An Online Training Program
October 4, 2020
Presenter: Chimezie Chuta, Lead Dev Blockchain Nigeria User Group
A Distributed Digital Record of Transactions, Secure, Immutable, Append-only, Decentralized, Time-stamped, Hashed and Transparent.
WHAT'S A HASH FUNCTION?
In the abstract, a hash function is a mathematical process that takes input data of any size, performs an operation on it, and returns output data of a fixed size.
An Address, A Public Key, A Private Key (a hash of the address data.)
When there is an advantage to having a public immutable record of something, blockchain is the answer. When there is no benefit, it doesn’t make much sense to use a blockchain. When this is the case, stand‐alone cryptography is the solution to the problem.
Supply Chain Management
Fundraising (Security token offerings)
Intellectual Property (IP)
Blockchain Solves the double-spend problem!
I send you an asset and wholly relinquish its ownership!
It represents that I own an underlying tradable asset.
NOTE: A Token is a Smart Contract!
A token can act as a store of value.
A token can be bought, sold, or traded for profit
Tokenizing assets that are either very illiquid, like real estate, or that can be difficult to physically exchange, like gold, is an interesting concept for investors.
Very expensive assets such as Airplanes, Land or even Intellectual property can be tokenized and sold in fractions.
These transactions also require auditing!
Transaction Validation & Verification
Planning and Advising
Direct Access to Transaction history!
Real-Time Transaction validation by a pool of Miners & Node Operators
Record Verification and maintenance by all users.
Built-in Compliance with most recent standards, regulations, and laws.
Instant presentation of the underlying regulation to an operator.
Immediate detection of violations.
Automating transaction reconciliation
Reduction of time spent on reconciliation and settlement.
Near real-time financial reporting.
Error and tamper-proof reports.
Less prone to fraud.
Auditors have complete and accurate records to quickly spot problems, prioritize plans, and find long-term patterns for modeling and prediction purposes.
Offering reliable and timely information stored on the blockchain to perform analytics.
Predicting the consequences of actions.
Facilitating Smart contracts by embedded analytical models, in other to identify trends.
Blockchain technology brings tangible challenges to the audit industry and calls for strategic transformation in this area.
To prepare for the changes brought by this disruptive technology, auditing professionals need to adjust and elevate themselves to the role of strategic partners.
Audit firms could reach this goal by adjusting their hiring and training strategies.
Auditors should be able to assess the costs and benefits of adopting specific blockchains and provide advice on blockchain implementation for their clients.
Audit firms should shift their focus to assess the effectiveness of risk management and advise on solutions and assurance for internal control.
Blockchain applications make it feasible to conduct continuous auditing due to real-time access to transaction records.
With resources freed from traditional evidence collecting and testing, audit firms should consider applying appropriate data analytics in blockchain, and expand advisory services such as control design, change management, and blockchain governance
In July 2017, an unknown hacker managed to steal nearly $32 million US dollars’ worth of Ethereum, one of the most popular virtual currencies.
The root cause of this fraud was not related to deficiencies in the blockchain technology but, rather, due to a vulnerability within the software that was used to manage Ethereum wallets. The fraud was quickly detected and related parity vulnerability mitigated accordingly, to safeguard the remaining wallets.
Create automated controls to validate transactions before they are executed.
Smart contract audit is the thorough scrutiny of the code that is used to underwrite the terms of Smart contract. It involves meticulously analysing the code to find and correct bugs, vulnerabilities and error in business logic.
Conducting a manual review of the smart contracts and identifying critical, major & minor bugs along with the recommendations.
A document is prepared to highlight & solve the critical, major and minor bugs and developers work on refactoring the code.
The Initial Audit report is edited & the refactored code is used to prepare final audit report along with our approval.
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Coordinator: Blockchain Nigeria User Group