Everything You Need to Know About Blockchain Development
All industry leaders are opting for blockchain nowadays: Siemens, Ford, DHL, Delta Airlines, and many other companies from a variety of business sectors have already embraced the benefits of this new technology.
If you are interested in building your own blockchain, then go step-by-step with this article and by the end of it, you will understand what blockchain is, how it can benefit your business, where to begin, what tools to use as you go.
Blockchain and its pillars
The most important thing one needs to understand about blockchain is that it is a system of recording and structuring information; and once information is recorded, it is almost impossible to retroactively change it, tamper with it, or cheat in any other way. Essentially, this is a massive decentralized database that is transparent to anyone interested.
The name of this system states the way information is recorded – in blocks; each block contains a timestamped digital record and such blocks are cryptographically linked together into a chain.
The blockchain technology stands on four main pillars:
- Decentralization: There is no single authority in the system that approves or declines transactions. Every member of the system can access, verify, accept, and reject every piece of data, therefore the probability of the single point of failure is eliminated.
- Transparency: Every single transaction made by every single member of the system can be verified by any member of the system. The personal data of every member gets encrypted but the rest remains open for anyone interested.
- Trust: Mass consensus is what makes any changes and new data added to the system. Whenever one user wants to make a change, add or remove a block of information, the rest of the system members are asked to accept the change. This creates trust within the community since everyone sees and accepts everyone’s changes.
- Security: This pillar is reached via immutability – once an event happens, it cannot be erased or changed in the blockchain. If any piece of data is changed in the latest block, the rest will be affected and so the whole system will be changed. Since consensus is not likely to accept such changes, the data remains untouched – secured.
What are the benefits of blockchain?
Every business owner who has blockchain project ideas in mind needs to weigh all pros and cons of the new system and evaluate how beneficial such implementation can be for a business.
Most often these are financial and market advantages companies thrive for, yet some businesses turn to blockchain development for transparency or enhanced security of the existing systems and processes.
Below you can find some of the perks the know-how of the tech world can offer. And please note that these are truly some of them since every business can have its own interest in such technology implementation.
- Fast data verification without having to rely on a third party (as opposed to centralized systems)
- Transparent and well-organized data that cannot be changed or deleted
- Easily traceable data regardless of its creation data and owner
- Faster operations due to universally open access to the ledger information for everyone
- Reduced operational costs (no external and third-party validations)
- No single point of failure hence greater stability and dependability of any service based on blockchain
- Minimized risk of data duplication and fraudulent information because every entry is verified and accepted by consensus – multiple users
- Automation of the processes with smart contracts and conditions
Is blockchain development universal?
Many companies worldwide think about how to implement blockchain technology effectively, and just as many believe that it is valuable only within the financial branch of business solutions. In reality, blockchain can be implemented into the existing processes of any company in any industry considering that almost every form of digital information can be stored in the blockchain manner.
The World Economic Forum even predicts that about 10% of the world’s GDP could be stored in blockchain within less than a decade. However, of course, such implementation should be conscious and reasonable. This is why the top examples below can be tips on how to implement blockchain in your business and when it is worth the effort.
- Any identity-based process (including governmental processes, delivery systems, healthcare businesses): Since everything in the blockchain is accepted or rejected based on the consensus, everyone’s identity can be confirmed by one. So whenever an identity check is required, the blockchain and consensus verifies all the DNA-tied biometrical data with encrypted “proof of existence” and verifies the data much easier and faster. And considering that in blockchain cheating is close to impossible, identity theft threat seizes to exist.
- Healthcare: Healthcare records can become universally accessible worldwide if governments agree to develop a blockchain application that would provide such information to any person on the planet. With blockchain, all information will be securely coded in the app, and only selected individuals will know which protocols to follow in order to decode the data. Decentralization of medical records can also simplify hospital transfers and doctor changes.
- State records and documents provision: Today a citizen of any country needs to apply for a particular document in a particular place and then wait for all the verification to happen for a set (or not) time period. With the smart contracts, all those records can be called for within a matter of seconds and all verifications can happen much faster. Moreover, even voting could be handled through blockchain in a more secure and transparent matter.
