A Complete Guide to Blockchain Development
Blockchain technology is well known in today’s world. It is proposed for different business applications besides financial transactions. It improves security and speeds up the exchange of information while ensuring transparency.
Here, we have created a complete guide, which will help you build a blockchain based application. Let’s learn everything you would need to understand about Blockchain Development.
Table of Contents
- How to develop Blockchain from scratch?
- What value does Blockchain add to your platform?
- When to use blockchain for your startup or existing platform?
- How much does it cost to build a blockchain-based platform?
- What is the blockchain development process?
- What is the best app development tools?
- How long blockchain development takes?
- List of top blockchain development companies
Let’s discuss each topic in chronological order.
How to develop blockchain from scratch?
Before we start, remember that blockchain is an immutable chain of records called ‘blocks’ that contains:
Blocks are chained together with hashes. If you want to understand hashes properly, read our article on blockchain basics.
Developing a blockchain from scratch and its implementation can take months or years to complete because it requires thorough research. It takes a lot of consideration and time to discover and implement an idea successfully.
However, many other options allow us to build blockchain protocols in a short period.
You can find various open-source blockchains available in the market that simplify the development process with forking.
Let’s consider the example of Bitshares blockchain that can be used to develop blockchain platforms or applications.
Developing a Blockchain App or Platform using Bitshares Blockchain
With industrial-grade technology, Bitshares blockchain focuses on businesses, individuals, or organizations with a free-market economy and a robust ecosystem.
Some features of Bitshares Blockchain that make it an ideal platform for the development of blockchain solutions are:
- High Processing Speed
- Dynamic Account Permissions
- Self Sustaining
- High-Level Security
- Minimal Fees
Let’s discuss these features.
- Processing Speed
Blocks are confirmed rapidly, and transactions are added to the blockchain within 1.5 seconds to 3 seconds.
- Dynamic Account Permissions
- management for the corporate environment
- control of wallets via a weighted combination of account approvals.
Bitshares ensures the blockchain covers costs to keep going with no maturity date, as it is backed by an ecosystem of dApps to self-fund its native token BTS.
It is impossible to hack the Delegated Proof-of-Stake (DPoS) protocol as it involves taking out many global, active and trusted delegates.
- Minimal Fees
Though Bitshares also charges a fee like other blockchains, it is comparatively lower than average and offers 80% vesting cashback to lifetime members.
Bitshares allows you to create your own cryptocurrency and blockchain platform, just like EOS, Corda, Stellar, or Tron.
You may simply fork any open-source blockchain to build your own blockchain platform for your specific enterprise requirements.
Building a blockchain from scratch takes a considerable amount of time. Also, you need to prove that the algorithm/protocol you have discovered can bring transformation to the existing ecosystem.
Now that you understand the process of building a blockchain from scratch, let’s take a look at how it adds value to your platform.
What value does Blockchain add to your platform?
Innovators are discovering ways to implement blockchain across financial services, supply chain, government, healthcare, retail, and many other industries to transform business models. Blockchain adds value to businesses by offering:
- More transparency
- Enhanced traceability
- Increased speed
- Reduced costs
Let’s learn more about it.
- More Transparency
The history of transactions is becoming more transparent with the implementation of blockchain. Since blockchain is a distributed ledger, all members of the network share the same updated ledger. A consensus in the network validates the ledger, which implies that everyone must agree on it.
Changing a single record would result in the modification of all subsequent records. Thus, the data saved on the blockchain is:
- more secure
- available only to members with permissioned access
- Enhanced traceability
If your company manages products which are traded via a complicated supply chain, you would understand how difficult it can be to track an item from its origin. When the supply of goods from one place to another is recorded on the blockchain, you get a complete audit trail representing where an asset came from and tracks each stop that it covers on the journey.
Previous records saved on the blockchain can help to verify the authenticity of products and protect from frauds.
