Wondering how much Blockchain development costs? With businesses and organizations worldwide looking to adopt blockchain technology, everyone wants to know the same thing.
And the short answer to this question is- IT DEPENDS!
If you want to know what factors, then this blog is for you. Here, we will discuss every possible factor that affects your blockchain development cost. But instead of directly jumping on the cost, let’s understand the current scenario of the Blockchain market.
Table of Contents
Blockchain Market: A Quick Overview
The adoption of blockchain technology is growing at a rapid pace, with major industry players taking notice. This is evident in the increasing number of blockchain-based projects and initiatives being undertaken by major organizations across a wide range of industries.
As per the Grand View Research report, the global blockchain technology market is to grow to $394.60 billion by 2028, projecting a CAGR of 82.4% between 2021 and 2028.
While the statistics are impressive, it is crucial to note that blockchain development cost isn’t cheap. The cost of developing a simple blockchain application starts from $15,000 and can go up to $1,30,000 for a complex project.
What Factors Impact the Cost of Blockchain App Development?
Here are a few key factors that impact the cost of developing a blockchain application for your business:
The Size of The Agency
One of the main cost drivers for blockchain application development is the size of the agency you choose to work with. Primarily, there are three types of organizations available in the market- Small Cap Agencies, Medium Size Blockchain App Development Companies, and Large Size Companies.
- Small Cap Agencies: These agencies have up to 50 blockchain developers. They don’t have much expertise and are new to the industry. Hence, they charge lower rates as compared to their competitors. The main problem with working with these agencies is that they might be unable to handle your project if it’s too big or complex.
- Medium Size Blockchain App Development Companies: These companies have a team of 500-1000 blockchain experts. They have good experience in the field and can provide you with quality services. However, they charge higher rates as compared to small-cap agencies.
- Large Size Companies: These companies have a team of more than 1000+ blockchain developers. They have extensive experience in the field and can handle large projects effectively. They also charge high rates for their services.
You can either work with an agency specializing in blockchain application development or with a more generalized organization. The benefits of working with a small agency include getting things done quickly and efficiently. They are also more flexible regarding changes and can provide higher customer service.
On the other hand, large companies have more resources available and can handle larger projects. They may also be able to offer you a lower price per hour of work.
Talking about the cost, so here how it looks like:
|Large App Development Companies||3000+||$4,50,000 to $15,00,000|
|Mid-cap App Development Companies||500+||$25,000 to $2,00,000|
|Small Agencies||10 to 50||$2,000 to $ 25,000|
Industry You Are Building Blockchain App
The cost of developing a blockchain app depends on your target industry. For instance, if you want to build a blockchain app for the banking sector, it will cost you more compared to developing a blockchain app for the healthcare sector. This is because the banking sector is more complex and requires more security than the healthcare sector.
Similarly, if you want to develop a blockchain app for the supply chain management industry, it will cost you more as compared to developing a blockchain app for the retail sector. This is because the supply chain management industry is more complex and requires more security as compared to the retail industry.
Here is the cost estimation of some industries:
Healthcare: $55k – 100k+
On-demand: $40k – 80k
Social Media: $45k – 100k+
Public Sector: $70k – 100k+
Finance Sector: $60k – 100k+
Blockchain App’s Complexity
The complexity of the blockchain application is one of the most critical factors that impact the development cost. The more complex the application, the more expensive it will be to develop. This is because more complex applications require more time and resources to develop.
Several factors are combined to define the complexity of a Blockchain mobile application.
- Data Structures: Data structures used in a Blockchain are more complex than traditional database structures. For example, in a typical database, data is stored in tables, with each table having a specific schema. In contrast, data on a Blockchain is stored in blocks that are chained together. Each block contains a timestamp and a link to the previous block. This makes it more difficult to query data on a Blockchain.
- Cryptography: Another factor that contributes to the complexity of Blockchain mobile applications is the use of cryptography. Cryptography is used to secure the Blockchain’s data and ensure that only authorized users can access it. This adds an extra layer of security to the system but also makes it more complicated to develop applications that can interface with the Blockchain.
- Consensus Mechanisms: A consensus mechanism is a set of rules that allows a blockchain network to agree on the ledger’s state. There are many different consensus mechanisms, and each has its own trade-offs in terms of security, decentralization, cost, and efficiency.
The most common consensus mechanism used in public blockchains is proof-of-work (PoW), also used by Bitcoin. PoW requires miners to expend computing power to solve complex mathematical problems to add new blocks to the chain.
While this approach effectively prevents double-spending and other attacks, it is relatively slow and wasteful of energy. Other popular consensus mechanisms include proof-of-stake (PoS), which requires users to stake their tokens to validate transactions, and delegated proof-of-stake (DPoS), which allows users to elect delegates who will validate transactions on their behalf.
- Platform: Blockchain applications can be built on a variety of different platforms, including Hyperledger Fabric, Ethereum, and more, each with its own unique set of features and capabilities. The platform chosen for a particular application will directly impact the application’s complexity.
For example, Ethereum is a popular choice for building Blockchain applications. Ethereum provides powerful tools for developers, including smart contracts and Solidity, a programming language specifically designed for Ethereum. However, Ethereum is also a more complex platform than others, making development more challenging.
In contrast, EOS is a newer platform that promises to make development on Blockchain simpler and more user-friendly. EOS is still under development and has yet to reach its full potential, but it may eventually prove to be a better choice for certain types of applications.
