The Global Blockchain Market, estimated at US$3.02B in 2020, has been observing unparalleled expansion in the last few years. COVID-19 has stimulated the digital transformation in several regions due to supply chain disruptions, several physical limitations, and lockdowns using blockchain technology.
Not only this, the Blockchain technology market to see healthy growth at 69.4% CAGR by 2025 because of the increasing acceptance of cryptocurrency and high demand from the BFSI sector.
Let us dig deeper into the world of Blockchain and know everything about Blockchain development.
The blockchain is a distributed ledger initially designed to support the Bitcoin cryptocurrency. However, it has more potential than just supporting cryptocurrencies as it allows for digital information to be distributed but not copied.
This means that any data recorded on the blockchain cannot be altered and thus makes the need for central record keeping redundant since there is no way for this to be tampered with. You can consider them as principles that this technology is based on:
The blockchain is essentially a decentralized technology as it does not rely on any central authority to verify transactions. Instead, these transactions are verified by the consensus of multiple users. Anyone trying to tamper with the data would have to tamper with more than 50% of all the records, which is computationally near-impossible. This makes blockchain technology a tamper-proof system and thus great for making secure transactions.
Due to its decentralized nature, there is less chance of corruption since it is hard to control by any central authority. All the information throughout the blockchain is open for everyone to see, making it easier for businesses that want to enhance their transparency.
Instant Traceability of Transactions
This is one of the best advantages of blockchain, making it easier for businesses to track their purchase history throughout the supply chain. As all information is available on the distributed ledger, companies can run time-stamped audits to trace the origin of materials used in production through their delivery and sale.
Increased Efficiency and Speed
Blockchain provides an enhanced level of efficiency for businesses that enables them to cut out the middleman. As multiple sources do verification, it eliminates the need for any third party, which speeds up transactions and thus makes the whole process more efficient.
Following are a few of the queries that will assist you in determining if incorporating blockchain into your current solution is a good idea:
Is there any duplicate information?
Blockchain can store the same information on multiple nodes worldwide, which ensures data availability and enhances redundancy. This also means that businesses can safely get rid of redundant databases or third-party storage systems, saving them money in IT costs.
Do you need to keep track of transactions?
If you are a business that requires enhanced security for transactions such as a bank, blockchain can prove to be beneficial since it provides an immutable record of all the transactions within its network, which makes it easier to keep track of everything and eliminates the need for third-party auditors or clearinghouses.
Do you need to run business-level applications?
With blockchain, businesses can run their own "smart contracts," which are self-executing programs that store the terms between two parties and automatically enforce them when both sides meet them.
Do you need to cut down on operational costs?
By adopting blockchain technology, businesses can save money by cutting out third-party intermediaries that charge them high fees for their services. Blockchain offers an efficient decentralized platform that eliminates the need for any central authority or clearinghouses, saving businesses money on operations and IT costs.
Do you require a trustless environment?
As blockchain provides a transparent and secure platform, it is harder for any bad actors to carry out any fraudulent activities, making it a perfect fit for businesses requiring regulatory compliance, such as supply chains in the pharmaceutical industry.
Do you need an immutable record?
Blockchain enables businesses to store permanent records on its distributed ledger, making it easier for companies to run audits and efficiently double-check any information to ensure that everything is true.
Do you need an efficient system?
As blockchain offers faster transactions with greater security, businesses can rest easy knowing that their data is safe without the worry of running into any latency issues.
Blockchain technology is quickly gaining popularity as it has multiple benefits, including its transparency, decentralization which provides enhanced security. To integrate Blockchain into your existing business or startup, you can follow these simple steps:
You need to research existing solutions in the market before attempting to create one from scratch. This is because you might have to spend a lot of resources developing a solution only to find out that there is already an existing one.
After researching existing solutions, you need to map out the data flow and data types used in your business process, which will help you create the Blockchain from scratch. Once that's done, you can move on to the next steps.
As Blockchain is only getting more popular, multiple frameworks are available to help simplify the development process. You need to select one that suits your business needs and then customize it for your own use case.
After you have selected a framework, you need to build an application layer that will interact with the Blockchain and manage the data. This is where you can integrate your existing systems or databases to enable interaction between them and Blockchain.
After developing everything, it's time to deploy it so everyone can access it. Depending on your requirements, you can run the Blockchain on your own servers or use a cloud platform to host it.
