Considerations to Hire a Blockchain Development Firm
A blockchain is a decentralized digital ledger that saves transactions on thousands of computers around the globe. These are registered in a way that hinders their subsequent modification. Blockchain technology increases the protection and speeds up the exchange of information cost-effectively and more transparently. It also allocates with third parties with the main role to provide a trust and certification element in transactions (such as notaries and banks).
A blockchain is a distributed, cryptographically-secure database structure that allows network participants to establish a trusted and immutable record of transactional data without the need for intermediaries. It can help execute a variety of functions beyond transaction settlement, such as smart contracts. Smart contracts are digital agreements that are embedded in code and that can have limitless formats and conditions.
Blockchains have proven themselves as superior solutions for securely coordinating data, but they are capable of much more, including tokenization, incentive design, attack resistance, and reducing counterparty risk.
The “block” in a blockchain refers to a block of transactions that have been broadcast to a certain network. The “chain” refers to a string of these blocks. When a new block of transactions is validated by the network, it is attached to the end of an existing chain. This chain of blocks is an ever-growing ledger of transactions that the network has validated.
How Many Types of Blockchain are there?
Innovators are discovering ways to enforce blockchain across financial services, supply chains, government, healthcare, retail, and many other industries to transform business models. Different types of blockchain technologies have been devised for the cause.
Here are some critical types of blockchain:
Public Blockchain
Public Blockchain allows every interested individual to join it. Generally, public blockchains don’t need permission. The main idea behind it is that every new node is rewarded equally for performing their duties on an equal basis with other nodes. When it comes to mining, nodes that reach a new block get a specific amount of blockchain-specific tokens.
Private Blockchain
Private blockchains are deployed either within an organization or shared among a known group of participants. They can be limited to a predefined set of participants. In this case, no one else is permitted to access them or the data residing in them. They can be secured in a similar way to securing other integrated enterprise applications (e.g. firewalls, VPNs, etc).
Hybrid Blockchain
Both networks mentioned above have their drawbacks. Public networks usually offer slow transaction speed. Right now, Ethereum can handle only 30 transactions per second.
Private blockchains cope with this task much better. For example, Quorum processes over 100 transactions per second. However, such a performance is achieved at the cost of decentralization. Private networks aren’t accessible to everyone, thus only a few can benefit from their speed.
Consortium Blockchains
Multiple associations can share the responsibilities of sustaining a blockchain. These pre-selected organizations determine ways to submit transactions or access the data. A consortium blockchain is suitable for business when all participants need to be permissioned and have a shared responsibility for the blockchain.
Permissioned Blockchain Networks
Businesses setting up a private blockchain will generally set up a permissioned blockchain network. It is crucial to note that public blockchain networks can also be permissioned. This places limitations on people allowed to contribute to the network and what transactions. Participants need to obtain an invitation or permission to join.
What are Some Vital Blockchain Platforms?
Here are some of the blockchain platforms that can be selected based on their functionality and mechanism:
Ethereum
Designed as a general programming platform, Ethereum is an open-source and public blockchain-based distributed computing platform, emphasizing the functionality of smart contracts.
Ethereum uses a proof-of-work algorithm, called “Ethash” which requires more memory to make it difficult to mine using costly ASICs- specialized mining chips.
Building an application on Ethereum will allow companies to develop a decentralized public application with smart contracts.
EOS
The goal of the EOS platform is to propose smart contract capability, decentralized application hosting, and decentralized storage of the enterprise solutions which solves the scalability issues found in Blockchains such as Ethereum and Bitcoin, along with excluding all the fees incurred by the users.
Multichain
It is a platform that empowers blockchain app builders to develop and deploy private blockchain solutions to be used within or between multiple organizations.
IOTA
It is an open-source DLT based solution used for providing quicker and more secure payment services between connected IoT devices.
This platform uses directed acyclic graph (DAG) technology and offers unique characteristics.
Hyperledger Fabric
Hyperledger Fabric is an open-source blockchain platform suitable for building enterprise applications. It supports allocated ledger solutions on permissioned networks where all participants have known and authorized identities.
*Built on the modular architecture, Hyperledger Fabric has the potential to maximize the flexibility and resilience of blockchain applications. The pluggable architecture components include encryption or consensus.
