Although initially introduced by a person or group pseudonym, Satoshi Nakamoto, in 2009 for the bitcoin cryptocurrency, blockchain has now found its way into many industry and organizations as an effective way to take advantage of the digital world.
What is Blockchain?
For a simple definition of this because we believe you must have seen a definition like “growing list of records, called blocks, which are linked using cryptography”. It is not as complex as it sounds.
Imagine a block (virtual) stuffed with transaction information such as date, time, and amount or volume of currency. Of course, there will be more than one person transacting at once, therefore, the different blocks are then linked together using a cryptography encryption which prevents any third party from reading or accessing what is in each block. That is why the blockchain is regarded as being decentralized.
Characteristic of Blockchain
The main characteristic of blockchain is its decentralized operation. The blockchain is politically, architecturally and logically decentralized. And censorship resistance, secured and can be widely used across different organizational sectors. The blocks transactions are validated by miners who are rewarded by crypto tokens.
Advantages of the Blockchain
Even before you decide on using any blockchain development platform which we will be discussing later, let us highlight some benefits of the blockchain technology.
Blockchain users can maintain and control the extent of their personal data exposed and this does not prevent them from identifying each other through the used pseudonyms.
The blockchain technical infrastructure provides better security compared to conventional financial systems software.
Immutability and Transparency
Transactions records in blockchain are unalterable. They are written and stored permanently.
No intermediary is required for the completion of blockchain technology. It is not regulated by any authority body. This makes the transaction easier and faster while anonymity is maintained.
The technology connects all race and ethnics since it is no man’s country fiat currency. Parties can easily transact directly with each other without the need for third-parties.
Blockchain Development Step-By-Step
As discussed at the beginning of this article, blockchain is now used for more purposes aside from the cryptocurrency transactions. However, regardless of your purpose for blockchain development, consider the following as a guide;
Why do you need a blockchain?
Identifying the main problem you hope bitcoin will help to solve is the first step towards a successful blockchain development. The problem most people faced at this stage is generalizing. For instance, as a financial institution, if you say you need a blockchain to improve your transaction, that is a generalization. You will need to declare what transaction, maybe for your customers who usually receive money from other countries or those who transact in the shipping industry.
Which “consensus model” is best for you?
Before a block is allowed to be added to the blockchain network, users are required to prove their authenticity before they are allowed to participate in the blockchain network. Proof of work which is based on solving a complex mathematical problem before a user can be allowed to join the network is the most popular “consensus model”; however, there are others like Federated, Proof of Elapsed Time, Proof of stake, Delegated Proof of Stake, Byzantine fault tolerant, and Round Robin.
Which among all of the platforms will be okay for your purpose?
Today, there are lots of blockchain platforms using different “consensus model” and programming languages. Your choice of a platform must be directly related to the purpose. For example;
• Bitcoin platform is majorly for crypto-currency transactions
• Ethereum platform is targeted at smart contracts and is designed for different decentralized applications (DApps)
• IOTA platform was designed specifically for the fee-less micro-transactions of the Internet of Things.
Also, check with your team to know the skilled personnel you have on-board to know which to settle for as more than one of the available platforms will be able to handle your purpose.
How will the design be?
Your blockchain can be hosted either on the cloud, in your preferred location (such as an office), or hybrid. For effective functioning of the technology, the design should suit the requirements and purpose of your project. And you may want to choose of the four blockchain solutions;
- Permission Less
- Used for purposes such as bitcoin and the other major cryptocurrencies ― anyone can become a miner of these platforms.
- These are used for governmental operations like tax collection and voting systems.
- Specially used for internal contract management in sensitive industries such as hospitals.
- It is mostly by banks for sharing Know Your Customers (KYC) information.
What are the components of a blockchain App?
You have to be meticulous here because any mistake during the configuration of a blockchain application may be impossible to be corrected. It is important to get an expert to handle this stage of your blockchain development if there is none on your. Some of the major components that you may need to incorporated include asset allocation, reallocation strategy, consensus model, address formats and signatures.
Why would you need an API?
Some blockchain platforms offer users pre-built APIs but to better suit your purpose, you may need to create most of the APIs you will be needing for functions like storage and back up; executing smart contracts; and generating key pairs and addresses.
Why do you need a user-friendly interface?
Everything is almost set, but the blockchain still needs an interface to interact with users. Ensure you use an interface that users can easily navigate the website with.
Should you launch directly?
Just like any other programmed application, your blockchain application may encounter some issues such as not effectively handling a large data and so on. Test run your new blockchain application to ensure everything is functioning as planned. You may make this a behind the scene project while delaying the launch of your newly developed blockchain app.
Use of Blockchain Development in the real world
Since the discovery of the capability of blockchain to store data other than transactions information, many companies have been employing its use in their business. In a research survey conducted by Deloitte, of the 1000 companies in seven countries that participated in the survey, about 40% of them said they are ready to invest at least $5 million in blockchain while 34% of them are already using blockchain in their business.