Technology

Blockchain Development: Where to Start?

Blockchain is one of the most popular technologies in the world. Its promising outlook is confirmed by recent research made by McKinsey, Gartner, and other consulting firms. Enterprises not only use this innovation for financial operations but also develop business applications on its basis. In this piece, we are giving a detailed guide to Blockchain development.

Briefly about Blockchain technology

Blockchain is a decentralized ledger technology that makes it possible to transfer information as a chain of blocks. This chain of blocks works like a database, copies of which are stored on thousands of computers (nodes) at once. These nodes are both client and server at the same time.

When a new transaction is added to the chain, the database in each node is updated. The new block contains information about the operation in the form of an encrypted hash and the hash of the previous block. The initiator of the transaction only can open the block if they are a member of the network and have a special secret key. Moreover, the transaction needs to be confirmed by 51% of other users by voting for its authenticity. Thanks to such protection, information is not possible to steal or change.

Security, data authenticity, and transparency – which Blockchain offers – are what attract organizations from various sectors of the economy. Business owners are willing to invest in the technology. In the first quarter of 2021 alone, Blockchain companies raised more funds than in the entire 2020. And although this technology is mostly used in the banking industry and for advanced eCommerce solutions, 45% of organizations are planning to implement it for secure information exchange. Economists from PwC predict that, by 2030, Blockchain will increase the world GDP by $1.76 trillion.

Advantages of Blockchain development

Leading companies are aspiring to introduce Blockchain into banking, logistics, the public sector, healthcare, retail, and other industries. They want to improve their business models and gain a competitive advantage.

Blockchain adds value to businesses by providing:

1.  Greater transparency of business processes.

Members of a Blockchain network equally participate in the approval/rejection of transactions and can view the transaction archive. Therefore, non of the users are able to cheat or fake data.

Businesses apply the structure and capability of Blockchain to organize supply chains. All the manufacturers, carriers, suppliers, and sellers are networked; this makes it easier for them to manage delivery and track the movement of goods, their origin, and quality. Fraudsters are not able to steal goods or ship counterfeit products because they can be easily detected by records in Blockchain.

2.  Accelerated operations.

When a business conducts transactions manually, they take a lot of time and involve intermediaries. Payments are confirmed on paper, and sometimes specialists make mistakes. With Blockchain, the payment procedure goes easier. Network members operate within a single digital ledger that can be used for record-keeping. Each network member takes information for quick calculations from blocks.

3.  Time and cost saving.

Accelerated operations allow network members to save their resources. They don’t have to spend time checking documents to make a transaction. Partners can trust each other, and the consensus conditions are automatically checked by a smart contract. Intermediaries who used to act as guarantors of trust between partners are no longer needed. Hence businesses don’t pay for the services of third parties.

CEO of Accenture Julie Sweet emphasizes that “Blockchain should be used to address opportunities and problems that lack easier answers.” So how do you figure out whether Blockchain is right for the development of your software?

When a Blockchain project is worth planning

In order to decide whether your enterprise needs a Blockchain application, consider if:

1.  Your company doesn’t need to store data in a centralized fashion.

If a firm is not going to store large amounts of data, there is no need to introduce Blockchain. It is recommended to consider potential profit and development costs even if you want to secure a medium-sized application with Blockchain. When a business doesn’t need to centrally store the collected information, it can also rely on Blockchain technology. Autonomy from a center will reduce commissions and delays, as well as eliminate a single point of system failure.

2.  Your business processes involve many participants, and there is no trust between them.

Blockchain is needed in those systems where several partners cooperate but have no trust in each other. The technology ensures this trust by introducing an agreed consensus algorithm for everyone. All participants comply with the agreement, and its execution is checked with smart contracts. Deceiving a partner or fake data is impossible, hence the network guarantees the impartiality of transactions and records. Also, business owners don’t need intermediaries who guarantee the honesty of their partners and take a share of their profits (banks, freight forwarders, etc.).

3.  Your business definitely needs an immutable database.

Information in databases can be lost due to malfunction or a human error. Immutability is what protects business-critical information. If a business wants to secure its assets, it should place them in a distributed database – Blockchain.

4.  Your business operates under stable verification requirements.

Trusting your business partners is crucial when doing a business. Blockchain gives your business this missing element – i.e., trust. The technology validates transactions and verifies users via consensus. If a business doesn’t need to frequently change the rules for authenticating participants and conducting transactions, it can use Blockchain.