- No-contracts real estate: With a smart contract, there is no need for a contract in its current legal understanding. Everything can be based on the if-else statements; and when the statements are met, the asset exchange can happen.
- Logistics: 8 trucks of goods get stolen daily due to unsecured parking and identity fraud. With the blockchain verification of identity, the number can be cut in half since the system will confirm the driver’s identity.
- Retail: Blockchain can prevent major counterfeit losses the retail industry suffers yearly. The graph below demonstrates that more than a quarter-billion dollars gets lost by the clothing industry due to counterfeit. However, blockchain can guarantee product safety by providing purchase development history (factory, labor involved, country of production, etc.) hence ensuring that fake products do not reach the store shelves.
While the generic examples above sound amazing, there are still doubts whether such mechanisms and changes can be used today, in 2020. Well, the truth is they are already in place. Dubai’s government supports blockchain initiatives to make the city and state even more futuristic. Cambridge has launched a solution to help educational institutions worldwide meet the latest GDP regulations easily.
Walmart has implemented blockchain into their delivery systems to provide clear information about the supply chain transparently and also control the food quality.
As you can see, blockchain is getting an indispensable part of the 2020 reality and the nearest future. Startups and moguls turn to blockchain for easier and more comfortable solutions to provide customers with the highest levels of safety and transparency of their goods and services.
Before you get to building blockchain projects
When you get into blockchain development it is essential to remember that this is yet another implementation choice for your standard development process; expect it takes more time to deliver the end product to the market.
Moreover, blockchain can also be regarded as a type of database that is vast, based on peer-to-peer operations, extremely secure, and transparent in use. By addressing blockchain as a database, it can be easier to find the common ground between your existing systems and the high-tech solution offered by the blocks of data.
Whenever programmers work to develop blockchain and solutions based on it, they still need to follow the basic processes of testing and debugging, to select the programming language, and to work on the app (Dapp) design.
So if you already have a team of development experts, they will be able to adjust the existing process to match specifics of blockchain development without having to learn everything from scratch.
And the most important fact about blockchain development is that the demand for a professional and knowledgeable developer in this field is still significantly higher than the existing resources pool.
If you need a trustworthy blockchain developer, check our guide on how to find and hire a reliable blockchain developer for your project.
Read also: How to Build a P2P Payment App
What are the approaches to blockchain app development?
Whenever the question “what is blockchain application development” is set, it generally means defining the final product of the process and therefore clarifying the means required. Traditionally, blockchain development company divides products into three categories: platforms, software, and specialized software. All of them are Dapps but of a different nature.
Note: Before you decide that platform is better than software or specialized software is your best choice, remember that the type of development depends on the problem your project aims to resolve and the project scope.
If you’re a novice or this is your first time developing a blockchain application, we recommend the Platform or Software approach. Forking Bitcoin or Litecoin code is a great way to learn blockchain basics. Likewise, building a simple app on top of platforms like Ethereum is an excellent way to ramp-up early skills.
Developing a whole blockchain platform means creating another option for others to build upon (like currently, people do with Etherum). A platform can be built from scratch or by forking already existing blockchains.
The Platform-from-scratch approach to blockchain is beneficial when you have a unique idea and know how to stand out from the crowd with your new product. However, be ready to create your own blockchain from scratch takes deep knowledge and understanding of the whole cryptocurrency world and a lot of time. Whenever you only get into the blockchain world, platform-by-forking is the best way to go.
The concept of software means the development of your app that runs on the existing platforms (Etherum, Bitcoin, etc.) If you have a specific problem with a narrow solution, then you can build a blockchain software.
This approach is also beginner-friendly since the existing blockchain platform already has a community of developers who can help with resolving specific issues with the development, plus there are more capable developers for this kind of job.
However, be aware that by building your own software on top of the existing system you automatically agree to inherit all the downsides of the base material.
A specialized software example is any open-source project of Bitcoin. This is essentially building an app, protocol, or plug-in that will integrate with the rest of blockchain apps or protocols. Specialized software comes in handy whenever you have a particular blockchain community project and you know how to resolve a specialized problem by building your project on top of it.