How a Blockchain Development Process is used for Building a Blockchain-Based Solution?
The blockchain development process consists of the following stages:
""Identify the Problem and Goal"""
Before going deeper into the blockchain development process, it is essential to define a problem statement. At this step, companies should know that all problems a proposed solution is expected to solve.
Make sure investing time and efforts in the blockchain would benefit your business capabilities or not. You can also migrate your current application to the blockchain network without building it from scratch.
Identify a blockchain use-case for your application and ensure if your idea requires blockchain or not.
For example, if a food supplier is looking to build a blockchain-based supply chain application, they should understand the multiple use-cases of the application and how it is going to benefit their business and the consumer.
Once business requirements are identified, the next step in a blockchain-based solution is to choose the right blockchain platform for the project.
Identify the Suitable Blockchain Platform
You require a blockchain platform to build a decentralized application without having to create a blockchain from scratch. The blockchain platform a company requires depends on the consensus mechanism and the problems they are going to solve.
Blockchain Ideation
After identifying the problem and selecting the blockchain platform to build the application, it is the right time to brainstorm ideas and business requirements.
In this step of the blockchain development process, companies can use to analyze, formulate, and prioritize use cases for blockchain.
Decide what elements should be added as on-chain and off-chain business commodities. Prepare a roadmap of the product, i.e., when are they going to release alpha, beta, and ready-to-launch versions of the application.
The primary deliverable of the blockchain ideation is to formulate a conceptual workflow and blockchain model of the application.
It also allows deciding if the application needs to be built within the permission or permission-less network.
While formulating ideas, you also have to make decisions related to the front-end programming language, external database, and servers for an application.
After assembling various ideas, all that’s left is to prepare a proof-of-concept to demonstrate the viability of the product.
Developing a Proof-of-concept
A proof-of-concept is a way to illustrate the practical potential of a blockchain project and it can either be a hypothetical build-up or a prototype.
To create a PoC for a project, the following stages should be persuaded to show the project’s feasibility:
Theoretical Build-up
Every project requires theoretical cases so that the end-users can comprehend the viability and productivity of the product. Create proposals to clarify the parameters of the project.
Prototype
After completing the theoretical build-up and receiving feedback from every involved stakeholder, come up with a prototype containing sketches, information architecture, mock-ups, designs, and tested product.
Visual and Technical Designs
After planning an entire application at this stage, start creating UIs for each software component. Designs APIs that will be integrated with user interfaces to run an application at the back-end.
Development
Development is the significant phase of the blockchain development process, where users should be ready to build the blockchain app. In this specific stage, either develop or integrate APIs for particular use cases of the application. The application is built under multiple versions.
What are the best Blockchain App Development Tools?
Some of the best blockchain development tools are:
- Geth
- Remix IDE
- Mist
- GanacheCLI
- Solium
- EtherScripter
- Embark
- Metamask
- Blockchain Testnet
- Truffle
How can Blockchain Development Benefit a Business?
Blockchain technology has a wide variety of benefits, for both global enterprises and local communities. The most commonly cited benefits of a blockchain are trusted data coordination, attack resistance, shared IT infrastructure, tokenization, and built-in incentivization.
Blockchain has quickly risen to fame for its ability to create a vast, globally distributed ledger running on millions of devices, capable of recording anything of value.
Most people tend to associate blockchain with Bitcoin. But this is just one example of how blockchain technology can be utilized. And utilizing blockchain for a business carries several advantages. Some of them are as follow:
Decentralized
Blockchain doesn’t depend on an intrusive middle man. This means it requires no government currency and also no third parties for verification.
In addition, transactions are spread across thousands, or perhaps even millions of computers, although only a personal blockchain network can access it. Thanks to this decentralization, data is never lost.
Immutable
The data structure of a blockchain uses an append-only format. Ill-intentioned parties can not alter or delete data that has already been recorded. Naturally, this provides an extra layer of security.
Immutable blockchain only benefits the data structure based on append format. Unknowingly people cannot edit or delete already captured data.
Secure
Cryptography can be traced back to Greek origins implying the words hidden and secret. Even its modern denotation signifies a method of secure communication. Blockchain uses cryptography to encrypt the data stored within blocks, keeping everything extra secure.