- Increased Speed
Currently, the traditional processes are:
- using third-party intermediaries to verify the authenticity
- prone to errors
You can execute transactions fastly and securely by automating and simplifying business processes with blockchain. As a single digital ledger shared with the network participants can be used for record-keeping, you don’t need to manage multiple ledgers. Everyone within the network can access the same information at all times, which results in a quick settlement.
- Reduced Costs
Reducing costs is a priority for most businesses. Using blockchain, you don’t need intermediaries or third-parties to establish trust as the network participants validate everything on the network through a consensus. You won’t have to review documentation to perform the trade because everyone will have access to an immutable version.
While learning about how blockchain can add value to your business, it is also essential to know about when you should use it. Let’s take a look at it.
When to use blockchain for your Startup or existing Platform?
Following are some of the questions that will help you determine if integrating blockchain into your existing solution is a good idea:
Do you want to store data?
You don’t need a database if your business solution does not require a lot of data to be stored. Therefore, blockchain is of no use in that case. If you have an application that needs to manage massive data, blockchain can be used to manage a single shared distributed ledger. Instead of maintaining multiple databases, blockchain technology will allow you to have a single transparent view of the updated ledger, shared with all network nodes.
Is the data dynamic with an auditable history?
Though paper-based documents are difficult to counterfeit, they have limited permanence. If transactions need to be updated and shared frequently, maintaining them on papers can be a time-consuming process. If the data and its history are crucial for your business, you might require a blockchain solution that allows multiple parties to write entries into an incorruptible system.
Is the speed of the transaction vital for you?
Does your database need high-performance millisecond transactions? If yes, you should stick to the centralized system for managing the records. On the other hand, even though blockchain databases are slow, they are far more secure than the centralized system. If an application’s security is more important than its speed, you should look for a blockchain solution.
Should a central authority control your data?
There could be many reasons why a third party should handle some authorizations and authentications, as it can sometimes be desirable. But, third-party authorities can always create trust issues due to a lack of transparency.
On the other hand, multiple parties manage blockchain data, and information is validated via an agreed-upon consensus algorithm. If you have privacy concerns, it can become possible to provide read-only and write-only permissions to a specific party using blockchain. No dependency on a central authority will reduce:
- high fees
Do you require a trustless environment?
Trusting other parties is essential when doing business, especially in a partnership situation. We have to trust banks to keep our money secure and business associates to maintain agreements. What if the trust gets broken? Unfortunately, trust is being violated every day, and it’s a significant issue.
Now, the question is, how would you know when to use blockchain. Though blockchain is a trustless environment, parties can work simultaneously without worrying as they have an updated ledger at all times. It uses various consensus algorithms to validate all transactions without giving more attention to any particular party. Hence, it brings fairness to the system.
Do you need a little change or no change in rules on the system?
Everyone considers blockchain as an immutable system as it does not allow you to change rules on the system once they are written.
But blockchain might not be immutable always as it could have a chance of 51% attack. If a community of miners can control more than 50% of the network, they can control the system. They can stop other people’s transactions and double spend the amount. The risk of the 51% attack is prominent for the Proof of Work algorithm, but other mechanisms ensure a secure environment.
If the answer to 4 out of 6 questions is “Yes,” you may need a blockchain solution for your business.
How much does it cost to build a blockchain based platform?
When estimating the cost to build a blockchain-based platform or application, you need to consider the following scenarios:
- Developing a blockchain app with an in-house team
- Hiring freelancers for blockchain app development
- Hiring blockchain development companies for blockchain app development
Here is our analysis of the estimated cost of blockchain development for a minimum viable product when using different development resources.
|Beginner||$500,000||$30,000 to $50,000||$150,000 to $250,000|
|Experts||$2000,000||$50,000 to $90,000||$250,000 to $500,000|
Working with an in-house team of developers is quite expensive, but it can provide you more control over blockchain development. However, you should take this path if software development is your core business. On the other hand, hiring freelance blockchain developers could be less expensive but very risky. It is recommended to hire freelancers when the project is small, but risk factors could increase when a project’s scope grows with time.
