Should you be observing how technology is influencing the startup scene, you may have seen a lot of excitement around Blockchain. Diverse industrial sectors can benefit from Blockchain's innovative features, which include decentralization, immutability, transparency, and automation. This will spur the development of numerous use cases that illustrate the possible benefits of implementing blockchain technology.
Although cryptocurrency platforms like Bitcoin and Ethereum have been around for a while, blockchain technology is still in its infancy and has not yet gained any traction in the mainstream software sector. We have attempted to enumerate the top factors to take into account when integrating a blockchain into a product, having worked on Blockchain implementation for companies across a variety of industries.
Things To Know Before Thinking About Integrating Blockchain Technology
Before you include blockchain into your workflow, make sure you understand these three points.
Recognize How Blockchain Technology Operates
Let's say you are an auto salesperson and you would want to compile a list of all the automobiles you have sold, together with details like the model, price, and date of sale. A spreadsheet would be made and entered into your blockchain-capable program.
The file that you submitted has now been included in a digital ledger. In this ledger, each block of data is encrypted and added to a chain of related data. Additionally, it is immediately duplicated by the system and shared with every other peer on the network. Because there is no central authority over the chain and these peers may only modify a chain of encrypted data sequentially, a blockchain protocol verifies alterations against the versions held by other nodes in the network. A majority of the nodes must confirm the modifications in order for them to be accepted.
This implies that when you make changes to the file, it generates a record that exists separately from your copy of the ledger and compares it on a regular basis with the copies of the ledger that are present on all other servers and network nodes. We refer to this as a consensus. The blockchain protocols will prevent alterations if someone outside the network tries to make changes without your consent. Furthermore, you can always track a change back to the exact instant it was introduced and understand why the consensus approved it, as all updates are added sequentially.
Swider stated, "Data lives in multiple places." "You might send a copy to a SharePoint list; there are copies in a blockchain and a SQL database. However, the version of truth found on the blockchain."
Determine Whether This Technology Is Appropriate For You
Though it won't benefit everyone, blockchain integration has more uses than you may imagine. Blockchain and CMS may be integrated for a variety of purposes, such as controlling digital music rights and verifying news.
Here are a few examples of the applications for blockchain technology:
- sharing and modification of documents;
- inventory control in supply chains;
- record-keeping and contract transfers;
- distribution and protection of copyright, royalties, and licenses;
- content archiving and backup and;
- monitoring the distribution of products.
Blockchain is helpful as a development environment since it can execute code, including JavaScript. While many of these uses are still in their early stages, blockchain is making significant progress in the fields of finance, healthcare, and even electoral processes.
"All tech goes through a hype curve," Swider said. "We're just now coming out of that."
Collaborate With Others
Blockchain technology is meant to be collaborative. For instance, you can set up a consortium network if you are a business owner in Boston and would like to exchange data with firms who are partners elsewhere. This connects users to a network so they may exchange and modify information together using a range of third-party applications. A private blockchain system allows several partners to view and change it, and you, as the ledger owner, may grant them different levels of access.
Unfortunately, this means that this system is not as safe as a public blockchain since specific nodes with high permissions can make changes without the need for consensus. This implies that there are more places where the ledger might be changed without the change being overruled by the majority. Every node has the same permissions in a public blockchain system, like Ethereum or Bitcoin, and every transaction is visible to the world. There is virtually little possibility of someone hacking or changing the record since, unlike with a private blockchain, there is no central database to overturn the consensus.
A public blockchain ledger may be used by an online real estate listing business, while a government agency would want to transmit sensitive material via a closed-network blockchain. Blockchain is quite helpful for workload procedures that span many clouds. Given that blockchain is open source and built to function on basic coding languages like JavaScript, you can still work together on content creation with someone using, say, Oracle Blockchain.
Read More: Navigating the Present: Understanding the Blockchain Application Development Process
Some Of Other Top Considerations Mentioned Below
On-Chain Or Off-Chain
Knowing whether to go off-chain and when to go on-chain is one of the most important architectural decisions made while developing Blockchain-based products. This is reserved for situations in which transaction data and business validation logic are essential.
Due to data replication throughout the Blockchain network, the main limitation is network latency. As the amount of data replication increases, so does the degree of lag. Ethereum charges a fair cost to store data on the chain for the same reason.
