Security Best Practices

Keep Your BACON Ecosystem Secure

Wallet Security

Private Key Management

  • Never commit private keys to version control
  • Use environment variables or secure secret management
  • Encrypt private keys at rest
  • Use hardware wallets for large treasury amounts
  • Implement key rotation policies 
# Use environment variables
export BACON_PRIVATE_KEY="your_encrypted_key"

# Or use secret management services
# AWS Secrets Manager
# HashiCorp Vault
# GitHub Secrets

Multi-Signature Wallets

For production treasuries, use multi-signature wallets requiring multiple approvals:

// Create 2-of-3 multisig wallet
const multisig = await bacon.createMultisig({
  threshold: 2,
  signers: [signer1, signer2, signer3]
});

// All large transfers require 2 signatures
await multisig.proposeTransfer({
  to: recipient,
  amount: 10000
});

Hot and Cold Wallets

  • Hot Wallet: Small balance for daily operations
  • Cold Wallet: Large treasury stored offline
  • Regularly transfer funds from hot to cold storage
  • Set up automated alerts for hot wallet balance

Application Security

Input Validation

// Validate addresses before sending
function isValidAddress(address, blockchain) {
  if (blockchain === 'bitcoin') {
    return /^(bc1|[13])[a-zA-HJ-NP-Z0-9]{25,62}$/.test(address);
  } else if (blockchain === 'solana') {
    return /^[1-9A-HJ-NP-Za-km-z]{32,44}$/.test(address);
  }
  return false;
}

// Validate amounts
function isValidAmount(amount) {
  return typeof amount === 'number' && 
         amount > 0 && 
         amount <= MAX_REWARD_AMOUNT &&
         Number.isFinite(amount);
}

Rate Limiting

const rateLimit = require('express-rate-limit');

const limiter = rateLimit({
  windowMs: 15 * 60 * 1000, // 15 minutes
  max: 100, // limit each IP to 100 requests per window
  message: 'Too many requests'
});

app.use('/api/', limiter);

Webhook Verification

const crypto = require('crypto');

function verifyGitHubWebhook(payload, signature, secret) {
  const hmac = crypto.createHmac('sha256', secret);
  const digest = 'sha256=' + hmac.update(payload).digest('hex');
  return crypto.timingSafeEqual(
    Buffer.from(signature),
    Buffer.from(digest)
  );
}

app.post('/webhook', (req, res) => {
  const signature = req.headers['x-hub-signature-256'];
  if (!verifyGitHubWebhook(req.body, signature, WEBHOOK_SECRET)) {
    return res.status(401).send('Invalid signature');
  }
  // Process webhook
});

Transaction Security

Pre-Transaction Checks

  • Verify recipient address format
  • Check treasury balance before sending
  • Validate transaction amounts
  • Confirm recipient is not blacklisted
  • Check for duplicate transactions

Transaction Monitoring

  • Log all transactions with timestamps
  • Monitor for unusual patterns
  • Set up alerts for large transfers
  • Track failed transactions
  • Monitor blockchain fees

Fraud Prevention

  • Implement daily withdrawal limits
  • Require approval for large amounts
  • Detect and block suspicious addresses
  • Monitor for Sybil attacks
  • Verify GitHub account authenticity

Audit Trail

  • Maintain immutable transaction logs
  • Store logs off-chain and on-chain
  • Regular security audits
  • Compliance reporting
  • Incident response procedures

Smart Contract Security

Code Audits

  • Have contracts audited by professional security firms
  • Conduct internal code reviews
  • Use automated security scanning tools
  • Implement bug bounty programs
  • Regular security updates

Common Vulnerabilities

// ❌ BAD: Reentrancy vulnerability
function withdraw() {
  uint amount = balances[msg.sender];
  msg.sender.call{value: amount}("");
  balances[msg.sender] = 0;
}

// ✅ GOOD: Protected against reentrancy
function withdraw() {
  uint amount = balances[msg.sender];
  balances[msg.sender] = 0;
  msg.sender.call{value: amount}("");
}

// Use ReentrancyGuard
modifier nonReentrant() {
  require(!locked, "No reentrancy");
  locked = true;
  _;
  locked = false;
}

Access Control

// Implement role-based access control
const roles = {
  ADMIN: 'admin',
  MINTER: 'minter',
  DISTRIBUTOR: 'distributor'
};

function checkRole(user, role) {
  if (!userRoles[user].includes(role)) {
    throw new Error('Unauthorized');
  }
}

// Only admins can mint
async function mint(amount) {
  checkRole(msg.sender, roles.MINTER);
  await token.mint(amount);
}

Operational Security

Environment Separation

# Development
BACON_NETWORK=testnet
BACON_DEBUG=true

# Staging
BACON_NETWORK=testnet
BACON_DEBUG=false

# Production
BACON_NETWORK=mainnet
BACON_DEBUG=false
BACON_REQUIRE_2FA=true

Monitoring and Alerting

// Set up alerts
bacon.on('low-balance', (balance) => {
  sendAlert('Treasury balance low: ' + balance);
});

bacon.on('large-transaction', (tx) => {
  sendAlert('Large transaction detected: ' + tx.amount);
});

bacon.on('failed-transaction', (error) => {
  sendAlert('Transaction failed: ' + error.message);
});

Incident Response Plan

  1. Detection: Monitor for security incidents
  2. Containment: Immediately pause affected systems
  3. Analysis: Investigate the scope and cause
  4. Eradication: Remove the threat
  5. Recovery: Restore normal operations
  6. Post-Incident: Document and improve processes

Compliance and Privacy

OWASP Compliance

  • Follow OWASP Top 10 security guidelines
  • Implement secure coding practices
  • Regular security testing and audits
  • Transparent fund management
  • Open-source code for community review

Data Privacy

  • Minimize collection of personal data
  • Encrypt sensitive information
  • Comply with GDPR/CCPA if applicable
  • Provide data export and deletion options
  • Clear privacy policy

Regulatory Considerations

  • Understand local cryptocurrency regulations
  • Consult legal counsel for compliance
  • Implement KYC/AML if required
  • Maintain transaction records
  • File appropriate tax forms

Security Checklist

Pre-Launch Checklist

  • Private keys secured and encrypted
  • Multi-signature wallet configured
  • Hot/cold wallet strategy implemented
  • Input validation on all endpoints
  • Rate limiting configured
  • Webhook signature verification
  • Transaction monitoring set up
  • Fraud detection rules defined
  • Audit logging enabled
  • Emergency shutdown procedure
  • Incident response plan documented
  • Security audit completed
  • Compliance requirements met
  • Team security training completed

Ongoing Security Tasks

  • Daily treasury balance checks
  • Weekly transaction reviews
  • Monthly security audits
  • Quarterly penetration testing
  • Regular dependency updates
  • Continuous monitoring alerts

Security Resources

Learn more about blockchain security

OWASP Resources Report Security Issue