Working with a third-party company could be a viable option if your project is enormous. Blockchain companies are experienced and can help you at every step of the development process. When compared to an in-house development team, the cost of blockchain companies is lower.
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
- Project Management Tools
- Third-Party Tool Subscription Costs
Type of Blockchain App you require
Every business requires a digital solution to run their business operations efficiently. Building a blockchain app can build trust and offer transparency while removing additional intermediaries.
Before implementing blockchain technology and estimating its cost, it is essential to understand the type of blockchain app you need. Whether you need a permissioned blockchain app or a permissionless blockchain app, you need to consider which application can suit your business needs.
Also, the cost of a blockchain application varies from industry to industry. For example, you may need an app for supply chain management, healthcare, real estate, education, and many other business domains. The cost of an app will depend on the complexity of the project.
The complexity of a Blockchain Project
The complexity of a blockchain project depends on the issues that an application wants to solve.
Here are some examples of blockchain projects based on the complexity level:
- Low Complexity Blockchain Apps: Payment apps, Smart Contracts Development App
- Medium Complexity Blockchain Apps: dApps developed on blockchain platforms, Semi-decentralized apps, Hybrid blockchain apps, Blockchain dApps
- High Complexity Blockchain Apps: Development of Blockchain platform from scratch, A complete decentralized network
People involved in developing an app
The cost of blockchain app development also depends on the number of resources required to develop an application. Salaries of blockchain experts are the significant expenses you should not miss when calculating the cost to build an app.
Since blockchain is still in its nascent stages, you won’t find the right blockchain talent easily. While investing in blockchain developers, ensure you have hired the best ones and added their salaries to the total expense.
Project Management Methodology
Companies might use agile methodology tools such as Jira, Confluence, and Trello to manage blockchain projects. They use such tools to test an app, track timelines, and deliverables. Therefore, the price of project management tools is also added to the cost of blockchain implementation.
Third-party Subscription Tools
Your blockchain app might require a subscription to third-party subscription tools such as bug tracking tools, notification services, amazon web services, software monitoring services, and data analytics tools. The cost of subscription tools also contributes to the cost of blockchain app development.
The blockchain development process consists of the following six stages:
- Identify the Goal
- Choose the right Blockchain Platform
- Brainstorming and Blockchain Ideation
- Proof of Concept
- Visual and Technical Designs
Let’s discuss these stages in detail.
In this section, we have explained the process of building a blockchain-based application. Let’s understand how to start with blockchain app development and what steps are required to develop an app successfully.
1. Identify problems you want to solve with blockchain
First of all, it is essential to develop a problem statement and understand all of the issues you want to solve with a proposed solution. Ensure that the blockchain solution will benefit your business abilities. Analyze whether you need to migrate your current solution to the blockchain, or you require a new application to be developed from scratch.
For example, suppose you are a healthcare provider who wants to develop a blockchain-based health record exchange app. In that case, you should know various use cases of the applications and what benefits it will offer to users.
Once you decide that you need a blockchain solution for your business operations, the next step is to select the right blockchain platform and blockchain development tools for your project.
2. Choose the right blockchain platform
As mentioned above in the article, building a blockchain from scratch requires thorough research and takes months to years to develop it successfully. Therefore, you should build a blockchain app on top of a blockchain platform that meets your business requirements. You should identify the right blockchain platform for your application based on the factors like consensus mechanism and problems you want to solve. For example, you can build an Ethereum-based application to develop a decentralized public application with smart contracts. When the blockchain platform is identified, you must do brainstorming and understand the exact business needs.
3. Brainstorming and blockchain ideation
Once you identify the blockchain platform for developing a blockchain application, you should focus on drafting business requirements and brainstorming ideas. Find what technology components should be added as off-chain or on-chain entities on the blockchain ecosystem. Create a roadmap of the product that will help you to build an application within a decided deadline. You should come up with a blockchain model and conceptual workflow of the blockchain application.
Also, decide if the application needs to be developed on a permissioned or permissionless blockchain network. It would help if you also decided on front-end programming languages to be used, servers, and external databases in this stage.
