Blockchain Development Guide for Developers

 

The term “blockchain” has become increasingly popular among developers and businesses in recent years as more people look for ways to streamline operations, ensure security, and improve visibility. However, the concept has also been misunderstood by many people who don't really know how it can be used or implemented in the real world.

What Is Blockchain Development?

Blockchain development is the process of creating a secure, unchangeable, distributed ledger technology (DLT) that records transactions and tracks assets within a network.

This technology is valuable for a variety of industries because it enables the quick, accurate, and secure sharing of information. Whether you're tracking orders, accounts, payments, production, or other data, a blockchain network offers transparent delivery and storage for permissioned network members.

Decentralized applications have the potential to revolutionize many industries, but before taking advantage of their potential value, you need to understand decentralized ledger technology.

What Is Blockchain?

Generally speaking, a blockchain is a digital ledger that uses cryptography to record transactions and track assets, both tangible and intangible, in a distributed computer network. The transactions, known, as blocks, are recorded, copied, and stored on each server, called a node, that’s linked to the network.

And it is a decentralized database that multiple participants manage; its DLT provides each node in the network with its own copy of the ledger. (And anyone can volunteer their server to be a node in the network.) The technology can identify any inconsistencies in records by verifying them against the other participants’ copies of the record. This capability makes records in a blockchain virtually tamper-proof.

The nature of blockchain technology ensures that all members who access the system receive real-time updates, providing a single source of truth that is both precise and reliable.

How Blockchain Works

Blockchain technology can be used by organizations to securely track and trade anything—without the risk of data falsification or duplicate records. Here’s how it works:

·         Create a block.

When a transaction takes place, it is sent to a network of computers called nodes. Each node verifies the transaction to make sure it is valid. If a majority of the nodes approve the transaction, it is then recorded on a block. (You can decide what information to record in your block—names, places, times, cost, or any other type of data.)

·         Link blocks

Storing data is like filling up a bucket - once it's full, you need a new bucket. In the blockchain database, each block is like a bucket that can only store a certain amount of information. When a block is full, a new block is generated and linked to the previous one with a unique code called a hash. If any transaction is changed in any way, the hash also changes - which makes it easy to spot tampering. This linkage forms a data chain, which shows how the asset moves (either in terms of literal location or ownership).

·         Add to the chain

The way a blockchain works is that all transactions are grouped together and then fixed in that order permanently. Every time a new transaction is made, it's added to the blockchain, and the network uses a consensus approach to confirm the previous block(s), making the entire blockchain more secure. This process prevents fraud and gives everyone on the network peace of mind, knowing that the transaction ledger is accurate.

History of Blockchain: Not Just for Bitcoin

Blockchain technology has a lot of applications, but its first use was in generating the cryptocurrency Bitcoin. People often use the terms "blockchain" and "Bitcoin" interchangeably because of this, but it's important to know that they're not the same thing. Blockchain has the potential to revolutionize a lot of industries, and we're just beginning to scratch the surface of what it can do.

And it is not only providing a secure way to record cryptocurrency transactions, but can also be used to track other assets. When businesses learned about this potential, they began investing in blockchain as a solution for improving their operations. Some of the ways blockchain technology has helped businesses include streamlining operations, breaking down data silos, improving transparency, and reducing transaction costs. Today, you can find blockchain technology being used in a wide variety of industries.

Blockchain Use Cases

Healthcare, real estate, finance, voting, and supply chain are only a few of the many sectors that can benefit from investing in blockchain development. By implementing this technology, these businesses would gain operational efficiency as well as a competitive advantage. Examples of how blockchain could improve these sectors include:

• Healthcare - More secure records of patient data; enhanced trust in the clinical research process
• Real estate - More accurate records of land and property ownership
• Finance - Global payment, tax, and intermediary cost reduction; money laundering protection
• Voting - Prevention of ballot duplication to ensure accuracy
• Supply chain - More accurate tracking of assets from vendors to customers

Benefits of Implementing Blockchain Solutions

Both organizations and the individual developers working for them can realize the following benefits from implementing enterprise blockchain solutions:

·         Increased transparency 

The network validates transactions as they occur. This means that everyone connected to the network must agree that the information related to the transaction, specifically the hash, is accurate. As a result, the complete history of each transaction is visible to everyone in the network. If a single detail in the record changes, it modifies all subsequent records. This ensures that information is always accurate, secure, and available to everyone who is part of the network.

·         Reduced risk of fraud 

Having a complete and accurate record of an asset's history is important for any company, no matter what they trade or sell. If an asset changes hands or locations frequently, it can be difficult to keep track of everything. However, when everything is recorded on a blockchain, you can easily view a complete audit trail. Each previous record of the transaction on the blockchain is unchangeable and prevents fraudulent behavior. This also validates authenticity.

