Blockchain App Development The term "blockchain" has been around for a long time. But not everyone understands exactly what it means. Let's find out what blockchain is and how it's being used in application development. What are blockchain solutions? Blockchain is a network of interconnected data nodes where all crypto transactions are recorded. This information is visible to everyone, but cannot be edited. Each block automatically validates transactions using smart contracts — self-executing algorithms. They only allow transactions on the blockchain if certain predefined conditions are met. Blockchain applications are called decentralized. States and corporations cannot control the information on the blockchain, which helps counter censorship and protect data. {{ "title": "Write ChilliCode", "description": "To help you acknowledge your business needs and decide whether IT services will work for you, I’ve sorted out a list of cases.", "buttonText": "Contact us" }} Blockchain technology opens up opportunities for application development in many industries. Although blockchain solutions can be used to create almost any application, it is most commonly used in fintech, logistics, and online commerce. But all in all, blockchain can be used to develop anything from games to social networks. Blockchain Application Market Summary PwC estimates that blockchain solutions could add $1.7 trillion to the global economy by 2030. There are several key trends in the blockchain market. The growth of decentralized financial services (DeFi). They make financial services more accessible and reduce counterparty risk. DeFi applications are based on smart contracts. The rise of Blockchain-as-a-Service (BaaS). These platforms offer a set of out-of-the-box tools, components and templates for building and deploying blockchain applications. Government use of blockchain. Blockchain allows governments to cut out middlemen and reduce administrative costs. And it reduces the risk of fraud by making blockchain transactions transparent. Benefits of decentralized applications When it comes to the adoption of blockchain technology in the enterprise segment, a PwC survey shows that more than 50% of companies globally are using blockchain solutions. This technology helps them save money, streamline business processes, and protect data. Companies such as Walmart, JP Morgan, and Amazon rely on blockchain for supply chain management, payments, and digital identification. Let's break down the key benefits of blockchain for businesses: Security The encryption mechanisms embedded in blockchain applications provide an unparalleled level of security. Blocks of information are linked in a virtual chain, and each block stores an encrypted copy of the previous block. Therefore, blockchain is very difficult to hack: it doesn’t have isolated weak points, so hackers would have to attack the entire network. In addition, any changes to the chain are immediately visible to all participants. Transparency All transactions in a decentralized system are recorded in a public database. This "distributed ledger" contains records stored on each of the blockchain nodes. Cost savings The fewer intermediaries in financial applications, the lower the fees. Blockchain solutions are based on a peer-to-peer (P2P) network, so users of decentralized applications can transfer cryptocurrency directly to each other, bypassing intermediaries. Reduced censorship Blockchain isn’t controlled by governments or corporations, and tracking user actions in decentralized applications is no easy task. Transactions on the blockchain are only approved if users' actions meet predefined conditions. Smart contracts are responsible for authorizing transactions. They are algorithms that monitor the conditions for compliance of a transaction on the blockchain. The process is automated and excludes the involvement of third parties. As a result, neither governments nor corporations can influence blockchain transactions. Increased efficiency A secure, decentralized application with minimal intermediaries and censorship increases the efficiency of user actions. The fewer intermediaries, the faster the transactions and the lower the cost to users of blockchain applications. Types of decentralized applications Decentralized applications exist in almost every industry: finance, healthcare, insurance, logistics, real estate, and so on. Let's take a look at the most common types of blockchain applications. Financial applications. Fintech is the first industry to embrace blockchain. The transparency of this technology is a big plus for the financial industry. Blockchain has even created a new niche in the industry: decentralized finance (DeFi). The category of DeFi applications includes cryptocurrency-based platforms for decentralized exchange and trading. Coins are stored in a blockchain wallet, which allows users to conduct crypto transactions. The main goal of DeFi is to compete with banks and offer a replacement for the traditional financial system. This means giving everyone access to decentralized lending and new investment platforms. And give people the opportunity to earn passive income from cryptocurrency assets and save on transfer fees. DeFi applications are categorized into the following types. Staking platforms. Staking is when cryptocurrency holders lock up their digital assets for a period of time to support the operation of a blockchain network. In exchange for staking the coins, their owners earn more cryptocurrency. Staking allows crypto holders to earn a passive income without having to trade their assets. It’s like putting