What Is A Blockchain?
It’s a technology that keeps records and enforces contracts through cryptography, making it extremely difficult to alter or erase data. In addition, this system allows participants to share workstreams by tracking all changes on a shared ledger.
Think of it as a centralized database where all participants can track everything. This system makes it easy to follow all activities, allowing easier monitoring and decreasing human error.
Blockchain technology is frequently noted as a distributed ledger. Like an accounting ledger, this keeps a history of all transactions, and each transaction affects its final state.
Blockchain networks are usually distributed among participants. This network is called a consortium network. It gives each partner or those involved in the system visibility into every transaction occurring on the network. This provides transparency on both ends of the network.
A consensus is used to establish rules to ensure that data is consistent among participants. Doing this prevents anyone from modifying anything without it being recorded.
How Does It Work?
There is no central authority when using a blockchain. Thus, the data in a blockchain represents a specific state. This is why digital tokens like cryptocurrency are a good fit with blockchain technology. To give you a brief idea, here’s an example.
A coin can only be in the hands of one person at a time. So, if the coin is in your hands, the state of ownership of the coin is yours. However, you may choose to give the coin to someone else, and by doing this, the state will change to the person you gave the coin to.
How Can You Trust The System?
As mentioned earlier, blockchain technology uses a consensus mechanism to validate and agree on the data across all blockchain nodes. Therefore, all participants in the system have their blockchain nodes. So, for example, if you transfer ownership of a coin to your friend, you cannot transfer ownership of the same coin to a different colleague.
Therefore, consensus ensures the correct order of transactions and the integrity of the blockchain.
The public can access blockchains or stay private, and the difference is determined by who can and cannot participate in the network.
There is no single authority on the network for public blockchain types, and all transactions are visible by any node on the system. For example, the Bitcoin blockchain network is under this type, and anyone can view all transactions. You can view the latest Bitcoin blocks and transactions using a block explorer.
Public blockchains use cryptocurrency as a reward to validate blocks. Therefore, they may charge a cryptocurrency fee for validating such transactions. It is worth noting that a public blockchain’s privacy is quite limited, so if you want to keep your transaction private, you must only share your public key with the other participant involved in the transaction.
On the other hand, private blockchains are only accessible to participants invited to the network. These are also called semi-trusted networks, where the agreement between all participants is required to leverage the blockchain.
One example of a private blockchain is a consortium blockchain. Transactions can be kept confidential from the public because they can restrict who has the authority to participate in the consensus.
When Should You Use It?
There are specific scenarios that work best for establishing blockchain technology. You have to consider four crucial factors: the participants, the performance, business logic and trust. Let’s check each one below.
When it comes to participants, you have to ask the following questions:
- Are you supporting multiple partners of companies?
- Do you plan on avoiding a central authority? Or do you wish not to be reliant on a third party?
- Do you share data or use a workflow that involves some or all of the participants?
In terms of performance, here are the questions you have to ask.
- Are your transaction throughputs low?
- Is there a well-defined business logic when interacting with other business partners?
When it comes to business logic, here are the questions that need to be asked:
- Is your business logic simple?
- Is it static and doesn’t change?
In terms of trust, here are the most critical questions:
- Are faith and integrity required between the participants?
- Does the order of transactions matter?
- Do you need privacy regarding the transactions?
If your response is “Yes” to the majority of the questions listed above, it would be a good idea for you to use blockchain technology for your business.
Nowadays, blockchain app development is what a lot of blockchain developers do. A blockchain app developer builds apps on top of blockchain clients instead of creating an entire blockchain from scratch. In a way, this is the same as what web developers do. They build web applications on top of web browsers.
Five Steps To Take
When building a blockchain app, you need to take several steps, and the first step is clarifying your idea. You should be able to evaluate if your business or organization needs blockchain in the first place because many can live without it.
Second, you have to do your research. You need to look at the current market and analyze how you can be better than others. Again, it will significantly help if you have already figured out your niche.
Third, you may now look at options after knowing your niche and the current market condition. As of now, there are four ways you can build your decentralized app from a technical standpoint. First, you can use an open blockchain like Bitcoin and Ethereum for your application.
You can also create a private network with the help of blockchain software. Blockchain as a service (BaaS) options are available nowadays, like Amazon and Azure. Or you can also build your blockchain network the platform you find most suitable for your business or organization.
Choosing the platform for your blockchain app will significantly influence the skill set you need from your development team selected. Many platforms use conventional programming languages like C++ and Java, but other languages are not yet as well-known, like Solidity from Microsoft and Simplicity.
There are five stages in the development level of the blockchain app. The first stage is business analysis, which will describe every detail of the development process. It includes the information of the people responsible, the business requirements, expectations and goals.
The second level is the design which is around eight to twenty per cent of the total budget.
The third level is the preparation stage which includes setting up the development environment, the application programming interface, backend details and architecture.
The fourth level is the development stage of the app and quality assurance. This is done right before deployment when a quality analyst engineer runs a full regression test to check if everything works correctly.
The fifth and final step is deployment. For an app to be considered successful, it must comply with all the rules and conditions of the App Store if you are an Apple user and Google Play Store if you are an Android user. Once the app is deployed, the performance data and user analytics are also monitored and considered to improve the app.
Maintenance is required to maintain the app’s functionality and security. In addition, updates are needed to support newer versions of operating systems and libraries.
If you plan to integrate a blockchain app into your organization or business but have no idea how and where to start, you can check out Rapid Innovation for more information.
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