The unprecedented growth of blockchain in a short period of time suggests that it’s here to stay. The sooner we integrate businesses and companies into a blockchain solution, the sooner we will get a better result. According to Statista, by 2030, the global market for blockchain development will cross $1 trillion. However, there is a lot of misinformation and confusion surrounding blockchain implementation for businesses. In this article, we have provided step by step guide on the most important factors in blockchain technology and how it will impact business. This will clear doubts and answer some of the most important questions for businesses that are investing in blockchain app development companies for the future.
What is Blockchain?
Blockchain is one of the fastest growing sectors in the industry in recent years. Businesses and companies are leveraging this new technology to create a solution for their work. However, before we start with usage and implementation of blockchain, we need to understand what it is.
Blockchain is a digital ledger that contains a block of records that are decentralized and public. It can record and track the transaction of the block in a network. Basically, in layman’s terms, blockchain have blocks(records) that are connected digitally like a chain. Because of this, the records are incorruptible and immutable. Each block contains a time stamp of the data recorded, A cryptographic hash of the previous block and recorded data. The next block also contains the cryptographic hash of the first one, this way, no one can break the chain by altering or removing the data.
How Can Business Benefit from Blockchain?
Blockchain is already making waves in the tech industry but is it for everyone? Will blockchain implementation in any business work? Here is how blockchain can help businesses.
- Security and Privacy
One of the main focuses of blockchain is to provide ironclad security for the data. Blockchain has end to end encryption that keeps all data safe. Apart from that, every member is anonymous and requires permission to access data. This will enhance the security and privacy of the data and keep it unbreachable.
- Cost Reduction
Blockchain can save lots of expenses for business as it provides seamless transaction of data. Features like cryptocurrency, smart contracts and others will reduce the overhead cost of the business significantly. Blockchain offers an immutable transaction of data which is useful for businesses as they can remove the middleman from it.
Businesses depend on transparency and fairness which can instill trust. By using blockchain technology, they can share data and financial information without worrying about a security breach. Businesses can trade and exchange payments through blockchain as safe and secure. It has encryption, smart contracts and a secure data transfer protocol that is unchangeable.
Blockchain can streamline the work process and increase productivity for the business. One of the biggest hurdles in any business is communication and access to data. Blockchain offers a safe and secure way to send immutable information. It also provides access to those members who are part of the network. With a combination of Blockchain, IoT, machine learning and AI, we can automate redundant tasks and others.
- Smart Contracts
Smart contracts in blockchain indicate certain programable actions that are executed when predetermined conditions are met. This will automate a certain task that requires monitoring as blockchain can measure the task and when the conditions are fulfilled, it will automatically execute the next task in the line. This will revolutionize the business process, reduce costs and create an efficient work process.
Prelude to Blockchain Employment to Businesses
Blockchain offers a multitude of features for business and companies but first, we need to understand the requirements and pitfalls of the process. Here are some questions you can ask yourself regarding your need for blockchain in your business.
- How is blockchain going to help my business?
- What type of problem will I solve with blockchain?
- Will blockchain reduce cost and time for my business?
- Is decentralization important for my business?
- Who will I add to my network?
Once you ask this kind of question and the end result is blockchain, you can rest assured about your decision. However, there are several other factors that impact blockchain implementation in business, such as
- Not a Traditional Database
Blockchain is the safest place to store data, but do not consider it as data storage. It can contain less amount of data as it’s limited by the technological aspect. We can integrate other technology to increase data storage but then the cost of the storage will increase.
- Financial Viability
Everyone wants to work with blockchain and create new applications for their business, but will it save cost and become financially viable? It all depends on the type of application and implementation they are trying to create. In some cases, blockchain will provide better return on investment but it will take time. Make sure to understand the usability and scale of the blockchain before implementation.
- Uncertain Regulation
Blockchain is still new and evolving, which indicates that rules keep changing. There are no certain rules and regulations for blockchain and that could hinder the process. We need a fixed framework for blockchain and regulatory rules to move ahead.
- Difficult Integration
Blockchain is an emerging technology with its own features and limitations. It’s harder to integrate with a traditional system. Some sectors rely heavily on the legacy system and blockchain needs to follow it. Without total compliance with traditional systems, blockchain will not function for the purpose in some industries.
Steps to Implement Blockchain Successfully
1. Use case
Use cases indicate the purpose of the implementation. How can blockchain help your business and what type of issue will it solve? Create a clear use case with demand and complication faced in your work, we can build a better application. Creating a use case also provides answers to your business needs blockchain.
2. Proof of Concept
Proof of concept offers much needed clarity to the business regarding the new technology. Proof of concepts means evidence-based research on how blockchain integration will help your business. It’s similar to a prototype or MVP in app development. The POC method includes creating a roadmap or plans on how to build the application and how it will help the business. After that, you can Hire Blockchain Developer to build an MVP and test it rigorously. Once the concept is feasible, we can move further with the process.
Blockchain app development depends on choosing the right platform for the right reasons. Some platforms are specifically designed to create a certain type of blockchain application while others provide different services. Here is a list of the best blockchain platforms.
Ethereum is one of the cryptocurrencies and a reputable blockchain app development platform. We can build a blockchain app swiftly with Ethereum that is easy to scale. It has faster transaction speed and better security. We can add more nodes to increase the network size in accordance with our requirements.
