Blockchain has recently gained in popularity among developers and companies looking to increase visibility, guarantee security and streamline operations. Unfortunately, however, its concept can sometimes get misconstrued with many misinterpreting its practical advantages, applications or implementation needs.
In this article, we'll take an in-depth look at blockchain technology's definition, its benefits, how to develop blockchain applications and more.
What Is Blockchain Development?
Blockchain development refers to the process of creating distributed ledger technology (DLT) capable of securely recording transactions and tracking assets within a network - be they nonphysical assets like copyrights or tangible ones like money or real estate - without alteration from outside parties. DLT is shared, unchanging technology.
Due to its fast, accurate, and secure information sharing features, blockchain development can benefit many industries. Permissioned network members of blockchain networks enjoy transparent delivery and storage irrespective of what data is being tracked - such as orders, accounts, payments, production etc. Blockchain development offers great potential benefits but first you must understand its features to take full advantage of them.
What Is Blockchain?
Blockchains can be described as fixed digital ledgers used in distributed, peer-to-peer computer networks to record transactions involving both tangible and intangible assets through cryptography. Each server connected to this network, known as nodes, records, copies and stores the transactions - also called blocks - into this distributed ledger system.
Blockchains are decentralized databases run by multiple parties; in contrast to typical databases which store records centrally (i.e., at one location); each node in the network receives their own copy of the ledger via DLT technology, with participants adding new copies as nodes are added and discrepancies detected between different copies created by participants compared against copies the technology has generated automatically; data stored on blockchain is almost impenetrable due to real-time updates providing members access to one authoritative source of truth for every detail on record accessed.
How Blockchain Works
Blockchain gives businesses a way to manage records without duplicate records or falsified data being created or changed over time. Here's how it works:
- Create a block: Every node on a network must first approve of a transaction before recording all related data into blocks for approval (you can include names, locations, times and costs in this process.). When this has happened successfully, transactions may then proceed smoothly with approval at each node in turn and transactions approved as planned (you may select any combination of names, locations, times costs details that should be recorded for your block.)
- Link blocks: Each database block can only store so much data at one time; when full, another one is created immediately afterwards and linked through hash codes; updated whenever transactions change, making tampering easy to spot and creating an asset chain that demonstrates its movement both physically and through its ownership relationships.
- Add to the chain: To form a blockchain, all transactions must first be aggregated collectively using an entirely predefined process. Once blocks have been added to the chain using this consensus method, their legitimacy increases further enhancing legitimacy for every member of the network and providing security from fraudulent activity in transaction ledger.
History Of Blockchain: Not Just For Bitcoin
Understanding the distinction between blockchain and Bitcoin is of vital importance, since people often confuse these two terms when discussing its various applications and uses. While Bitcoin was initially created using this technology, its scope goes far beyond cryptocurrency use alone.
Blockchain technology has quickly become one of the go-to solutions for tracking assets other than just cryptocurrency transactions, though its strengths lie primarily with that. Businesses soon recognized this and began investing in it as an efficient method to reduce transaction costs, improve transparency and streamline operations; currently this method of tracking assets can be seen across industries to boost bottom lines.
Blockchain Use Cases
Blockchain development can give businesses an advantage and improve operational efficiencies across an array of industries, including:
- Healthcare: Patient Data Security; Enhance Trust in clinical research processes.
- Real estate: Accurate land and property records.
- Finance: Reduce international payments, taxes, and intermediary costs; prevent money laundering
- Voting: Avoid duplicate voting to ensure accuracy
- Supply chain: Accurate asset tracking from suppliers to clients
Benefits Of Implementing Blockchain Solutions
Enterprise blockchain solutions offer numerous advantages to both businesses and individual developers working for them, including:
- Increased transparency: Network transactions require validation as they occur, meaning all involved parties must agree that hashes and associated data are correct before being considered legitimate transactions. All network users can then view a complete history of every transaction on the distributed ledger; any modifications made to one record impact all subsequent records as well.
- Reduced risk of fraud: Transaction history for any asset traded or sold can become complex for businesses to track, especially if that asset moves frequently between locations or transfers. With blockchain-stored audit trails providing instantaneous insight into an asset's history immutability protecting past transactions while verifying legitimacy - everything becomes instantly available as part of an audit trail providing insight into past dealings of an asset.
