Factors Governing Blockchain Application Development
Every business aims to streamline operations, add transparency and match its interests with other participants of its ecosystem, ensure security, and improve visibility. With blockchain being the new buzzword these days, many businesses are wondering if they should also jump to the blockchain and tap into the solutions it is offering in the digital age.
Blockchain technology is becoming readily available across different, and coming up with a shared, digital ledger, gives easy access to important data. The increased transparency and traceability can further help businesses become more successful.
And, the benefits of blockchain technology are not just limited to finance and technology. In fact, lot many sectors from healthcare to higher education, real estate, voting, and supply chain can gain operational efficiency and competitiveness by investing in blockchain applications. development.
For instance, the healthcare sector can store records of patients, which in turn may lead to increased trust in medical research. The real estate sector can store records of land and property ownership. Likewise, the voting system can benefit as blockchain’s decentralized muscle can help prevent ballot duplication and tampering. Furthermore, the supply chain industry can accurately track assets from vendors to customers.
The market for blockchain applications is yet to pick up momentum. The majority of sectors have still not tapped into the benefits of blockchains and only have a blurred idea of what these application offer. But in years to come, the business world will not be able to imagine its future without it.
Of course, blockchain technology is here to stay as backed by these statistics:
- The blockchain industry has recorded an annual growth of is 56 percent.
- Financial institutions are likely to save $12 billion yearly with the help of blockchain technology
- The banking sector has around 30 percent of the blockchain market share worldwide.
- The spending on blockchain solutions is expected to touch $19 billion by the coming decade
But there are various factors that determine the development of blockchain technology. Some of these are:
Development Cost: Developing a blockchain application is an expensive proposition. Even for a small size application, the cost of designing, developing, and testing the application may fall between $50,000 to $300,000. Only designing takes 8 to 20 percent of the total development cost.
Further, the maintenance of a blockchain application costs around 35 percent of the overall project cost, and it may go higher if more complexities are involved. Since this technology is relatively new in the market, there is a scarcity of qualified, skilled, and experienced blockchain developers in the market. The average annual salary of a blockchain application developer is $150,000.
Nature of Industry: The nature of business will determine the development of blockchain technology. A small business that does not have much data, may store that locally than invest in blockchain application development. Not all businesses can gain from this technology, so they should evaluate how it will benefit businesses before giving in to the trend or pressure of jumping on the blockchain application bandwagon.
They should closely look into their overall business needs and compare them to the high-level use cases of blockchain development and then decide if their business will benefit from a blockchain solution.
Needs and Requirements: A business needs to draft its requirements, look at the existing solutions that the market offers, and also consider which technologies they require both on-chain and off-chain for a fully functional ecosystem.
Does it require cryptocurrency application development or crypto wallet app development? Or does it just want to make the most of the Blockchain-as-a-Service, or it just wants to capitalize on the generalized capability to tackle issues related to security and data control? It may just want to utilize the smart contracts mechanism that enables both parties involved in the transaction to remain anonymous. For instance, smart contracts self-execute on their own when conditions meet with the help of blockchain-based code.
So, a business can create a roadmap to keep track of deadlines and understand the requirement of resources.
Select a Platform: The platforms the business decides to go for will influence the development of the blockchain application, and in turn decide the skills it requires from a development team to get the blockchain application going. The whole process requires research and time to ensure that it chooses the right platform that meets all needs.
A platform like Ethereum allows you to come up with a blockchain application and create your own ecosystem. You can create smart contracts and execute them with ease. Meanwhile, Hyperledger allows the company to come up with a corporate tool enabling exchanging data within its own company. R3 Corda is another platform that is useful for businesses dealing in commerce, healthcare, trade finance, and supply chain. Let us not forget Ripple that allows businesses to easily send money anywhere across the world and connect to banks and payment providers. It is extremely fast, and you can carry out up to five transactions per second.
You can create your own new blockchain application or just clone a popular blockchain platform. While selecting a platform, the business should consider the problems it expects to solve through blockchain application, the time involved, the total cost for development, and developer requirements.
With all the freedom, skill, and knowledge, blockchain application developers can come up with solutions that align with a company’s requirements. These solutions can be easily modified to ensure that they meet the requirements for different sectors like retail, healthcare, technology, and education, or for those who just want to come up with a better way to form a mobile application development for new businesses that need blockchain as the core of their business.
Blockchain Development Challenges
Of course, coming up with blockchain application development is not a cakewalk, as it faces several challenges. Some of these are:
Decentralization: It is one of the major reasons for businesses to adopt blockchain technology. In the world of finance, it allows one to store and trade cryptocurrency without giving banks control of their assets. Here transactions are verified by a group of notes instead of one individual node). Once these transactions are verified, you cannot change them. The drawback here is the time that goes into multiple confirmations to reach a consensus. We are yet to find a way to speed up this process.
Security: Though blockchain is seen as a secure way to save data, it is still not safe from cybercriminals and hackers. Anything that threatens the security of blockchain will have a ripple effect, affecting the entire industry that is set on it.
Scalability: The mass-scale adoption of blockchain depends on its ability to handle a large number of transactions. But speed is an issue, especially as block sizes keep growing.
These factors and challenges should work as a guideline when considering the implantation of blockchain technology or the development of applications by any business.
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