Blocks can only be attached to the chain after going through a verification process that requires a consensus between ledger participants.
Transparent
As blockchain is a distributed ledger, everyone in the network has access to the same documentation. These digital copies all root back to the same digital information so it doesn’t require a dozen individual copies of sensitive information.
Efficient
Cost-efficiency is a basic tenet of blockchain technology. But blockchain is efficient in more than one way. When you trade using your traditional pen and paper, it slows down business operations.
Digital transactions are much faster, and therefore more efficient. At the same time, digital information makes it much easier to store and record important business assets, ensuring traceability.
How much does it Cost to Create a Blockchain Project?
The costs of Blockchain development vary extensively depending on the developers, project requirements, and type of blockchain development required.
When calculating the cost to build a blockchain-based platform or application, it is essential to consider the following scenarios:
Working with an In-house Team
Working with an in-house team of developers is quite expensive, but it can provide more control over blockchain development projects.
Hiring Freelancers
Hiring freelance blockchain developers could be less expensive but very risky. It is recommended to hire freelancers when the project is smaller but risk factors could increase when a project’s scope grows with time.
Hiring blockchain development companies for blockchain app development
Working with a Third-party Company
It could be a reasonable option if the project is enormous. Blockchain companies are experienced and can help you at every step of the development process.
The cost of blockchain app development also depends on the following factors:
- Type of Blockchain App you need
- The complexity of a Blockchain Project
- People involved in developing an app
- Third-Party Tool Subscription Costs
How long does it take to develop a Blockchain Project?
The time needed to formulate a blockchain project can vary extensively depending on the factors involved. Some of the main considerations include:
- The programming language used
- The number of features required.
Generally, blockchain development projects tend to take longer than traditional web or mobile app development projects. This is because the technology is still relatively new, and there is a lot of demand for blockchain developers.
Why Use Blockchain Technology for Business?
Business runs on information. The faster it’s received and the more accurate it is, the better. Blockchain is ideal for transmitting information because it provides reliable, shared and completely transparent information stored on an immutable ledger that can be accessed only by permission network members. A blockchain network can track orders, payments, accounts, production, and much more.
And because members share a single view of the truth, it displays all details of a transaction end to end, giving enterprises greater confidence, as well as new efficiencies and opportunities.
A blockchain is essentially a digital, distributed transaction ledger with identical copies maintained on each of the network’s members’ computers. All parties can review previous entries and record new ones.
First, there must be a consensus among the majority of the network. Then, any harmful action will be detected immediately.
As a result, startups and even established businesses can avoid paying a nominal fee for every other financial transaction. For companies that have to deal with unreputable customers, having a security system in place can be very useful if not necessary.
T
here are many situations where using blockchain can be handy, including copyright protection, digital voting, bounty programs, medical collections, and more.
he blockchain’s ability to record, store and move any kinds of assets with great ease, automation, and in a decentralized manner has stimulated interest from start-ups and the overall financial services industry which are envisioning possible use cases and applications in multiple areas.
Blockchain is considered to be extremely secure. This is because the data in a block cannot be modified; only subsequent blocks can be modified. To do this, there must be a consensus between the network majorities. Any malicious activity would be detected immediately.
Regardless, the technology produces some powerful benefits:
- Decentralization by eliminating single points of downfall
- Trust through mass consensus
- Transparency with public transactions
- Security through immutability
What Is a Blockchain Developer & How can they help in a Blockchain Project?
Blockchain developers are responsible for developing blockchains. As simple as it sounds, there are two types of blockchain developers: core blockchain developers and blockchain software developers.
Core Blockchain Developers
Core blockchain developers are responsible for the architecture of the blockchain system. This involves high-level decisions like the design of the blockchain and the consensus protocol. Fraction of such a task also includes handling security conventions.
Blockchain Software Developers
Blockchain software developers simply formulate blockchain applications. These developers are alternatively called decentralized application developers because they build decentralized apps or apps.
This role is not unlike that of a regular software developer. But app developers must be able to develop smart contracts using tools such as Truffle and Solidity. Dapp developers may also use languages correlated with mobile or web app development like React Native or Java.
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