When you build blockchain specialized software, you get the same downside as with the software approach – the inheritance of all the ancestor’s downsides. However, at the same time, the robust performance of your selected community project also transfers to your own app.
Which blockchain technology to select?
Since you are reading the article on how to create a blockchain software, you are likely not to know much about the technology and not to know a lot about the development in general.
This means that it is too early to build your own blockchain from scratch and it would be much more beneficial to consider forking to the existing platform or developing your own app based on the existing platform. This is why below are the top platforms for your consideration.
When to use: when you are not planning to reinvent the wheel and you opt for a public Dapp with smart contracts.
When to use: permissioned blockchain is the core here, so this platform is better for business-ready blockchain apps. If your app is related to some private channels for ledgers, this is your best choice.
When to use: for Bitcoin-based applications (transactions, exchange, payments, wallet) or API (for the improvement of Bitcoin).
Features: multiple forks available for easy app development plus the support of C#/NBitcoin, Python, Ruby, or Node.js for an easier transition to blockchain development.
When to use: for the ideas of the future and if you are planning an app for microtransactions and quantum-safe technology.
Features: This technology is even newer than Bitcoin and Ethereum so it might be tough to comprehend yet once done, it can bring you to the next level.
What are the risks in blockchain?
If you were wondering how to develop blockchain applications without risks the answer is simple – there is no such thing. Every development project is adjoint to risks, and for blockchain the greatest one is bugs.
Debugging is a challenge for every development project, and the easiest way to solve the problem is by hiring a good QA that would automate the processes. Besides that, ensure to use a testnet to run the app and uncover the issues without spending your capital.
It is also advised to go with a block-by-block verification whenever possible. And keep in mind that implementation of a buggy code to blockchain results in those bugs staying in the system forever (!); and while others would see immutability as manna, it will become your worst nightmare.
Being a new and futuristic approach to development, blockchain also has troubles with legacy systems integration. Sometimes, a small army of experts is needed to explain how to build blockchain and then how to merge it seamlessly into the existing processes and software. But if you are ready to invest time and resources into the process, you will reap the laurels sooner or later.
The blockchain industry lacks standardization; this means that almost every app and platform based on this technology has its own protocols, consensus mechanisms, uses particular coding languages and privacy measures.
As a result, the blockchain community is missing uniformity across its protocols and basic processes such as security. As a result, interoperability became a hot topic and many networks began offering some due to the increased interest in the mass adoption of global technology.
With this in mind, you need to understand that these obstacles are not blockers on the way to creating your own blockchain app. Yes, these are challenges, and yes, you will need to be creative in order to overcome them. However, development is possible because otherwise there wouldn’t already be over 6,500 projects based on blockchain.
How much does it cost to build a blockchain-based platform?
The cost of any blockchain product depends on a number of factors like scope and timeframe. Here are the top conditions to account for:
- App scope
- The team
- Project management tools
- Supporting tool subscriptions
- Additional factors
The app scope depends on the problem you are planning to resolve, therefore on the complexity of the whole application and its architecture. Here is a couple of examples:
- Low-scope apps: smart contracts and payment apps
- Medium-scope: semi-decentralized and hybrid apps, Dapps based on the existing platforms
- High-scope: blockchain platform or a decentralized network from scratch
Whatever the complexity of your project is, the real cost depends on the salaries you will have to pay to the involved experts. The salaries vary for every country, position, and task as well as in-house vs outsourced experts. A single freelance developer will cost less than an in-house team of blockchain experts – this is the universal truth. Here are the average yearly salaries for blockchain experts:
- US: min $70,000 and up to $200,000 (avg $136,000)
- Asia: min $60,000 and up to $120,000 (avg $87,000)
- Europe: min $55,000 and up to $91,000 (avg $73,000)
As you can see, European developers earn less than colleagues around the world and if you are short on budget, consider getting an expert from this region to cut the cost.
Project management tools
Most probably, your blockchain development will be managed by a scrum or agile coach who needs some management tools, like Jira or Confluence. There will always be a need for the testing tools, timeline trackers, deliverables, etc. You need to remember that all such services also have subscription fees and the should be accounted for when the total project cost is estimated.