·         Increased speed and efficiency 

Blockchain has the ability to streamline and automate your transactional record-keeping, which will save you time that you would've otherwise spent on tasks of lesser value. Outdated methods such as paper documents, spreadsheets, or third-party systems, are error-prone and inefficient. They often require duplicative efforts to maintain accuracy, which blockchain eliminates through the use of an unalterable ledger that is available to all parties.

·         Decreased costs 

Reducing expenses that aren't necessary is a great way to enable faster growth for your company while also enhancing your bottom line. Blockchain has the ability to eliminate the need for other third-party intermediaries without sacrificing trust or accuracy. Network members work together to verify everything through consensus, so you won't need to spend valuable time reviewing trade documentation.

Blockchain Development Challenges

As the blockchain ecosystem continues to grow and evolve, developers are facing new challenges that must be addressed in order to ensure the security, scalability, and decentralization of the blockchain. This is known as the blockchain trilemma, and developers are working hard to find ways to address these challenges without sacrificing any of these important aspects.

Decentralization

One of the main reasons why industries are turning to blockchain solutions is decentralization. In the world of finance, for example, blockchain allows customers to store and purchase cryptocurrency without giving full control of their assets to banks. Instead, transactions are verified by consensus (a group of notes instead of one individual node). Once these transactions are verified, they can’t be altered.

The main downside of decentralization is that it takes longer for transactions to be confirmed by the network. This is a challenge that blockchain developers are currently trying to solve.

Scalability

Blockchain technology has the potential to revolutionize the way we conduct transactions and store data, but its success depends on its ability to handle increasing demand without compromising speed or security. As block sizes grow, transaction times can slow down, making it difficult for blockchain to keep up with traditional transaction systems.

Bitcoin originally capped the size of its blocks at 1 megabyte in an effort to reduce the risk of cyber threats. However, each coin is capable of recording an infinite number of transactions, with each transaction increasing the size of each block. As a result, blocks could eventually exceed any size limitations imposed on them, further hindering processing speed.

As developers debate whether to increase block size without sacrificing speed, all blockchain applications will be affected. Bitcoin initiated the block-size debate, but all blockchain applications will be impacted by the decisions made by developers.

Security

One of the benefits of blockchain technology is that it is secure, however, this very security is also a challenge for developers. Because people see blockchain as an impenetrable force, it is also a target for cybercriminals. Anything that weakens the security of blockchain will have a domino effect, jeopardizing decentralization and scalability. Without regulatory oversight, there is no centralized party to intervene in the event of a security breach.

Although security breaches are rare in blockchain, people have manipulated known vulnerabilities in its infrastructure. Developers need to be able to create blockchain networks that not only add business value but also assure complete security.

While there are challenges associated with developing a blockchain solution, it’s important to remember that it’s still in its infancy. Technology is constantly improving, making a good use case for blockchain development overall. As the technology improves, so does the potential for blockchain solutions to provide businesses with increased security and value.

How to Recognize When to Implement Blockchain Development

Although blockchain presents many advantages, it’s important to remember that it isn’t a one-size-fits-all solution for every organization or platform. When trying to decide if blockchain is the right development path for you, be sure to ask yourself these key questions:

·         Do you need a place to store data? 

If so, you may not need to jump the gun on implementing blockchain. First, take a look at how much data you’re actually looking to store. For example, if you run a small business, it’s likely not worth the investment, and you can manage by just storing data locally. On the other hand, if you have an enterprise-scale operation that requires mass data storage, maintenance of multiple databases, and access for many users, blockchain can give you a fully transparent, up-to-date ledger that’s easy for everyone to work from.

· Does your data need to be frequently updated and shared? 

If your business depends on ever-changing historical data, you may need a blockchain solution that automates the process of data entry and maintenance. A blockchain solution would allow for multiple entries from a variety of permitted members and would prevent data modification. This would reduce the time-consuming processes associated with manual and paper-based data maintenance.

· Is your business suffering from slow transactional speeds? 

If your company is focused on security over speed, then a blockchain solution would be the better fit for you. Blockchain has the ability to remove barriers that can make workflows slower, but generally speaking, it's not the quickest option when it comes to transactions.

· Do you need third-party authorization? 

If a business needs an intermediary for data control and authentication, then blockchain won't be a good solution for them. On the other hand, for businesses that don't have a third-party solution, blockchain can provide total transparency and consensus validation. Additionally, it reduces the costs and delays associated with using an intermediary for transactions.

