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Bug Bounty vs. Penetration Testing: Differences Explained

 |  HackerOne

What Is the Difference Between Bug Bounties and Penetration Testing?

Companies offer ongoing bug bounties to freelance ethical hackers to discover security vulnerabilities. Alternatively, penetration testing is a scheduled test of a system’s security to identify weaknesses and vulnerabilities.

Bug Bounty vs. Penetration Testing—Key Differences

Bug bounties are flexible programs that can run continuously or for a set period of time. Bounty programs usually continue for the product’s lifetime and allow the hacker community to find new vulnerabilities as the application changes. Bug bounties provide a community of dedicated, incentivized hackers to find security flaws on an ongoing basis.

Penetration testing can be performed annually or as frequently as every week depending on the environment. Events such as upcoming product releases and company acquisitions can call for a penetration test. Most people are familiar with pentesting as a means of attaining compliance against PCI-DSS, SOC 2, ISO 27001 and other security standards.

When comparing bug bounties and penetration testing, the bounty hunter's job is exclusive to finding vulnerabilities. The hacker describes the vulnerability and exploitation possibilities and submits a report to the organization. If the bug is valid, the hacker is paid the bounty with an amount reflecting the disclosed vulnerability's severity.

The power behind bug bounty programs comes from the wide range of hacker community experience and skillsets. So rather than a single security professional testing your network, you have hundreds of expert hackers working on researching your network.

In penetration testing, the objective is to prove coverage. Organizations can still pass PCI-DSS compliance requirements, for example, if no vulnerabilities are found. However, many penetration testers do discover vulnerabilities; they thoroughly document how that bug can be exploited, and how it can affect an organization’s compliance.

Following a penetration test, the company receives a report detailing the nature of the attack and associated vulnerabilities. These reports contain recommended action steps for administrators to remediate the issues.

Bug Bounty vs. Penetration Testing: Cost

Penetration testing costs range from $4,000 to $100,000 and depend on network size and engagement scope. Extensive networks with more applications and complexity can expect to trend on the higher side of that range. Penetration tests are worth the investment, especially for larger companies with more to lose from a cyberattack


With penetration testing, your cost is upfront, whereas bug bounties pay over time. According to IBM’s 2020 Cost of a Data Breach Report, the global average cost of a data breach is $3.8 million. With attacks such as spear phishing and ransomware on the rise, it pays to be proactive when it comes to your corporate network’s security.

Bounty programs pay with the successful discovery of a vulnerability, allowing smaller businesses to offer budget-friendly bounty programs that scale with severity. While bounty programs may cost less upfront, they still need to be priced competitively to incentivize the hacker community. Bug bounties can pay out anywhere from a few hundred dollars to thousands of dollars per vulnerability, depending on the bug’s impact.

Pros and Cons of Bug Bounty Programs

Bug bounty programs are flexible, evergreen ways a company can continuously test its applications and network security. Let's compare the pros and cons of bug bounties versus penetration testing.

Advantages:

  • Bug bounties have flexible pricing that is adjusted to fit different budgets.
  • Bug bounties can find more vulnerabilities than a penetration test over time.
  • Bug bounties attract a wider audience with diverse expertise.
  • Bounties only pay once a vulnerability is disclosed.

Disadvantages:

  • Bounties need to pay competitively to motivate hackers.
  • Bug bounties only find a vulnerability and do not test beyond that; they cannot be used to prove compliance.
  • Bug bounty findings need to be validated and analyzed for accuracy.
  • Bug bounties offer less complexity and lack internal testing provided by penetration testing.

Bug bounty hunters can only test what is publicly accessible, like an application, website, or online interface. Penetration testing can vary in scope, with the added benefit of testing internal security and more sensitive systems that are not public-facing.

Pros and Cons of Penetration Testing

Penetration testing’s best advantage is its thorough coverage and documentation. Penetration tests are in-depth and can start from inside or outside the network with various testing options. In addition, the project scope is more refined, allowing you to specify systems or applications for testing.

Advantages:

  • Penetration testing often involves a more focused scope, allowing companies to stress-test specific aspects of their business.
  • Testing can provide more coverage by targeting and reporting on a scope of work instead of only reporting on valid vulnerabilities.
  • Penetration tests use small dedicated teams to identify vulnerabilities faster than a single tester.
  • Pentests offer the opportunity to test internal systems and unfinished applications.

Disadvantages:

  • Only a small group of skilled testers are used during a penetration test.
  • Penetration tests have a finite time frame that is dependent on the scope of the project.
  • Penetration testing only offers a snapshot of issues found during the tests. Testing is not continuous.

What About Vulnerability Scans?

Vulnerability scans are different from both penetration testing and bug bounty programs. Vulnerability scans are automated checks that continuously highlight vulnerabilities in outdated software, unpatched systems, and misconfigured hardware. Bug bounty hunters and pentesters often use a scanner as a first step. 

Bug bounties are more comprehensive than vulnerability scans and provide a way for companies to triage issues more efficiently. This improves the remediation process by categorizing, prioritizing, and documenting vulnerabilities in a more streamlined manner.

Bug bounty hunters find creative ways to exploit custom-built applications and find vulnerabilities often missed by generic scans. Penetration testing fully exploits vulnerabilities and puts theory into practice. Internal tests offer significantly more detail about how attacks can spread once in the network and reveal weak internal security processes such as password concerns and improper network segmentation. At the end of the day, it’s best practice to incorporate automated vulnerability scanning in tandem with manual penetration testing

Why Businesses Need Bug Bounties and Penetration Testing

With cybercrime on the rise, organizations should leverage penetration testing and bug bounty programs striking a balance between in-depth testing and evergreen vulnerability discovery.

Bug bounty and penetration testing complement each other when implemented together. A bug bounty program can provide a consistent, year-long form of testing that eventually leads to an annual penetration test ensuring the safety of internal systems and applications.

Companies on a tight budget can use the results from a vulnerability scan to fix issues found internally while also running a bug bounty program for public-facing applications and networks.

How HackerOne Can Help

HackerOne harnesses hacker-powered security to help keep businesses safe. The HackerOne platform gives you a live look into the progress of an ongoing penetration test and allows you to track key metrics from kickoff to remediation. 

The HackerOne bug bounty program is streamlined and convenient, bridging the gap between hackers and businesses. The program supports everything from disclosure to payout in a single dashboard.

HackerOne’s hacker-powered pentests are powered by the world’s largest and most diverse community of hackers in the world. You’ll get more coverage, instant results, and seamless remediation in one platform. Sign up for our penetration test demo to learn more.