money in a high-yield savings account but with increased returns. Lido Finance, Rocket Pool, and StakeWise are some of the best examples of decentralized staking platforms. Borrowing & lending platforms. Decentralized lending and borrowing are alternative ways to issue and take out loans using DeFi protocols, digital assets and blockchain wallets. These platforms make borrowing and lending simple, transparent, and accessible to crypto users without the need for intermediaries. AAVE, Compound, and Silo Finance are examples of such applications. Decentralized exchange (DEX). These are peer-to-peer marketplaces where transactions take place directly between cryptocurrency traders. DEX transactions don’t involve banks, brokers, or other intermediaries. Examples of decentralized exchange applications include Uniswap, Curve Finance, and SushiSwap. DeFi derivatives. Crypto derivatives work similarly to the traditional ones: hedging price risk and gaining exposure to a particular asset or market without personal involvement. The values of DeFi derivatives are often tied to the crypto markets but are also influenced by traditional currencies, commodities, and other conventional assets. DeFi derivatives often rely on smart contracts, as do many other platforms in decentralized finance. Lyra, GMX, and dYdX are examples of DeFi derivatives platforms. Auction sites. These applications allow users to organize their own auctions and bid online. Auction platforms protect users from sudden changes in bids and log the transaction time. Such auctions sell NFTs: virtual tokens that are used to prove ownership of digital goods, from videos to in-game items. Real estate. These platforms allow users to buy and sell real estate without intermediaries. Because it’s impossible to alter the records on the blockchain network, these platforms are extremely transparent. For example, all parties to a real estate transaction can see to whom the ownership of a property is being transferred. The fewer intermediaries in such transactions, the lower their cost. CitaDAO, HoneyBricks, and Tangible are examples of real estate dapps. Prediction markets. The subject of trading on these sites is the outcome of an event, such as a sporting or electoral event. Prediction markets are used to place bets on wins and losses or to try to predict a particular outcome. Rolla, Wingman, and Augur are examples of prediction market platforms. Play-to-Earn. Part of the play-to-earn (P2E) gaming industry is based on blockchain technology. In these applications, gamers can earn crypto rewards for completing in-game tasks. Some notable P2E games include Axie Infinity, Decentraland, and Polywin. Blockchain applications in other fields Medical data collection and storage. These applications collect medical data and make it accessible to authorized users. MediBloc, Medicalchain, and MedCredits are blockchain-based platforms used in healthcare and medical records management. Digital identity verification. Blockchain identification allows people to control their digital data. Traditional identity systems, which often use centralized databases, are often controlled by governments or corporations. The centralized databases are vulnerable to hacking and leaks. By contrast, blockchain-based identification relies on a decentralized database stored on each node of the network. Even if hackers manage to breach one node, the user is not affected — their data remains intact on the other links in the chain. This allows people to keep their personal information safe. Here’s how blockchain identity verification works: Users own their data and are not dependent on centralized entities like governments or corporations; It is based on the principles of privacy, security, and autonomy; Users can link their digital identity to their real identity or choose anonymity. Let’s talk about the benefits that digital identification platforms bring to their users. First of all, people can control their personal information on the internet without third-party oversight. Secondly, thanks to blockchain-based identification, users can access services and applications directly, without a central authority. Examples of platforms that use blockchain to verify people's identity: Dock, Authentiq, Joba Network. Decentralized data storage. Here’s how these platforms work: the user uploads a file, which is divided into multiple encrypted copies that are stored on the blockchain. All copies are accessible only by the owner. The blockchain distributes these copies across multiple nodes. So even if some of the nodes stop working, the user can still open the file using other blocks. The advantages of such services over centralized platforms are low costs and fast loading times thanks to parallel connections. And because there is no centralized control on the blockchain, owners cannot be denied access to their data. Sia Tech, Filecoin, and Storj are known decentralized data storage platforms. Decentralized Autonomous Organizations (DAOs). A new type of business that doesn’t have a central governing body. The members of a DAO share a common goal of acting in the best interest of the organization. They decide what the company does and can manage its operations. Aragon, DAOstack, and Colony are platforms for decentralized governance and collective decision-making. Tech stack for developing a decentralized application To create any application, you need to choose the right programming languages and frameworks. Decentralized apps are built using blockchain development tools: backend and frontend frameworks, APIs (application programming interfaces), and