The cost of creating a blockchain-based solution varies from project to project as it is dependent on multiple factors such as the features, nodes, and security requirements. With that being said, developing a Blockchain solution using any available open-source or existing frameworks is not very expensive and does not require in-depth technical knowledge.
Let us understand the factors in detail
The features of the solution you choose to build will affect the cost. For example, if your use case requires smart contracts, it would be expensive as developing them is not an easy task. Thus, you need to decide on what features are needed before putting a price tag on them.
This is a significant factor that affects the cost of Blockchain Development. There are three types of nodes: Full Nodes, Light Nodes, and Mining Nodes.
A light node can also compute the results required to prove transaction validity without storing the entire Blockchain. This is possible because light nodes rely on other nodes (i.e., full nodes) to send them the required information (e.g., transactions and blocks).
This is possible because light nodes rely on other nodes (i.e., full nodes) to send them the required information (e.g., transactions and blocks). - Mining Nodes are responsible for mining new transactions and blocks.
Mining nodes will also receive a copy of the entire Blockchain, which they can store or sell/transfer to other users. As full nodes can store the complete state of the Blockchain, they are more expensive than light nodes.
It's important to note that even though each node type has different computing power requirements, the cost of building a Blockchain is mainly dependent on the number of full nodes that are going to be built. A general rule used by many companies is to create one full node for every five light nodes, but this may change depending on your company's needs.
The security requirements of a Blockchain solution will affect its overall cost. For example, it'll be more expensive to build a private Blockchain with full node(s) than set up a lightweight system without nodes.
Security is a critical factor when dealing with Blockchain-based solutions, and it directly affects how much data can be stored on your Blockchain. A thorough understanding of all security requirements before building the solution will help you make the right decision about what features to include in it.
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, and it supports two types of installations, Scripted and Binary.
Once you start using the Geth, you either can create your own Blockchain based on the provided settings or connect to the existing Blockchain. If you don't set any default values, it will automatically connect you to Ethereum's mainnet.
The development of blockchain is demand-driven. The more people want to use it, the higher the value increases, the more applications for this technology are created. Let's consider how much time it takes to create a blockchain startup from scratch – creating a platform that will facilitate business processes.
The first stage is about an idea. You decide that you need to turn your project into a blockchain platform because it's profitable, and many other projects do this. An adviser, attorney, or service company can help with this task now. Then you consult with a company specializing in technology implementation, and the first stage begins to create a concept.
To estimate how much time it takes to create a blockchain from scratch, one should take into account two stages of work:• Creating a technical specification;
Thus, creating a blockchain platform from scratch will take about 6-9 months of work.
Creating a technical specification. It usually takes 3 months, but it can vary depending on the complexity of the task and your team's experience. The technical specification includes:
This stage is the most time-consuming one, as it requires a lot of thinking and writing. The documentation includes:
is creating a prototype. It usually takes 3-6 months, but again, it all depends on the complexities of your system and your team's experience. This is a more "technical" stage with a clear list of milestones:
The number of milestones depends on the size and scale of your project, but you can always break it down into several stages. You should also understand that creating a blockchain from scratch is not an easy task – it takes time, effort, and funds. Also, make sure that you hire experienced blockchain engineers who can handle the task.
The creation of a blockchain application is not much different from the creation of any other technology startup. Still, one should consider that it's not all about coding – there are many business processes involved in this work. However, once your platform or app starts generating revenue, you can consider it successful.
There are several reasons to outsource a blockchain development company for your business, and the benefits of doing so will be apparent from the very beginning. Here are the top 10 benefits of hiring a Blockchain development company-
1. Blockchain technology is complex, and not all developers can handle it. If you hire an in-house team, you may fail due to a lack of knowledge or miss out on technical milestones. Hiring a Blockchain development company will give you access to their pool of resources, expertise, and experience.
2. There is no need to reinvent the wheel, and you don't have to do it either. Many companies may not want to spend money on creating their own blockchain platform if their business needs aren't that complicated. That's why they choose a Blockchain development company that can make a working prototype in a relatively short period.
3. There are several ways to outsource your business - you can either build up your own team of blockchain developers in-house, send the specifications of the product you want to create or buy it from a Blockchain development company.