Steps to Develop a Blockchain Solution from Scratch

Developing a blockchain solution for your business can be a time-consuming and research-heavy project. But no matter your specific needs or objectives, there are some key steps you'll need to take during the development process.

Step 1: Identify a Problem to Solve

When considering a blockchain solution for your business, it's important to remember that not every problem can be solved with blockchain. You should first take a look at your business needs and compare them to the high-level use cases of blockchain development to see if there is a good fit. If you're not sure where to start, we've explained some of the most common use cases in detail above.

Having a clear and concise problem statement is key when trying to identify which challenges you want to solve. Once you have that, you can then assess whether a blockchain solution is actually viable for your needs. If it is, then you'll need to determine whether you want to migrate your current solution to a blockchain application or build an application from scratch. Keep in mind that both approaches have their own unique set of benefits and drawbacks that you'll need to consider before making a decision.

Step 2: Draft Your Business Requirements

Next, you'll need to come up with a complete set of business requirements to make sure you're covering all your bases. Consider which technologies you'll need both on-chain and off-chain to create a complete ecosystem. This will help you develop a more concrete product roadmap, which will in turn help you stay on track for deadlines and better understand what resources you'll need.

Step 3: Identify a Consensus Mechanism

The next step is to identify a consensus mechanism, a type of methodology used to achieve trust, security, and agreement in a decentralized computer network. There are many consensus mechanisms available, each with its own advantages and disadvantages. Choosing the right consensus mechanism is critical to the success of your decentralized application, but some of the most popular ones today include: 

· Proof of work

· Proof of elapsed time

• ·   Byzantine fault-tolerant

· Deposit-based consensus

· Proof of stake

The consensus mechanism you choose for your business is important and should be based on your specific needs and goals. Spend time researching each option to make sure you select the best one for your business.

Step 4: Choose the Best Blockchain Platform

It's important to choose the right platform for your blockchain application because it will determine which skills your development team will need. The whole process of researching and developing your blockchain application can take some time, so be sure to select the platform that best suits your business needs.

When making your decision, think about the problems you want to solve, the consensus mechanisms, cost, developer requirements, and expected timeline. Doing this will help you make the best choice for your blockchain application.

Step 5: Design Your Blockchain Nodes

There are a lot of factors to consider when choosing a blockchain platform for your business, including whether you need a permission or permissionless network, which programming languages you want to use, and any other elements that may affect development. You also need to decide whether you need a private, public, or hybrid solution to meet your business needs, and where your blockchain nodes will run (e.g., on the cloud, on-premises, or both). Once you've considered all of these options, you can research the different platforms and compare them against your objectives, available resources, and budget.

Step 6: Plan Your Blockchain Configuration

Most blockchain platforms require careful planning for a variety of configuration elements, which may include:

• ·   Permissions

· Asset issuance

· Asset re-issuance

· Atomic exchanges

· Key management

· Multi-signatures

· Parameters

· Native assets

· Address formats

· Key formats

· Block signatures

· Hand-shaking

Remember, some of these elements can be changed later on down the line, but it's always best to plan for success from the get-go.

Step 7: Build Your APIs

Some platforms come with pre-made application programming interfaces (APIs), but others do not. Depending on what you need, you may have to build APIs for:

· Generating key pairs and addresses

· Audit-related functions

· Data authentication (through digital signatures and hashes)

· Data storage and retrieval

· Smart-asset lifecycle management

· Smart contracts

Step 8: Design the User Interface

Once you have the app's design planned out, you can begin working on the user interface (UI) for each software component. The APIs you design will need to be integrated with UIs on the back end. This means that visual designs will impact the app's overall appearance, while technical designs affect the app's underlying architecture.

Step 9: Choose an Accelerator to Optimize Your Blockchain Application

Now that you’ve built your blockchain app, how can you ensure that its deployment will be successful? One way to do this is by using a hardware accelerator, which can enhance performance, provide flexibility, and be more efficient when it comes to power usage.

Accelerators can also help optimize individual components of blockchain technology, such as transaction validation, governance, and data storage. They’re essential for saving both time and storage space, as they distribute transaction loads among several components to increase both transactional speed and output.

So, if you want to give your blockchain app the best chance of success, make sure to deploy it with a hardware accelerator!

Rely on FPGA Blockchain Acceleration for Optimal Performance

Development in the blockchain is a lucrative investment for businesses as it has the potential to mitigate many challenges faced by businesses such as a lack of transparency, inefficiency, and high costs. However, it is important to use the correct technology that corresponds with the blockchain solution to make sure you are getting the most out of your investment.