SDKs (software development kits). The backend framework defines how the blockchain interacts with the application interface. The backend can be based on Java, one of the most popular and robust programming languages. Frontend frameworks are responsible for how the UI, visual design, and navigation work in the application. Tools like React come in handy for frontend development. Mobile apps for Android are developed using the Kotlin programming language, while those for iOS devices are developed using Swift. Kotlin is considered to be a safe, simple, and versatile language. It’s used to build mobile, desktop, and web applications. Swift is a modern programming language that is easy to learn. It reduces errors, speeds up the development process, and improves code quality. And if you want to build cross-platform applications for Android and iOS at the same time, the React Native framework is the way to go. Blockchain-specific languages for application development Smart contracts are very common in blockchain applications. Here are some popular programming languages for smart contract development: Simplicity. This programming language is relatively simple and includes static analysis capabilities. Solidity: This is a language for blockchain development that is also used to create smart contracts. Based on this feature, you can create applications for open voting, auctions, and cryptocurrency sales. Solidity simplifies the development of decentralized applications. Rust. A powerful programming language that ensures code security and prevents errors. It’s an invaluable tool for developing financial applications. Vyper. This is a programming language specifically designed to simplify code safety checks. It has a simple and straightforward syntax, making it suitable for those new to smart contract development. A step-by-step guide to blockchain app development Blockchain application development can be divided into six steps: 1. Market Analysis First, it’s important to study the market: analyze your chosen niche and define the needs of your target audience. What are the strengths and weaknesses of competing applications in your niche? How will your app stand out from the competition? 2. Identify the core features Identify the main problem your app will solve. Only then will it become clear how exactly it should be developed. At this stage, you typically define the app's features, development timeline, and budget. 3. User Interface Design (UI/UX) A professional team of UI/UX designers will help you create an app with easy navigation and a memorable visual style. 4. Development After you’ve planned out the functionality and visual design of the application, you need to find an experienced development team. We at CHILLICODE will help you develop a decentralized application of any complexity. 5. Test and debug At this stage, you need to make sure that the app works as intended and fix the most critical bugs. For this, you need QA (Quality Assurance) tests. The optimal approach is to test the app after each development sprint so that you can gradually refine every feature and fix bugs. 6. Launch Release the application and monitor user feedback. It will help you improve the software: fix bugs and add new features. Blockchain application development: important factors Let's take a look at the factors to consider when building decentralized applications: Type of blockchain platform Some platforms are based on cryptocurrency, while others are based on smart contracts. The sooner you decide on the type of platform, the easier the development will be. Smart contracts Now it's worth considering if you need the smart contract feature. These contracts are executed automatically when predefined conditions are met. Consensus protocol Blockchain platforms operate on a variety of consensus protocols, including Proof of Work, Proof of Stake, Proof of Elapsed Time, Proof of Burn, etc. A consensus algorithm is a mechanism that allows blockchain participants to agree on the current state of the network. It ensures that blockchain participants cannot arbitrarily change the data stored in the ledger. Here are the most common consensus protocols: Proof of Work. This is a mechanism that allows decentralized cryptocurrency networks to approve transactions without the involvement of a central authority. PoW relies on solving complex mathematical problems to verify and add new blocks to the chain. Proof of Stake. This consensus algorithm allows cryptocurrency owners to make decisions about changes to the network. The number of blocks a member of the network can create depends on the amount of cryptocurrency they own. Proof of Elapsed Time. A mechanism to prove elapsed time. It is based on the principle of a fair lottery, where all participants of the blockchain network have an equal chance to create a new block. For all participants, there is a timer that measures a randomly selected period of time. At the end of this period, the algorithm selects a participant who has the right to create a new block. Proof of Burn. This algorithm is based on the fact that cryptocurrency holders buy the right to create new coins. Payment is made with the coins already held, which the owner sends to a specific address The more cryptocurrency is spent by a participant in the blockchain network, the more likely it is that they will get the right to create new coins. Cryptocurrency If you want to develop a cryptocurrency application, there are a lot of specialized tools available. It’s important to decide in advance if your platform will have cryptocurrency features. What is the main advantage of