How to Integrate a Blockchain Technology into Your Project
Businesses everywhere are already scrambling to understand how integrating blockchain technology into their current business practices will benefit them. The main problem businesses face is the a lack of information regarding how this can be done.
Many fear that the cost of blockchain implementation will be too high and will lead to excessive teething problems should they do choose to integrate a blockchain solution into their existing infrastructure. While these concerns are indeed understandable, blockchain implementation for businesses of all sizes doesn’t have to be either expensive or traumatic.
Blockchain technology holds the promise of revolutionizing many of the transaction based processes that underwrite much of the global economy. According to an article published in Bitcoin Magazine, IDC has estimated that global spending on blockchain solutions will reach a total of $9.2 billion by 2021. If this is true, their report highlights that this amounts to a compound annual growth rate of a staggering 81.2%.
With growth estimates such as these being widely predicted, it is little wonder as to why there is such a phenomenal buzz surrounding blockchain solutions today. In this article, I aim to examine in more detail how to integrate blockchain technology into your project and what the benefits will be of doing so.
I will also include examples of current blockchain platforms and businesses that have already begun the process of implementation with the aim of giving better scope of the true potential of this new technology.
Blockchain Explained
Before I talk about the ways in which companies can implement blockchain technology into their projects, it is worth taking a moment to examine how exactly blockchain works.
Imagine a digital ledger that is entirely composed of blocks. These blocks are linked together to form a chain. Every time anyone wants to undertake some form of transaction, and so add information to the blockchain, they need to add an entirely new block.
Once a new block is created, it is added to the end of the chain, forming an unbroken record of block transactions that goes all the way back to the very first block that was ever created. Unlike the way most data is written then overwritten by conventional digital ledgers, the advantage of such a system is that a complete record of transactions is there for all to see.
If, for example, my word processor was operating on this principle, I would be able to track every change I made to this article between each save, meaning that anyone could see how the article was created from start to finish.
Now that’s the basics, lets take a look at the benefits of blockchain. The really exciting thing about blockchain technology is that it doesn’t require any form of centralized control. Rather it operates as a peer-to-peer network that is not controlled by any one party. Each participant in the network is known as a node, and each node has equal control over the ledger.
Whenever a transaction is made on the blockchain, all the participating nodes are required to authenticate and approve the transaction. Since each node has a record of the blockchain, features such as security and transparency are in many ways improved when compared to conventional systems.
The advantages of not relying on a single controlling entity, as well as having multiple nodes maintaining the database, cannot be understated.
When applied to a whole range of processes, blockchain technology can help reduce costs, increase security, ensure better data security, create more trust between companies and their clients, and help automate processes that today take administration staff weeks to complete.
How to Implement Blockchain Technology
The most famous use of blockchain technology is the cryptocurrency. Indeed, blockchain was actually invented by the now legendary Satoshi Nakamoto to allow for the creation of the world’s first cryptocurrency — bitcoin.
Satoshi came up with the blockchain principle to solve the problem that stood in the way of all digital currencies, namely the “double spending” problem. In all systems up until that point, digital currency could be duplicated, theoretically allowing the same coin to be spent more than once.
By decentralizing the network and instead allowing it to be controlled and maintained by multiple nodes that are not even located in the same geographical area, blockchain finally created a viable way to solve this problem.
Use 1: Integrating Cryptocurrency Transactions
I recently wrote an article for the DevTeamSpace blog detailing the “10 Best Bitcoin Payment Gateways for 2018”. In this article, I stressed the advantages of businesses allowing customers to pay in bitcoin and other altcoins.
Any application or website that either sells products, charges membership or subscription fees, accepts donations, or any other kind of payment, can benefit enormously by having a cryptocurrency payment gateway integrated into it.
Adding some form of bitcoin API to your new app will not only help to boost income by drawing in all those people who like to pay in bitcoin, but will also help your company to save money as most payment gateway transaction fees are lower than the credit card fees charged by the banks, etc.
Since cryptocurrencies such as bitcoin offer anonymous transactions, governments and CEO’s of all the industries that are threatened by these digital currencies are fond of labeling bitcoin as only being good for drug dealers. This is simply not true.
Many companies that includes those that offer discreet services such as adult toys, for example, are finding huge benefits in allowing their customers to pay in cryptocurrency. Since most people often don’t want such transactions to appear on their monthly credit card statements, cryptocurrencies are often viewed as a much-welcomed method of payment.
Use 2: Smart Contracts
The use of smart contracts, as championed by such organizations as the Ethereum Project, offer companies access to an enormous range of tools to improve their projects. Smart contracts allow for legally binding agreements to be drawn up between two or more separate parties.
These contracts allow for a much greater level of anonymity and remove the need for a 3rd party, such as a lawyer, for example, to help execute the transaction. A list of fulfillment criteria can be built into the contract and once these are satisfied, the contract will automatically initiate a set of actions without any need for this to be done manually. Actions could be anything from initiating a payment to validating marriage documents etc.
For more information on the potential uses of smart contracts read this article.
