We are here with this blockchain app development guide to help you with all the major technical and business aspects of the technology.
The answer to How to develop a Blockchain application starts with what it even means. Blockchain, in a layman’s language, is a decentralized, transparent, immutable and publicly accessible database where digital information (transactional record) is stored in blocks and are paired to each other with hash function, such that the current block has the hash code of the previous entry and the next block will have the hash code of the current block.
On the business side, it’s an exchange network for transferring value from peer to peer. It is a mechanism that authorized a transaction and makes it valid from the legal perspective, without involving middlemen.
Types of Blockchain Systems/Solutions
The answer to how to develop Blockchain application starts with the categorization of the Blockchain solution type –
- Cryptocurrency support
Types of blockchain based on Networks
When talking about blockchain development based on network, you can either go for permission less blockchain solutions or permissioned blockchain solutions.
- Permissionless Blockchain: In permissionless blockchains, the whole network in publicly accessible on all the computers and devices. Anyone can access the code, start running a public node on the local devices, initiate an interaction in the network, verify the transaction, and that also while remaining anonymous. In short, the blockchain which is decentralized, equally accessible and anonymously available is said to be Permissionless. Eg: Bitcoin, Ethereum.
- Permissioned Blockchain: It refers to a closed ecosystem where only the authorized participants can act, based upon their particular roles. These types of blockchains are established on a set of rules that govern how a transaction will be implemented to cater the need of a particular organization (for eg: for database management, for auditing, etc.). Eg: Multichain.
However there are 2 types of blockchain, but when it comes to public and private on permissions, the types get further classified as public and permissionless, public and permissioned, private and permissionless, and private and permissioned.
What enterprises are looking for is a private and permissioned blockchain network. Private and permissioned blockchain can also be termed a consortium blockchain.
This type of blockchain system provides core functionalities of the blockchain architecture, like automated data synchronization, immutability, ability to deal with multiple permissions, process automation, and stringent privacy and security features to name a few, and thus pave the way to build more efficient and data-driven business model at a lower cost.
Types of Blockchains based on Cryptocurrency Support
Based on the cryptocurrency involvement, Blockchains are broadly categorized as Cryptocurrency based and Non- cryptocurrency based solutions.
- Cryptocurrency based Blockchain: As depicted by the name, these types of blockchain solutions run based upon the cryptocurrencies. The popular types of blockchains that fall into this category are:
a. Wallets: These are secure digital wallets that hold the public or private keys with which one can send, store or receive cryptocurrencies. Also termed as Cryptocurrency wallet or crypto wallet, this blockchain type is mainly related to the conversion and trading of cryptocurrencies in a centralized, decentralized or hybrid scenario.
b. Crypto Exchange: These are basically the blockchain systems used to trade cryptocurrencies or digital currencies. They accept credit card payment, postal money orders and other forms of payment and send the cryptocurrency into your cryptocurrency wallet. They are also called Digital Currency Exchange (DCE) systems.
c. ICO: Initial Coin Offerings (ICO) or Initial Currency Offering (ICO) is said to be a crowdfunding system that deals with the generation and selling of cryptocurrencies/crypto tokens.
d. Dapp: A decentralized app or dApp development service is one that deals with apps that is not controlled by a single entity. It can be run by multiple users on a decentralized, P2P network in real-time with the help of trustless protocols. Augur, Golem and Sia are the best examples of what a dApp development company can bring into existence.
- Non-cryptocurrency based Blockchain: This type of blockchain app development services solutions do not depend on crypto tokens. Considered basically for inventory management, this blockchain type is based on Distributed Ledger technology (DLT).
Wondering what Distributed Ledger Technology is? From a technical perspective, it is a database distributed across various nodes and computing devices. Here, each node has a replica copy of the ledger and can process it independently. And the most impressive thing is that the ledger is not governed by any central authority.The changes can be made on an individual level and then the node is voted to gain maximum approval. This process of voting where the consent from the majority is necessary for making update is called Consensus. Once the consensus limit is reached, the changes are directly made across the database.
Factors to Consider for Blockchain App Development
- Nature of Platform: While some blockchain platforms are cryptocurrency based, others are relying on smart contracts or using more than one crypto token. Determining which type is apt for you will make the Blockchain applications development process easier.
- Smart Contracts: The second thing you need to pay attention to is to determine if you need a smart contract or not. A Smart contract, as you might know, is a self-executing protocol that processes, validates or enforces any trigger-based action stored on the blockchain system.
- Consensus Protocol: Different blockchain development platforms work upon different consensus protocol, including Proof of Work, Proof of Stake, Proof of Elapsed time, Proof of Burn, etc. So, identifying the right platform on the basis of consensus protocol is also favorable situation.
- Cryptocurrency: The next thing that you need to consider when answering How to develop a Blockchain app is whether you need the use of cryptocurrencies in your mobile application or not also plays a pivotal role in finding the right platform.
We hope you found this blockchain app development guide useful!
With all the above-mentioned information and examples, you must have started crafting your own blockchain app development idea. Have you? We would love to listen and contribute to your idea. Let’s meet and discuss!
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