cryptocurrencies for businesses? The fact that banks aren’t involved in cryptocurrency transactions. The fewer intermediaries, the lower the fees for transfers and the faster they are completed. Since the authorities cannot fully control cryptocurrency, it is easier to make cross-border payments with it. Virtual money can also be used by those who for some reason don’t have access to banking services. The identity of cryptocurrency owners is encrypted, which ensures transaction anonymity. The downside of cryptocurrencies is the sharp fluctuations in value and attempts by many countries to introduce legal restrictions on them. Monetization If you want to make money with your app, consider various monetization methods: for example, decide whether you will take a commission for transactions or use ads. Scalability If you want to attract a wide audience, you need to think about the app’s scalability: how it handles user demand. There are three main considerations when it comes to the scalability of blockchain platforms: speed, security, and the degree of decentralization. How to choose the right development team Developer experience and portfolio When choosing a blockchain app development company, give top priority to companies with extensive expertise in blockchain technology. Look for a blockchain software development team with a proven track record of launching blockchain-based projects in a variety of industries. Examine case studies and client testimonials to gain insight into the scope and complexity of their projects. Take a close look at the company's portfolio to determine if any of its past projects meet your needs. Look for applications that have addressed issues relevant to your industry, or that have used comparable blockchain technology. If your application has specific industry standards, it may be beneficial to select a blockchain software development team with experience in that area. The team's understanding of the industry will help speed development and ensure that the final product reaches its intended audience. Technical expertise and team structure Evaluate the developers’ technical expertise, taking into account their knowledge of cryptography, blockchain platforms, programming languages, and smart contracts. Choose a company that keeps up with the latest developments in blockchain technology. A diverse and fully staffed team consists of more than just programmers. Choose one that includes project managers to make sure everything stays on schedule and designers who can create an intuitive UI/UX. You may need legal or financial advisors who understand blockchain laws. Personalization and scalability Choose a blockchain app development team that offers solutions tailored to the needs of your business. Make sure the company you choose can meet the scalability and flexibility requirements of your application as it grows. Security and regulatory compliance Because the data stored on the blockchain can be sensitive, security is critical when building blockchain applications. To safeguard your data, choose a team that can implement security features such as encryption, multi-factor authentication, and conduct regular security audits. sub Compliance with laws and regulations may be critical, depending on your business and the goals of your application. Your blockchain development team should keep up with the latest legal requirements related to blockchain technology. Look for a development company that takes a collaborative approach and involves clients in every stage of the app development process. Ensuring the result reflects your goals and expectations requires effective communication and transparency. CHILLICODE has the right development team for your blockchain-based application. In-house or outsource If you have extensive experience and the required resources to hire in-house developers, it may be a good solution for a long-term project. But this can be costly, since freelance software engineers usually charge more, and it may take a long time to find all the necessary team members. An external development team guarantees value for money by providing a large talent pool to meet the client’s app development needs. Also, working with an outsourcing company is usually less expensive than hiring an in-house team. When working with outsourced developers, clients benefit from their extensive software development experience. Even if an outsourced blockchain app development team is located in another country, working with them can be cheaper and more effective compared to in-house programmers. Factors influencing blockchain app development cost Firstly, the cost depends on the chosen blockchain platform. Secondly, the greater the functionality of the application, the higher the development cost. Thirdly, the more complex the design and user interface, the more expensive it will be to create the app. And if you need to integrate your blockchain application with third-party platforms, this will also affect the final price. Keep in mind that every application needs to be maintained, which can also be expensive. Before launching the app, make sure you can afford to release regular content updates and continue to fix bugs. Final thoughts The exact cost of blockchain app development can only be calculated if you have already defined the project requirements. If you want to know how much your application will cost, we at CHILLICODE can help you. Our team will determine the budget and develop a blockchain platform of any complexity. To discuss your project with us, fill out the form below. We always welcome new ideas.
0 min
Share0 minShare0 minShare