Smart contracts can be used to facilitate a massive amount of different transactions. They are set to allow many of the processes that institutions ranging from the finance sector to medical research to be streamlined through automation. It is for this reason that smart contract development is now the focus of many top blockchain developers.
For a more detailed look at how exactly these contacts function and how companies can deploy them read my article “10 Uses for Smart Contracts”.
Dev teams are racing to develop smart contracts in Solidity, a language that is designed to work with the Ethereum Virtual Machine (EVM), in order to find solutions to specific industry needs. If you are interested in reading an example of how to write and deploy a smart contract on Ethereum then you can read Hacker Noon’s article on Full-stack smart contract development.
The great thing about smart contracts is that much of the hard work has already been done by the Ethereum Project. This means that even small to medium-sized businesses can begin to implement blockchain based smart contracts into their projects without needing to employ huge development teams.
Since the Ethereum platform allows smart contracts to be run on its platform there is also no requirements for companies to have to set up a blockchain network either. This means that companies can launch their smart contracts as soon as they are ready.
Use 3: Integrating Smart Devices with IoT
The other really interesting avenue, which many companies are exploring in regards to integrating blockchain into their projects at the current time, is securing IoT networks. IoT allows networks of smart devices to be interconnected to help benefit the users from this interconnectivity.
Most of us use IoT already as it is employed for much of the processes that allow our smartphones to control other devices such as our TV’s. Each time you sync your phone with an external speaker you are reaping the benefits of using an IoT network. And this is just the most simple example. IoT can be used to facilitate complex smart homes, fully automate transactions on supply chains, and one day could even be used to fully automate life inside the spaceships we use for trips to Mars.
In order to give a better picture of how blockchain technology can be implemented into existing/future projects, I am going to look at how blockchain solutions are set to benefit the banking industry.
Case Example: Blockchain for Banks
Banks are complex institutions that have numerous arms or divisions which allow them to conduct business in a in numerous areas of finance. Banks are able to offer customer services such as loans, mortgages, etc. while also conducting trade finance and other such activities.
Aside from the much-debated incentives of banks creating their own cryptocurrencies, they stand to gain enormously from implementing blockchain solutions such as smart contracts and blockchain based IoT networks.
Smart contracts could be employed to help automate many of their key processes. One such example is mortgages. When a customer found a property they wished to purchase, they could approach the bank, who would then set up a smart contract.
Since the bank already possesses the customer’s entire account history, the first step would include the smart contract establishing their suitability for the required morgage. Once this has been done, the contract could then initiate a payment to the seller for the property.
This, in turn, would initiate a transfer of the deeds to the buyer and the activation of automatic mortgage repayments from the buyer’s account. These would continue until the mortgage was fully repaid, at which time the smart contract would deactivate the repayments and end the contract.
The automation of this one process could save banks $10’s of millions of dollars every year by reducing the administrative staff needed to process such transactions manually. Smart contracts would also lower the risk of mistakes as well as fraud too.
Putting together the right development team
The key to successfully implementing a blockchain technology into your project is having the right team to do so. Too many managers make the mistake of just offloading projects onto their existing development teams without properly considering the consequences.
As I have already stated, blockchain is a relatively new technology that requires a unique skill set from other types of software development. Any developer working on blockchain will need to be familiar with such things as cryptography, how decentralized peer-to-peer networks operate, organizations like Ethereum and how they host smart contracts, etc. etc.
It is for this reason that any team should incorporate at least one experienced blockchain developer as well as developers who have the skills and passion to undertake blockchain development. Any team working with smart contracts should be able to code in Solidity, be familiar with blockchain API’s, and the current platforms offered by blockchain companies to help aid development etc.
A good blockchain developer will be aware of platforms such as BigchainDB, which aims to solve blockchain’s scalability problems, and Hyperledger, a platform that allows for the easy creation of private permission only blockchains, and so on and so on. .
Another interesting area is cloud-based blockchain development. Companies such as IBM, Amazon, and Microsoft are now offering development spaces on their cloud platforms. Known as Blockchain as a Service (BaaS), this service is bringing together companies and developers to create viable blockchain solutions for their particular business needs.
The use of platforms such as these can help companies save money as well as helping to get their blockchain projects up and running in much less time.
Projects such as Unibright are now promising companies to bypass developers completely as they don’t require any coding, though the promise that such frameworks offer are still some way off being able to provide effective solutions for more complex projects.
For this reason, I strongly recommend employing a dev team that is expert in blockchain deployment. Though costing a little more upfront, often a good development team will, in fact, save time and money as the risk of problems is greatly reduced.
My Final Thought
Though in this very short article I have only been able to touch briefly on this fascinating topic, I hope that it gives you some idea of how to go about integrating a blockchain technology into your project. The simple fact is that most companies have processes that could benefit from the added security and automation that blockchain solutions offer.
It might be a little time before off the peg blockchain solutions are commercially available, so the companies that want to get ahead now need to undertake the process of development and implementation themselves.
As I said in the last chapter, companies can smooth out the whole process of blockchain solution implementation by making sure that they have the best possible development team working for them. After all, developers remain an essential key to your project’s success.
Originally published at www.devteam.space on March 13, 2018.