4. Due to the high demand and relatively low supply of blockchain experts, you can easily hire an offshore team for your project. A blockchain developer in India can cost up to 30% less than their US counterparts, and the savings will make a choice even more apparent.
5. Blockchain development companies have skilled teams of project managers and QA testers who will make sure you get a quality product. If something goes wrong, your offshore team can fix bugs or add new features easily - or even rebuild the entire platform from scratch if necessary.
6. In-house blockchain developers usually have full-time jobs, so they can't dedicate as much time as a Blockchain development company. Also, some of them may lack the necessary knowledge or experience to work with blockchain technology from scratch.
7. Even if you have a team of experienced developers in-house, their attention will be spread too thin when creating your entire platform/app/product. That's why you will need the help of an expert who can handle it all by themselves, and that's what a Blockchain development company can do for your business.
8. Since blockchain technology is relatively new, many companies hesitate to use it because they don't know how much money should be set aside for its creation or development. Outsourcing your project to a Blockchain development company will relieve you of this burden, and it may even speed up the entire process.
9. You can choose to work with a blockchain development company with experience in your field or industry, which means that they will know what to do and how to do it right away. If you're unsure about your business model, they can help you set up a working blockchain prototype and determine the most efficient way to make it profitable.
10. If you choose an offshore team, your employees will be more committed to their work - they won't be distracted by the same old office dynamics that may distract some people from completing tasks as efficiently as possible.
The development of blockchain is demand-driven. The more people want to use it, the higher the value increases, the more applications for this technology are created.
At present, blockchain is known not only as decentralized but also as cryptographically protected. So to say that it's simply storage of data or just front-end would be wrong today. Still, let's look at the main difference between these two terms to understand this technology better.
Back-end (or back office) is a term that was first introduced in software development. This term can be defined as a set of programs and servers on which they are running, which support the primary system. Thus, the back-end is not visible to users; it simply provides all necessary functions.
The concept of blockchain was introduced by Satoshi Nakamoto in 2008 when they launched the Bitcoin cryptocurrency for peer-to-peer transactions. However, people started to pay attention to this technology only in 2009 after they tracked a transaction of 10 000 Bitcoins that were stolen from a relatively unknown user. The underlying principle of blockchain is all about decentralization, so no one could have believed that it was possible to track down the stolen money.
If you want to know when blockchain technology appeared in the IT world, 2009 is a good start. This year also marks the birth of Bitcoin cryptocurrency, so in this case, it's not really about the "technology" in narrow meaning but the underlying principle.
If you want to create your own application, it would be helpful to know how blockchain works. Many developers are interested in this subject, so we're ready to provide you with some essential information.
You can take a look at the example below that explains how blockchain works:
A person (Alice) wants to make a transaction; Another person (Bob) is involved in this process; Blockchain creates blocks having information about transactions inside; They are connected using cryptography; Information about transactions (including Alice's one) is stored in such blocks; The block containing Alice's transaction goes to the end of the blockchain; Cryptography makes sure that this information cannot be changed.
If you want to create your own application, it would be helpful to know how blockchain Blockchain has many possible applications these days: from cryptocurrency to voting, from health care records management to real estate. In most cases, developers use this technology to enhance security and making their projects better.
If you want to create a blockchain-powered application, it would be useful to know how easy or difficult this process is. In theory, developing a blockchain-based solution is not difficult because the concept itself is relatively simple, and its tools are open-source.
However, developers face many difficulties that slow down the process or sometimes make it impossible in practice. That's why you can hardly meet an IT solution that is based on the blockchain only. Usually, applications have a combination of various technologies to work properly.
Blockchain has received its share of criticism because many people doubt that it is entirely safe for data storage and transactions. Security is one of the main features of blockchain, so it's tough to break this principle.
However, you must understand that data stored in a blockchain doesn't mean keeping the information in files on computers only. For example, if you want to store some text inside the blockchain, it becomes a transaction that includes information about the sender and receiver.
Hackers may attack blockchain at its core by finding vulnerabilities in cryptography, stealing private keys, and so on. But this attack becomes less likely if you only use the cryptocurrency network without adding your own applications because such networks are well-protected from the outside.
Scalability is another important feature of any modern application that blockchain developers have to deal with. If you want to create a decentralized application, you must ensure that the system allows adding new features without ruining its architecture. In most cases, blockchain solutions are scalable due to their distributed nature.
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