4. Doing a Proof-of-Concept
A proof of concept is done to represent the practical applicability of a blockchain project. It can be either a design prototype or a theoretical build-up. In Theoretical Build-up, each project requires theoretical cases so that users could understand the applicability and viability of the product. Proposals can be created to explain the project’s parameter. After creating theoretical build-up and receiving feedback, a prototype is designed, which includes:
- tested product
- information architecture
When the client approves the PoC, the next step is to prepare technical and visual designs for the application.
5. Visual and Technical Designs
Since you have planned 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. Visual designs are created to give a look and feel to the application, whereas technical designs represent the application’s technology architecture.
Once the admin consoles and user interfaces are designed, the application gets ready for development.
Development is the significant phase of the blockchain development process, where you should be ready to build the blockchain app. In this specific stage, you either have to develop or integrate APIs for particular use cases of the application. The application is built under multiple versions.
Firstly, an application that does not undergo formal testing is a pre-alpha version of the app.
Once the client approves it, the application moves to the next stage, i.e., alpha, where the developers test the software with white-box techniques. But, the software might not comprise all the features at this stage.
After the alpha version is released, the app is prepared for the beta version. During Beta Phase, the software application has the complete feature set but with some unknown bugs. Developers share the beta version with a particular group of people outside the organization to test its functionality.
Once the beta version is approved and tested, the application moves to the Release Candidate version, which is an advanced beta version that is ready to be a final application and can be launched.
After thorough testing, the application moves to the production phase and gets ready for delivery.
Before an app goes live, you should deploy it on the test network to carefully test its functionalities.
When deploying an application, administrators can also manage which versions of the app need to be deployed to various resources with provisioning.
Once an application is provisioned, it needs to be hosted on the main chain. If your blockchain app is a hybrid solution, i.e., it contains both off-chain and on-chain business entities, you need to deploy it on the cloud server and app store/play store. The application should be able to upgrade according to any new business needs and prioritization.
For instance, if you need to upgrade the smart contract, later on, you should be able to deploy the new contracts without any difficulty.
Developing and deploying an app does not mean you are done. Instead, a software application needs to be maintained post-development to ensure that it works with all types of upgrades in the future.
What are the best Blockchain App Development Tools?
Some of the best blockchain development tools are:
- Remix IDE
- Blockchain Testnet
Let’s discuss them.
An Ethereum client, Geth, is used to run Ethereum nodes in the Go programming language. Using Geth, users can mine Ethers, create smart contracts and run them on EVM, explore the block history and send tokens between addresses. Geth can be downloaded and installed on Linux, Windows and Mac. It supports two types of installations, Scripted and Binary.
Once you start using the Geth, you either have an option to create your own blockchain based on the provided settings or connect to the existing blockchain. In case you don’t set any default values, it will automatically connect you to the Ethereum’s mainnet.
2. Remix IDE
Remix IDE is a compiler used for small contracts. It is a browser-based tool used to create and deploy smart contracts. You can use Remix IDE to write, debug, test and deploy smart contracts using the Solidity programming language. Remix can connect to the Ethereum blockchain via Metamask.
Before using Ethereum, you should have a place to store Ether tokens and execute smart contracts. Mist is the Ethereum wallet used for smart contract deployment and is available for Mac, Windows and Linux. While installing Mist, remember once you set up the password, you cannot update it again. Create a strong password and never forget it.
A NodeJS package, GanacheCLI, is a customizable and fast blockchain emulator that can stimulate the Ethereum network on a single computer. It allows users to make calls to the blockchain without the need to run an Ethereum node.
GanacheCLI is used for the instant mining of transactions. It is an easy-to-use API that provides you with an overview of test chain events.
Security plays a prominent role when it comes to building a blockchain application. You need to ensure that the Solidity code does not have security holes. Solium tool is specifically designed to format solidity code and fix security issues in the code.
EtherScripter has an easy-to-use interface used for coding basic smart contracts. With a simple drag and drop interface, developers can connect different components as jigsaw puzzle pieces for developing a contract. It only supports the Serpent programming language.