For business and organizations, Steller is one of the best options. It offers open-source databases and decentralized systems. It is highly scalable with better transaction speed. One of the biggest advantages of Steller is multi-currency transactions. We can send and receive payment in any currency.
Multichain offers solutions for every sector as it has many features which can be utilized for business solutions. It is mainly used for NFTs, but we can leverage the security features of the multichain for business as well.
Privacy is one of the main concerns in today’s business environment. Corda offers better safeguards and privacy for the business by assigning public or private labels to any transaction. Also, it’s a developer friendly platform that allows businesses to create complex applications to solve their problem.
- Hyperledger Fabric
It is a private blockchain network creator that allows businesses to build apps for certain numbers of people. It has higher standards of security and privacy than others. It also makes sure that all data is verified and tamper proof in the transaction.
Similarly, to other platforms, quorum also focuses on data privacy and security. It also uses hybrid smart contracts that can be set to public or private. It uses “Quorum-Chain” consensus algorithm that allows majority voting but also limits it to certain members.
- IBM Blockchain
IBM is one of the oldest tech giants in the business that also offers blockchain solutions for business. It provides enhanced security, better transparency and traceability. Along with that, it offers better speed and automation to the business using blockchain technology.
Choose Consensus Protocols
Consensus protocols are important in blockchain as they define the method of verifying the data. Here are some consensus protocols to choose from.
- Proof of Stake
Proof of stake (PoS) is a consensus protocol that indicates new block developers will be chosen based on the stake (coin, block) they have in the network. Users with a higher number of stakes in the network will be chosen based on this consensus protocol.
- Proof of Weight
Like proof of stake, proof of weight gives each user a certain “weight” based on the amount of cryptocurrency they have. The fundamentals can be changed based on the network requirement and definition of weight for a particular business.
- Proof of Work
This consensus is based on the amount of work a miner or block builder needs to do. In certain aspects, block adders need to solve complex mathematical problems to add a block.
- Delegated Proof of Stake
Participants can vote for a certain block added by using their coin. This miner or block builder is then chosen to create new block. This is like proof of stake in some sense.
- Byzantine Fault Tolerance
It is based on the byzantine puzzle where to reach a decision; some needs to be ignored. Similarly with this consensus protocols, to reach a consensus in the network, it can ignore the users who did not reply or choose the wrong options.
There are a few other consensus protocols such as proof of importance, proof of capacity, proof of elapsed time and more.
Build and Test Blockchain Application
The last step in the list is to build the app according to your requirements and other factors and test it thoroughly. Once you build the application based on your reference, it’s time to test it. Start by onboarding new users to the application. We also need to integrate it with a legacy system as most places do not use blockchain yet. Make sure to create smart contracts, so that you do not need any mediator. After that, create your first block and create a communication channel. After that, you can simply deploy the blockchain application. Once you have a number of participants, you can create your own blockchain ecosystem.
Blockchain Execution Challenges
Although most blockchain platforms offer better speed, they are still far behind in transaction speed. This will hinder the process of business in the long term when many participants have joined the network.
- Safety Precautions
Blockchain is one of the most secure technologies in the market, but it is still used by humans. If we make mistakes in security protocols and measures, our data will not be safe. If the encryption is not set properly, it might be vulnerable to outside threats.
- Complex Design
Blockchain is new and different and stands apart from other traditional options. Which makes it harder to integrate into other systems and adapted by users. It will take a considerable amount of time for participants to fully understand all the features of blockchain.
- Lack of Skill
Blockchain app development is still in its infancy compared to others. It’s hard to find someone with expertise and experience to build a blockchain application. There are just a few blockchain app development companies in the market that have full life cycle experience from building to launching a blockchain app.
Blockchain Project Idea for Businesses
Blockchain has countless applications and businesses are eager to adopt this new technology for their work, but how do they use it? Here are some blockchain project ideas for businesses.
- Verify Goods
Most businesses that sell luxury items or jewelry often face this issue. They can provide proof of authentication but it’s hard to believe them. Using blockchain technology, we can create a system in which customers can add serial number to it and it will provide total history of the goods.
- Track Shipments in Real Time
Everyone has used location-based tracking for their shipments, but it can be faked too. By using blockchain technology, we can remove doubts and provide accurate information on certain shipments. The data inside blockchain cannot be changed or tampered with and it is useful for providing correct information to the customer.
- Finance and Banking Sector
One of the most vulnerable industries that are targeted by cybercrime on a daily basis is the financial and banking sector. Many banks are currently adopting blockchain technology to create a safe environment for their customers. By using blockchain, we can safeguard every financial data in the network.
Sending or receiving money internationally always causes issues for users. Some platforms that offer these services charge extra and there is no guarantee of safety or privacy. Blockchain technology uses cryptocurrency which cannot be hacked and is unbreachable.
Blockchain in business will create a transparent and trustworthy environment for everyone. It will keep the information safe and secure. It will save expenses in the long term while keeping the data secure away from data breaches. By hiring a blockchain app development company, we can build our own blockchain application that provides seamless solutions and streamline work processes. Vrinsoft is one of the leading blockchain developer in the market with real world experience. Visit our website to find more information regarding blockchain development solutions for businesses and enterprises.