Some general guidelines-
- Data that must be auditable or directly necessary for transaction validation ought to be kept on-chain. Off-chain storage of referential data is preferable.
- You can create transactions off-chain and update just the first and final state on the chain if eventual consistency is acceptable. By doing this, throughput will rise overall while requiring less network resources.
Public Or Private Permissioned
The scope and access of the Blockchain itself, which may be either private and restricted or open and permission-less, is another crucial choice. Public blockchains are helpful in scenarios when users are equal and anonymous. To guarantee that no one has the power to alter the rules, public chains need the support of the community surrounding them. The network's rules cannot be altered by a single user; instead, they must be driven by the community. On the other hand, a high number of nodes might restrict the transactions' throughput. It is preferable to have some form of incentive to do efficient processing.
Blockchain platforms with permissions regulate who has access to write and read on the network. They are scalable in contrast to public chains. They work well in situations where regulations and regulated governance are crucial.
Facebook's worldwide payment system, Libra, is an example of a public permissionless chain that anybody may use for value exchange. However, a viable use case for private permissioned Blockchain is an insurance claim processing platform. It is imperative that this classification be developed from the very beginning. This is due to the fact that distinct forms of consensus and identity management solutions are needed for each category.
Levels Of Security
Among the most important characteristics of a secure distributed system are data consistency, resistance to double-spending attacks, and tamper-resistance. Blockchain technology's cryptographic principles allow us to accomplish the first two. We require an adequate consensus method to ensure consistency throughout the system.
All nodes in public-facing systems are trustless, with no node having more privileges than any other and open access to the network. Security is crucial in these situations to thwart any malevolent nodes. Notwithstanding the excessive use of network resources and the restrictions on transaction throughput, the Blockchain with POW is superior.
Multiple parties communicate and share information via systems that resemble consortiums. Even if the identities of the nodes in these systems are publicly known, only a small number of nodes can be completely trusted to process transactions, hence security is needed against these semi-trusted nodes as well as outside users who aren't actively using the network. In addition to giving the system the necessary security features, a blockchain with the right governance model and consensus will boost operational efficiency due to high levels of trust.
A system of this kind can offer the necessary efficiency and security in a document processing application, for instance, when papers are shared between several parties for approval.
Data Privacy Needs
Privacy enters the picture when data stored on Blockchain or transactions need to be protected due to compliance requirements or secrecy. For example, transactions involving financial trades and applications based on medical records could need to be concealed, with data visibility restricted to specific parties. Transaction trend graphs have the potential to expose a user's actual identity, even in the case of bitcoin. These users could wish to conceal the transaction's recipient or its total value.
To support such, strategies like zero-knowledge proof and transaction mixing have been suggested. Sometimes, real-world circumstances differ from those in which these approaches may be applied directly, necessitating the creation of a new protocol based on an existing one.
Physical To Digital World Transition
Using the Blockchain, we can convert tangible assets like land registrations, written contracts, and fiat money into digital assets. It will then be simpler to take advantage of these papers' decentralization. But doing so necessitates a fundamental faith in the system. Either a tangible contract that is non repudiable in court between the parties, or a guarantee from a reliable third party, would be required.
This reliable third party is a bank in the case of apps that use fiat cash. However, to guarantee simple Blockchain integration, pick a bank with a strong technological foundation.
Taking GDPR (Data Protection) Into Account While Implementing Blockchain
A user must be able to exercise his or her right to the deletion of personal data and to selectively expose it to others in order to comply with GDPR regulations. Since there is no way to remove data from the Blockchain, we should either store this kind of private information off-chain, on centralized servers, or encrypt all of the user's records so that only they can read them.
Simpleness Of Development And Deployment For Using Blockchain Technology
Not to mention, we need tools that make the development and deployment procedures easier. Better smart contract frameworks lead to less errors and more confidence. Upgrading the product across all validator nodes requires a strong container orchestration solution, such as Kubernetes.
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Conclusion
You must carefully examine the factors listed above before implementing blockchain technology as they have the power to make or ruin your efforts. Assuming all the teething issues are resolved and the hype is avoided, blockchain technology has the potential to completely transform a number of sectors. Cheers to blockchaining.