If you agree with all the above statements, the development of your Blockchain applications is worth thinking about.

How to develop a Blockchain business application?

The stages of Blockchain app development are the same as those of a classic project but with some peculiarities.

1.  Define the goals of your Blockchain development.

First and foremost, a business needs to figure out what challenges impede its advancement and how Blockchain can resolve them. It is important to consider options for using the technology within your organization and choose the most profitable method.

For instance, introducing Blockchain to store profiles of hobby app users is expensive and unreasonable. By contrast, it is reasonable to secure medical records or keep real estate registers in a decentralized database. It is recommended to assess various options for using Blockchain apps and their advantages for users and your business.

2.  Choose a platform for Blockchain development.

There are three ways to develop Blockchain, each of which determines the choice of a platform and technologies for dApps:

● Development of Blockchain from scratch.  

A team thinks out and builds its own Blockchain from scratch: independently chooses the tech stack, network type, and the method of implementing the consensus and implements a transaction verification mechanism and algorithm. This is the most expensive and labor-consuming way to develop a Blockchain app. Businesses usually opt for this method when they plan to create their own cryptocurrencies.

● Development based on ready-made platforms.

Deploying a ready-made Blockchain solution on servers is a faster way to introduce the technology to a business. Ready-made platforms have open-source code that can be used as a basis when developing business apps. The most popular platforms are Ethereum, Hyperledger Fabric, and Hyperledger Sawtooth. All of them have their peculiarities, so you should study the capabilities of each to see which is best for your project.

● Usage of tokens on existing Blockchain platforms.

Developers can create a token (a coin or a smart contract) and deploy it on a public platform (e.g., Ethereum). The platform provides ready-made APIs, algorithms, and mining strategies that make it easier to implement Blockchain in an app. There is no need to open a separate wallet for tokens because Ethereum tokens are accepted by many wallets.

This development method is similar to creating an online store on the basis of Shopify. Shopify provides all the necessary functionality, so a business owner only needs to fill in the ready-made pages with data. Developers code tokens and deploy them in Ethereum in the same fashion. The platform offers off-the-shelf services that can be applied to transactions using tokens.

3.  Determine requirements for your Blockchain product.

It is necessary to take care of product requirements so that developers understand what functionality to implement in your app. Create a product roadmap to present your vision, work progress, and deadlines to the development team. Also, specify technical characteristics: programming languages, servers, external databases, Blockchain model, and network type. These are the starting points that determine product development.

4.  Create a prototype of your software.

Andersen recommends creating a prototype to see whether a planned app is going to function the way you want. A prototype includes:

  • sketches;
  • mockups;
  • tested product;
  • product structure;
  • information architecture.

Decide what part of the software will be inside your network and what part will be outside of it. For example, regular functions can run in the cloud, and transactions can run on a Blockchain platform.

Network APIs should be separated from external APIs, as they are stored in different places. It is worth defining consensus algorithms and transaction strategies for your future software.

5.  Think out the app architecture and visual design.

It is necessary to discuss the aspects related to technical (architecture) and visual designs. Engineer UIs for each program component, develop APIs, and integrate them with the UI for running the app on the back-end part. Also, think over the aesthetic design to make sure that users enjoy interacting with the program.

6.  Develop and test your software.

In Agile projects, development and testing are carried out continuously and simultaneously. In more classic software development models, these processes are sequential. But the essence of these steps of SDLC remains the same regardless of their order.

Developers will work on the creation of a Blockchain app and integration of APIs for specific use cases:

  • audit;
  • data storage and search;
  • key generation and mapping with particular addresses;
  • data authentication using hashes and digital signatures;
  • smart contract launch and management.

Testers check the quality of a Blockchain app through A/B testing. Once a version is approved, the software moves into production, and the team prepares it for delivery.

7.  Deploy your Blockchain app and maintain its operation.

Administrators decide on the resources where Blockchain needs to be deployed. For example, some of the software functionality is hosted in the cloud, and some of it is hosted in Blockchain. The delivery of a product to production is not the end of a project. In order to operate and be updated without problems, software needs to be maintained.

Conclusion

Nowadays, Blockchain is becoming a technology that protects business assets and reputation, builds trust between partners, and optimizes internal operations. The technology helps businesses develop and be competitive. If you want to benefit from the use of this innovation, it is necessary to design and implement Blockchain apps correctly. And if you have little experience in the matter, enlist the help of a Blockchain development company.

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