- Increased speed and efficiency: Are You Still Handling Transactional Records Manually, such as Paper Documents, Spreadsheets or Third-Party Systems)? If this describes you then it could be costing your company time that could otherwise be allocated more effectively elsewhere. Traditional methods tend to lead to errors and require laborious repetition in order to guarantee precision; but by automating and streamlining this procedure with blockchain it ensures all parties operate from an up-to-date ledger, eliminating workflow bottlenecks.
- Decreased costs: Reduce wasteful spending can improve your bottom line and enable faster expansion. Blockchain eliminates the need for additional middlemen while remaining accurate and trustworthy - network members simply confirm everything, saving time and energy spent reviewing trade documents.
Read More: Unlocking Business Success: Top 10 Advantages Of Blockchain Technology
Blockchain Development Challenges
As blockchain technologies advance and their ecosystem expands and new use cases emerge, blockchain developers must address three primary concerns for successful operation - security, scalability and decentralization - without incurring unnecessary tradeoffs in terms of security, scalability or decentralization. This has come to be known as "The Trilemma"; developers must determine ways of solving all three without resorting to tradeoffs as quickly as possible.
Decentralization
One of the key incentives for industries to adopt blockchain technology is decentralization. Blockchain enables individuals and financial services providers alike to buy and store cryptocurrencies without giving banks full control of their assets. Instead of being validated solely through one node, transactions instead reach consensus between multiple nodes before being finalized - meaning transactions once confirmed cannot be modified in any way after being validated by all. Decentralized systems do however come at a price; consensus takes longer when there are multiple confirmations; therefore blockchain developers face the task of speeding this up accordingly.
Scalability
An essential factor for blockchain's widespread adoption lies in its capacity to keep pace with rising transactional volume as demand surges, while keeping operations running according to plan and protecting against cyber attacks. Once again speed may become an issue when block sizes increase.
Bitcoin initially set its block sizes to one megabyte to reduce cyberattack risk; however, an infinite number of transactions may be recorded with each coin that further expands a block beyond any set sizes or restrictions - potentially slowing processing speed as more blocks form than intended. Although debate over block size initially centered around Bitcoin specifically, its effects will soon extend across blockchain applications as developers consider whether increasing block sizes without impacting speed may affect them all.
Security
Bitcoin initially limited block sizes to one megabyte to reduce risk from cyberattacks; each coin still can record transactions and expand blocks accordingly. Processing can become even slower if blocks outgrow any size restrictions on them. Though Bitcoin inspired the debate surrounding block size, all blockchain applications will be affected as developers decide whether to increase it without compromising speed.
Although security breaches in blockchains are rare, hackers have managed to exploit known vulnerabilities within its infrastructure in an effort to achieve gainful entry and compromise it for personal gain. Developers need to be capable of building blockchain networks that not only add business value, but also guarantee complete security. While developing a blockchain solution presents its own set of unique challenges, remembering its infancy gives way to continuous advancement - providing developers with ample room to improve it over time and be part of its wider growth story.
How to Recognize When to Implement Blockchain Development
Although blockchain holds many benefits for platforms and organizations alike, not every organization may find blockchain development the answer they've been searching for. Ahead of making your decision about it being beneficial or otherwise it would be wise to ask these key questions:
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Do you need a place to store data?: If this is your situation, blockchain may not need to be implemented immediately. Assess what amount of information needs storing before considering blockchain as a potential solution; small businesses might get by just fine with local storage while for enterprise operations requiring large data volumes stored across multiple databases and access for numerous users, using blockchain can offer fully transparent ledgers which make working together simpler than ever.
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Does your data need to be frequently updated and shared?: Blockchain development offers an efficient solution for automating manual and paper-based data maintenance processes, while simultaneously protecting against alteration. If your company relies heavily on historical information that's constantly shifting, a solution that automates this procedure, allows multiple entries from authorized members simultaneously and prevents data alterations could be essential.
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Is your business suffering from slow transactional speeds?: Blockchain can remove barriers that impede certain workflows, but without an accelerator it usually doesn't allow for faster transaction speeds. A blockchain solution should make sense if application security is your top concern and transaction speed doesn't matter as much.
