For many, blockchain is synonymous with cryptocurrency. Indeed, digital money has been a priority use case for this technology. Now the use of blockchain is being reconsidered. 45% of participants in the Statista survey said they want to adapt this innovation for the secure exchange of information. Executives realize they can adapt blockchain for use in industry, logistics, healthcare and other sectors. That is why they are turning to IT outsourcing companies like Andersen to develop blockchain applications. But how do you know if an organization needs this technology? What is blockchain software, and how can you create it?
What is a blockchain app
Blockchain is an application without a centralized server.
The data is contained in each registry block, so any participant can view the history of transactions. And an “online log” with records of transactions made is stored simultaneously on all computers in the network.
Users can check the information in the database, but they are not allowed to change or delete it. For example, if a previous block stated that a member owned 20 Tesla shares, no one would dare to arbitrarily correct this figure. If a shareholder sells 10 Tesla shares, a new entry will appear in the block reporting the sale. A transaction archive will track the movement of that member’s securities.
A decentralized application (dApp) combines automatically executed code (smart contract) and a user interface.
Blockchain application mechanism
On the user side, a blockchain app is no different from classic software. It also works through a browser or a mobile platform. The differences lie in the internal structure – there is a distributed database and smart contracts, but no centralized server.
- A distributed database is a chain of blocks, where each of them contains a name (hash) and transaction records. When the first block in the chain (genesis) is created, the algorithm generates a cryptographic hash. The information in the block is signed and permanently assigned to the created hash.
- Decentralization. Network members act as users and mini-servers at the same time. They are subject to the consensus of the network and are responsible for checking and adding new data to the block. Each user is assigned a unique alphanumeric identification number that gives them access to transactions.
- Smart contracts. This is the code (if/when, then…) that is executed when specified rules are followed. The algorithm automates compliance with agreements on the network, notifying participants about the result of the transaction. There is no need to fill in paperwork and waste time agreeing on errors, as is the case with manual work.
- High security level. Blockchain applications are considered some of the most secure software. The information in each block is encrypted with a cryptographic code – a hash. Participants have unique private keys – a personal digital signature. If a fraudster forges the signature, the record will change and the signature will become invalid. The other users will realize that the network has been compromised. In addition, each block is linked to a previous hash and the attackers will have to try harder. In order to fix a single entry, the entire chain must be changed.
Benefits of using blockchain for business
The features of blockchain applications determine their business benefits, such as:
Full transparency and trust among users
Each member of the network views the database and the history of transactions. This capability is useful for logistics, where it is important for shippers to track their cargo step by step.
Users do not need to provide personal information every time to work in the blockchain. They use a unique digital key to confirm the transaction.
Since there is no centralized server in the blockchain, the attacker is deprived of a single access point. So they have to hack into each block individually. These are billions of combinations that require superpowered computers to calculate.
Blockchain speeds up familiar transactions. For example, in a standard transaction, it takes a few days to transfer money abroad. In addition, the customer has to pay a fee to the bank. With blockchain, money is transferred instantly and without intermediaries. Information cannot be changed or deleted, which guarantees the integrity of network participants.
Blockchain application statistics
State of the dApps notes that around 3,800 decentralized apps are created each month. They are used by almost 180,000 people.
Blockchain software is popular in exchanges, finance, gaming, software development and gambling (see infographic below).
Statista predicts that by 2024, companies will spend three times as much on blockchain solutions as they did in 2021 – $19 billion. That means businesses are interested in the technology, willing to invest in it, and more dApps will come to market.
How to build a blockchain application
When creating a dApp, the team follows the same steps as in traditional development, namely:
1. Set the goal of software development.
A project starts with an idea, which needs to be carefully worked out. To understand whether a business needs blockchain, set a goal for the project.
The former is not difficult to deal with. Consulting firm PwC has developed an algorithm that companies can use to determine the feasibility of blockchain. This requires answering the following questions:
- Does your company need a common database?
- Few participants are involved?
- Is there trust between partners?
- Is there a good reason for the information in the database to remain unchanged?
- Do the rules change frequently outside of transactions?
If the business answers “no” to these questions, then the organization is ready for the blockchain application.
2. Research the market and competitors.
Market research will help you get to know your competitors better – their strengths, advantages and disadvantages. Learn something from them and take note of what you can do better and more effectively.
It is useful to study market trends and understand what will be relevant when the blockchain application goes live. Predictive analytics will tell you what features and technologies you need to add now to stay on trend in the future. It is important to probe your target audience to understand their needs. Users will happily respond to an app that is as tailored as possible to their needs.
3. Choose blockchain type.
It is worth deciding on the type of blockchain. This determines the choice of technology and development platform, network configuration and access, type of consensus, and the list of conditions in a smart contract. Therefore, it is worth choosing between:
- private, public or mixed network;
- development based on a blockchain platform, creating your own blockchain or integrating cryptocurrency into a mobile app.
4. Choose a platform for dApps development.
There are about a hundred platforms on the market that can be used to create a blockchain app. State of the dApps magazine lists the most popular ones: Ethereum, EOS, BSC, TRON, Klayth.
5. Develop a blockchain app.
This includes the standard steps for planning and implementing a project, namely:
- Business analysis, in which an analyst from a blockchain development company talks to the customer to define the requirements for the product and prepare the necessary documents to start the project.
- Product design, where the UX/UI specialist thinks through the appearance and navigation of the app.
- Design and testing, where developers implement the functionality specified in the requirements and testers simultaneously check the quality of the product.
6. Launch the product on the market.
The DevOps specialist releases the finished software into production. The support team, in turn, fixes problems that arise during its operation. They also update libraries, frameworks, operating systems and even implement new features. Their job is to ensure that the blockchain application runs smoothly.
Blockchain development should not be driven by fashion. Even the most cutting-edge technology can fail if it is approached unknowingly as “blockchain for blockchain’s sake”. It is worth considering whether a company needs a dApp, what the benefits will be and whether the investment in the project will pay off. Only if you are satisfied with the calculations can you order the development of a blockchain application.