It is a wallet that connects Chrome or Firefox with Ethereum blockchain by acting as a browser extension. It can save keys for Ether and ERC20 tokens. By linking with Coinbase and Shapeshift, it allows you to sell and buy ERC20 tokens and Ethers. It can be installed simply as a Chrome extension.
9. Blockchain Testnet
Users need to pay for the gas usage and launch of an application when writing EVM (Ethereum Virtual Machine) programs. Since blockchain is immutable and transactions once added to it cannot be updated or removed, untested programs can result in high costs. That is why it is essential to test a decentralized application before it is deployed on the mainnet. Ensure to test your app on Blockchain Testnet before going live.
Truffle is a framework for Ethereum that provides a development environment. The framework supports a library which can link complex Ethereum apps and offer custom deployments to make contracts coding simpler. It supports some of the features mentioned below:
- Automated Contract Testing with Chai and Mocha.
- Interactive console for direct contract interaction.
- Built-in smart contract compilation, deployment, binary management and linking.
- Network Management for deploying public and private networks.
- External script runner to execute scripts within a Truffle environment.
The list of blockchain development tools is endless. You will find numerous tools that can be used to develop blockchain apps (dApps) and smart contracts. To know which is the best blockchain development tool for your project, consult our team of blockchain experts.
How long blockchain development takes?
The duration of a blockchain project depends on the application’s requirements. The project is initiated with PoC, which typically takes 2-3 weeks. Once the PoC is done, it takes 4-5 weeks to develop a minimum viable product with bare minimum features.
Launching an application on the mainnet takes around 2-3 months based on the requirements of a client.
If you are looking for a blockchain development partner who can help you develop a blockchain application, we have consolidated a list of some top blockchain development companies.
List of Top Blockchain Development Companies
Established in 2007, LeewayHertz is a San-Francisco based blockchain development company that offers a wide range of blockchain development services:
- token development
- blockchain app development
- smart contracts development
- blockchain supply chain solutions
- security token development
- stablecoin development.
LeewayHertz’s team of blockchain developers has expertise in working on multiple blockchain platforms such as Ethereum, Hyperledger frameworks, EOS, Tron, Corda and Stellar.
From consultation to PoC, visual and technical designs, development, deployment and maintenance, blockchain experts at LeewayHertz provide end-to-end assistance to startups and enterprises. LeewayHertz is one of the first companies which has developed a signing platform on the blockchain. Some of their blockchain projects are TraceRx.
Somish is a technology and product development company that builds automated solutions using emerging technologies. It was established in 2006 and has been serving companies to re-engineer, design, build and implement automation systems.
Somish dived into blockchain technology in 2016 and has developed blockchain projects for governments, municipal corporations, retail companies, finance companies and various other industries.
Founded in 2014, SoluLab is a technology company with expertise in the blockchain, mobile and web development. Specialized in Hyperledger Fabric, Smart Contract Development, Private and Public Blockchain Development, their team can build a secure and robust blockchain solution for your business.
They have the ability to work on different blockchain development tools, including Ethereum, Hyperledger, R3 Corda, Quorum, IOTA and Ripple. Their blockchain development services cater to various industries like healthcare, supply chain management, government, education, publication and media and real estate.
Venture Aviator develops, tests and deploys custom blockchain applications with an interactive and engaging approach.
They have developed robust blockchain solutions for growth companies and Fortune 500 companies like Allianz and Cisco. They aim to assist startups, enterprises and entrepreneurs in developing technology platforms.
SoftwareMill is one of the leading blockchain companies that deliver value to its clients with high-quality development. They have a dedicated team of skilled developers who can cater to a wide array of business requirements within the estimated budget. Based in Poland, they believe that they can resolve the industry-related issues with the digital solutions built on the latest technologies.
Consult our team of blockchain experts to kickstart your blockchain development journey. Our experts can convert your idea into a real solution by implementing blockchain technology into your project idea.