- Do you need third-party authorization?: Certain businesses need an intermediary for data control and authentication; blockchain wouldn't make sense in that context; but blockchain could offer complete transparency and consensus validation to companies without outside solutions; in addition, cutting expenses and wait times associated with conducting transactions through intermediaries could reduce expenses significantly.
Steps to Develop a Blockchain Solution from Scratch
Development of a blockchain solution takes significant investment of time and research, with success ultimately dependent on your specific business needs and goals. But you will need to follow some essential steps for development regardless of their specificity.
Identify a Problem to Solve
Be wary of becoming overwhelmed with all of the advantages blockchain solutions provide; remember there isn't a one-size-fits-all answer available to you. Set specific goals, assess overall business requirements, and consider various high-level development use cases as you make your decision.
Writing down all the issues you want to resolve using blockchain solutions can be helpful in setting expectations and prioritizing solutions. Next, decide whether it would be more advantageous to create an entirely new application from scratch or migrate your current solution onto this new blockchain technology platform.
Draft Your Business Requirements
After this step is completed, creating your business requirements will become essential in making sure nothing is missed. Consider all technologies necessary for an ecosystem - both off-chain and on-chain technologies alike - before creating your product roadmap with more specific details that help stay within schedule and understand resources needed.
Identify a Consensus Mechanism
Discovering and selecting an effective consensus mechanism - an agreement-building and trust-building mechanism used within decentralized computer networks - should be the next step. You have various choices available to you but some widely utilized ones currently are:
- Evidence of work
- Evidence of Stake
- Byzantine fault-accepting
- Consensus based on deposits
- Evidence of passing time
Your individual business goals and needs should have a large effect on choosing an effective consensus mechanism; take time to review each option available before selecting one that works for your situation.
Choose the Best Blockchain Platform
Your platform selection for your blockchain app development team will have an immense effect on their skill set requirements and timeline for completion. As the process requires extensive research and time-intensive implementation, make sure it closely meets the specific requirements of your business. When considering different solutions you might consider solving, take note of its costs, consensus processes, developer requirements and expected timeline when considering options.
Design Your Blockchain Nodes
Establishing which programming languages to utilize, the type of blockchain network required (permissioned versus permissionless), as well as any other factors influencing development is of great significance for business success. When meeting business requirements, do you require private, public or hybrid solutions with blockchain nodes operating locally, in the cloud, both or neither; what operating system your application will run on (Windows, Linux Red Hat Ubuntu CentOS etc); this step involves multiple moving parts so make sure to thoroughly investigate all your available choices while considering goals, resources available to you, financial constraints etc when making these important decisions.
Plan Your Blockchain Configuration
For most and best blockchain platforms, it is necessary to consider several configuration components - these could include:
- Permissions
- Asset issuance
- Asset re-issuance
- Atomic exchanges
- Key management
Remember that these components may require tweaks during runtime - however, for optimal development results and to ensure smooth operations. Planning in advance is always strongly encouraged to ensure successful outcomes.
Build Your APIs
Prefabricated application programming interfaces (APIs) may be available on some platforms but not others; therefore, depending on your requirements you may have to create custom APIs instead. These might include:
- Conduct of audit-related functions.
- Data authentication using digital signatures and hashes
- Data Storage and Retrieval System.
- Lifecycle management of assets
- Smart contracts
Design The User Interface
Once your application has been planned out, the next step in designing its user interface (UI) for each software component should be creating its UIs. Backend UIs will integrate with APIs you have designed; both technical and visual designs have an effect on its architecture and overall appearance respectively.
Choose An Accelerator To Optimize Your Blockchain Application
How can you know that your blockchain app will successfully deploy once built? Investing in hardware accelerators to amplify performance, increase flexibility and utilize power efficiently are vital when creating such complex apps as blockchains.
Accelerators also assist in optimizing various elements of blockchain platforms such as data storage, governance and transaction validation. By spreading transaction loads across different components to increase speed and output, accelerators play an essential part in saving both time and space.
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Conclusion
With all the information and illustrations included herein, we hope our guide on developing blockchain apps has proven useful to you. With all this advice in hand, hopefully you have taken steps toward seeking out a blockchain app development company; haven't? Reach out so that we can learn about your idea and concept.
