApp Architecture Components 417

4.3.8.2 Common dApp Vulnerabilities 418

4.3.8.2.1 Front-End Vulnerabilities 418

4.3.8.2.2 Smart Contract Integration Flaws 418

4.3.8.2.3 Data Privacy and Confidentiality Gaps 419

4.3.8.3 dApp Auditing and Testing 419

4.3.8.3.1 End-to-End Testing 419

4.3.8.3.2 Penetration Testing and Ethical Hacking 420

4.3.8.3.3. Security Scans in CI/CD 420

4.3.9 Consolidating Findings and Reporting 421

4.3.9.1 Security Reporting Framework 421

4.3.9.2 Coordination With Development Teams 421

4.3.9.3 Disclosure Best Practices 422

4.3.10 Conclusion 422

Appendix A - Threat Scenario & Threat Event Enumeration Analysis 424

Appendix B - Threat Scenarios To Weakness/Vulnerabilities Mapping Analysis 446

Appendix C - Threat to Attack Scenarios Mappings 453

Appendix D - Threat Scenarios Attack Simulation Tests 455

Appendix E - Threat Risk Ratings 458

Appendix F - Risks Mitigation Plan 460

Appendix G - Threats Risk Register Example 462

Appendix H - Compliance and Audit Readiness Report 463

Appendix I - Attack Simulation Testing Results 465

Appendix L - Stakeholder Risk Communication Report 466

References 469

Acknowledgments 483

About the Authors 484

Book Index 487

Über Autor(innen)

Marco Morana, PhD, works as SVP at a large financial institution in London, where he's responsible for the architecture risk analysis program. In his distinguished 15+ year career in application security, Morana held roles in different companies as security consultant, application security architect, professional trainer and program manager. As cybersecurity technologist, Morana's most important contribution to cybersecurity is the invention of the first secure email plug-in using the S/MIME protocol that was patented for NASA in 1996.