- APIs: A number of different types of APIs can be used to develop a Blockchain mobile application. The most common type of API is the Hyperledger Fabric API. This API allows developers to create applications that interact with the Hyperledger Fabric blockchain.
Other popular APIs include the Ethereum JSON-RPC API and the Bitcoin Core RPC API. Each of these APIs has its own set of features and functions that can be used to develop a Blockchain mobile application.
Overall, these factors combine to make developing mobile applications for Blockchains more complex than traditional databases.
A cost breakdown format determined by the complexity of the dApp would look like this –
Low Complexity Blockchain-Based App: $15k to $35k
Medium Complexity Blockchain-Based App- $30k to $90k
Blockchain App Category
The blockchain application types are largely divided into two types,i.e.,
- Cryptocurrency-based Solutions: These solutions are developed using a decentralized ledger system, which can track and store transactions. Because of the decentralized nature of this system, there is no need for a third party to verify or approve transactions. This can lead to lower costs associated with blockchain app development.
- Non-cryptocurrency-Based Solutions: These solutions make use of a centralized ledger system. In this type of system, a central authority verifies and approves all transactions. Because of this centralized structure, blockchain app development can be more expensive.
Blockchain App Services
The need for blockchain app services also impacts blockchain app development costs. These services can include anything from ICO development to smart contract development. Here, we’ll look at some of the most popular blockchain app development services and how they impact the overall cost of developing a blockchain application.
- ICO Development: Initial coin offerings (ICOs) have become a popular way for blockchain startups to raise funding. However, developing an ICO can be costly, as it requires both technical and marketing expertise.
For example, ICO development costs can include website design, whitepaper development, and smart contract development. Marketing an ICO can also be expensive, as it requires reaching a wide audience, which can add to costs. ICO website, token creation, and building a crowd-sale smart contract will cost around $10K to $15K.
- Smart Contract Development: Smart contracts are one of the most popular features of blockchain technology. They allow for the execution of transactions without needing a third-party intermediary. This can save businesses a lot of money on transaction fees. However, developing smart contracts can be complex and time-consuming.
As such, it’s essential to factor in the cost of smart contract development when budgeting for your blockchain app. The predicted cost for a moderate-size smart contract could be around $5,000.
- Cryptocurrency Exchange Development: If you’re looking to develop a cryptocurrency exchange, you’ll need to work with a service specializing in this development type. Cryptocurrency exchanges are different from traditional exchanges because they require higher security and functionality. As such, they tend to be more expensive to develop.
However, if you want to offer your users the ability to trade cryptocurrencies, then an exchange is essential. Typically, the development cost of a cryptocurrency exchange platform can vary from $50,000 to $ 98,000 for a basic exchange.
- Wallet Development: A cryptocurrency wallet is another must-have for any crypto-related project. These wallets store users’ private keys, enabling them to send and receive cryptocurrencies. Again, due to the sensitive nature of this data, wallet development can be complex and costly. Crypto wallet development cost is calculated to be about $15000 to $1,50000.
How Much Does it Cost to Hire Blockchain Developers?
This is a difficult question to answer, as many factors can affect the cost of hiring a blockchain developer. Some things that can affect the cost include the developer’s experience, location, and availability. Generally, you can expect to pay somewhere between $50 and $150 per hour for a blockchain developer.
As per Codementor.io,
- The average hourly prices range from $81 up to $100
- Medium hourly prices range from $61 up to $80
The best way to cut down the cost of blockchain developers is to outsource the work. By outsourcing, you can get the work done for a fraction of the price. Many companies offer blockchain development services. All you need to do is find one that fits your needs and budget.
What is the Cost of Commercial Blockchain?
Before understanding its price, you must understand what commercial blockchain development is.
Commercial blockchain development is the process of developing a blockchain platform that can be used by businesses to streamline their operations.
- Legal and Government
- Manufacturing, and more.
However, each industry has different costs for building the Blockchain app. Hence, it is fair to say that commercial Blockchain can cost anywhere from $50,000 to $1 million.
Read Also: Blockchain Healthcare Use Cases for 2022
The cost of developing a blockchain application will vary depending on the project’s complexity. However, it is essential to note that blockchain development is a costly undertaking, and businesses should be prepared to invest a significant amount of money into the project.
With that said, you can save money by utilizing existing open-source platforms such as Ethereum and Hyperledger Fabric. Also, you can hire a trusted Blockchain development company. Overall, the cost of developing a blockchain application is high, but the benefits provided by the technology may outweigh the costs for some businesses.
Frequently Asked Questions
How can I reduce the cost of developing a blockchain?
There are several ways to reduce the cost of developing a blockchain.
- One way is to use open-source platforms such as Ethereum or Hyperledger Fabric.
- Another way is to use a software-as-a-service (SaaS) platform such as Blockstream Green or IOTA Hub.
- Finally, you can use a platform that combines both open-source and SaaS solutions, such as BigchainDB.
What are some common features of blockchains?
Some common features of blockchains include:
- Distributed ledger technology (DLT)
- Smart contracts
- And tokens.
How much does it cost to develop a cryptocurrency?
The cost of developing a cryptocurrency can vary greatly depending on the features and complexity of the project. Generally, development costs will range from $5,000 to $100,000.