Third-party tools are different from blockchain development tools. These are special programs, platforms, and servers that are needed to store data, monitor application health, and monitor its performance. AWS, Nagios, servers, and many other supporting tools and services will also require subscriptions and monthly payments.
Every industry has its average cost for blockchain services. For example, healthcare and real estate are in high demand today so the cost of an app in these industries will be higher than a Dapp for education and small business. It is the demand that dictates the rules here, so the more popular a business field is, the more expensive it will be to develop an app within it.
What are the best blockchain app development tools?
The list of blockchain development tools can be endless because every project, app, platform, and solution requires a different set of tool for problem solving. Nonetheless, below are the top seven tools for consideration.
- Geth for mining Ethers, creating smart contracts, and running them on EVM.
- Remix IDE is a browser-based tool for creating and deploying small smart contracts.
- GanacheCLI is a blockchain emulator for stimulating the Ethereum network on a single computer.Solium formats solidity code and is designed to fix security problems in the code.
- Metamask is a browser extension wallet that helps to connect a browser with Ethereum blockchain.
- Blockchain Testnet for testing your apps before deploy.
How long does blockchain development take?
There is no rule of a thumb when it comes to blockchain projects duration. The PoC takes about 3 weeks, then another 5 for the development of a product with bare minimum features is required. Another 3 months would be needed to launch the app. But these are the numbers for a simple and basic blockchain app. Development of a platform or software from scratch can take years.
In fact, the length of a project frequently depends on the budget. The higher the budget is, the longer the development continues since there is always space for improvement. So to understand how long your idea will require, calculate your budget and see for how long it can last. Then you will get a realistic timeframe between the app idea and its launch.
What is the blockchain development process?
Below you will read the standardized development process of any project. Yet, every particular development task, project, platform, and idea will and should have their own modifications of the scheme presented because there are no projects alike and each requires a unique approach.
1. Problems identification
- What kind of problem do you want to solve with a new solution?
- Do you need to integrate it with any legacy system?
- Do you want to migrate the existing solutions to blockchain?
2. Choose the platform
- Do you opt for a from-scratch approach?
- Can you build on the existing platform?
- Which existing platform provides benefits you require (consider consensus mechanism, for example)?
- Which downsides you can overcome?
3. Ideas collection and blockchain ideation
- What are your business requirements to the new solution?
- What is the essential concept of the app?
- Which tech components are essential for the new app?
- Which of those components will go on blockchain and which off the technology?
- What is your time frame?
- What is the roadmap of development?
- What languages do you plan to use for back- and front-ends?
- Which databases do you need?
- Which servers will be beneficial?
- Permissioned or permissionless blockchain?
4. Doing a proof-of-concept
In a perfect scenario, to verify whether your idea is worth development, you will create a prototype of the app for trial tests with users. However, many companies go for a theoretical build-up due to financial and time constraints.
5. Visual and tech designs
After the PoC stage is passed you have the whole app planned and drafted (on paper or in a prototype). So at this stage, architecture and UI are planned to set up the skeleton for the development.
This is where blockchain developers step in to finally build your app.
- Pre-alfa: basic functionalities to see the actual view of the app
- Alfa: more features are added and the app is formally tested and released
- Beta: development completes all planned features and external usability testing is held
- Post-beta: removal of the bugs identified in Beta and the app is prepared for release
- Release: final version of the app gets available to end-users
After the app is released, maintenance procedures step in to ensure that the app continues to work with newer systems and technologies and to remove the newly appearing bugs to maintain a positive image for the end-users.
Blockchain is a massive fast-growing industry occupying every aspect of modern life and contemporary business. The current state of the market proves that the industry will continue growing in the upcoming decades, so now is just the right time to step in. If you are planning digital transformation, need to enhance your business processes, or have a know-how in mind, then blockchain is your technology to do so.
Should you have any questions, feel the need of some clarification, plan to hire a developer, or want to consult on creating a blockchain, 4ire Labs is equipped to do so. We have a team of experienced developers, engineers, consultants, project and community managers, designers, and engineers all of whom specialize in blockchain and can benefit any project.
Contact us here and we will create a personalized cooperation plan for your needs and requirements.