How to Develop Scalable Blockchain Solutions for Enterprise Applications?
Introduction
Blockchain emerges as a beacon of promising technology, especially for enterprise-grade applications. Due to robust parameters like traceability, interoperability, and transparency, industries highly adopt it to develop scalable blockchain solutions for enterprise applications. However, scalability issues in blockchain remain a significant roadblock stopping enterprise-grade applications from achieving it. Hence, employing the right techniques to encounter scalability challenges from the beginning becomes imperative.
According to research, nearly 53% of organizations think Blockchain is crucial in optimizing their internal operational process. However, development comes with its own set of challenges and complexities. Overcoming these challenges needs careful consideration and adhering to blockchain best practices.
The latest Statista report reveals the blockchain market size is likely to grow and reach an estimated 167 Billion Dollars by the end of 2027. Businesses of every industry vertical are recognizing the growing potential of Blockchain for enterprise applications. Industries like Banking, Finance, healthcare, and supply chain have started repeating their benefits. It’s time to dig in!
Understanding Enterprise Needs
Enterprise-grade applications differ from commercial applications or those ideally designed for customers. Applications designed to carry out internal business operations need robust security, scalability, and interoperability. Many Organizations are facing these hurdles while implementing blockchain into their enterprise grades.
The term “scalability” essentially refers to the ability of a Hardware system to process, manage, and store information. Scalability in blockchain refers to the ability of the Blockchain network to process transactions throughput. Organizations are majorly facing scalability issues, especially in processing multiple transactions in a Public Blockchain system. It is more prevalent in real-life commercial situations.
Blockchains need immense computing power, high-end internet, and robust hardware capacity to store the data. Transaction throughput and advanced computing storage remain a pressing concern in the development of blockchain solutions. Hence, there is a significant need to meet the expected Quality of standard(QoS) in executing a public Blockchain system. Enterprises need to resolve such complexities with proactive measures and enable strategies and techniques to address that.
Why is Scalability in Blockchain important?
Scalable in blockchain refers to the capability of a blockchain network to process a large number of times in real time. At the same time, scalability is a key criterion in Blockchain solutions to ensure it outperforms the traditional platforms. Hence, scalability is the core factor that defines the success of Blockchain enterprise apps. Furthermore, developing scalable solutions is inevitable for the future growth of this promising technology.
On the other side, there is an ongoing Blockchain dilemma that suggests that increasing the scalability can lead to noteworthy compromise in security aspects and decentralization. Hence, the question may arise in your mind: is it viable to develop a blockchain solution without compromising on its security? The answer is yes. You can raise the scalability bar of the blockchain networks without compromising on the security parameters.
With the right strategy, you can unlock your road to developing scalable Blockchain solutions. Let us discuss how.
How to develop scalable Blockchain solutions for Enterprise apps? Key Strategies and Considerations
To develop scalable solutions the first and key step is to understand the requirements and needs of the enterprise app. This will help the business define the project scope and purpose of your blockchain app. Moreover, it will help the technical team to choose the best Blockchain platform and the Blockchain features in your enterprise app.
More importantly, to address the scalability issue you can follow the core approaches to resolve any scalability issues. These approaches are key strategies for improving scalability in blockchain enterprise solutions.
- Understand the Fundamentals and Project Scope
Before proceeding with your Blockchain project, it is important to understand the fundamental blockchain principles like proof of work, consensus mechanism, decent, etc. define the purpose of the technology to meet your Enterprise needs. Ensure the blockchain solutions serve the reason for your investment- which is scalability.
- Choose the Right Platforms
The right platform can align your enterprise needs with Blockchains. Choosing the appropriate Blockchain platform is crucial to ensure scalability with security. Choose based on the consensus algorithms, and community support. Popular platforms like Ethereum, Hyper Fabric Ethereum, and IBM are robust platforms providing scalable environments to develop and Deploy Blockchain applications.
3. Choose Scalability Oriented Architecture -
Layer 1 Scalability
Layer 1 scalability is the most common approach in resolving any scalability issues in the enterprise app. This approach makes necessary changes in the Blockchain network software. It makes changes in the blockchain protocols in two ways. Firstly, it increases the transaction throughput by eliminating the limit on the Blockchain node size and decreasing the time taken to verify the blockchain node. The Layer 1 scalability is also referred to as an off-chain scaling solution. Hence, it follows the approach of Sharding, Hard fork, and segregated witness.
Sharding ensures the large blockchain node is into smaller segments of data known as Shards, each shard can process its transaction. Instead of processing the entire block, smaller chunk shards are processed parallely. Hence the processing output will be increased gradually.
Hard forking is another lucrative technique that aims to act as a prerequisite in optimizing any scalability concerns. It introduces a new consensus mechanism or changes in the validation of the transactions. This approach has some unpleasant repercussions but can be used when the soft fork technique cannot be executed.
Layer 2 Scalability solutions
The feasibility of Layer 1 solutions relies on making changes in the main blockchain network software. However, the outcome of the question “How to resolve the scalability challenges in Blockchain “comes down to the emerging use of “off-chain solutions”.
State channels
State channels are an effective technique to boost transaction speed and capacity. You must be wondering how the layer 2 solution optimizes scalability challenges. State channels enable two-way channels between the transaction channel and the network without directly involving the network. After the state channel transaction is completed, the relevant blockchain records the final series of transactions. Hence, it reduces overall network congestion.
Plasma
Plasma is another effective solution to address scalability challenges in Blockchain enterprise apps. Plasma utilizes the child nodes and network that extend the Parent blockchain node acting as an individual blockchain node that optimizes transaction laid and traffic. Plasma can be used in cases where transactions involve processing transactions in a similar way where security is paramount.
4. Consensus Mechanism Algorithms
Consensus mechanism techniques are yet the turning point in delivering an effective tool for overcoming scalability bottlenecks. Conducting Proof of work is a highly resource-intensive process that consumes a lot of storage space. Hence it may not be as effective in managing high transaction throughput.
Delegated proof of State
Delegated proof of work functions as a democratic process from the Blockchain network. Token holders can choose who will validate their transaction but won’t have to do it themselves. Hence, these number of validators will be elected as authorities who will validate the series of transactions. These validators vary from 10 to 100 at regular intervals of time.
Proof of authority
This is a sophisticated consensus mechanism algorithm in which a chosen group of validators will validate the transaction using the consensus mechanism algorithms. The approach is a viable option to scale enterprise blockchain applications.
Blockchain network and Transaction processing capabilities
Embracing off-chain solutions can significantly improve the scalability of your applications. These off-chain scalability solutions like Delegated proof of stake and proof of Authority can manage the traffic of a growing user base by increasing the transaction processing capabilities.
5. Optimize Smart contracts
Smart contracts are an underlying infrastructure that operates the entire blockchain network. Optimizing smart contracts will improve transaction speed and reduce gas expenses. It will improve code efficiency and help to build scalable blockchain applications.
6. Deploying Cloud Infrastructure
Cloud infrastructure offers immense flexibility and scalability. By deploying your blockchain applications to cloud storage, there are enough resources and computing capabilities to manage the emerging user base and traffic efficiently.
7. Interoperability for greater scalability
Interoperability is crucial for enterprise-based blockchain applications as it helps a blockchain network interconnect with other blockchain applications. It allows blockchain to connect with other disparate networks streamlining workflows and increasing network efficiency
8. Find a Scalable Distributed Ledger
Blockchain is a part of a vast distributed ledger with numerous blockchain nodes interconnected with each other. However, it is important to find other distributed ledgers to optimize the transaction load and speed in Blockchain applications. By looking for DLT alternatives that vary from the basic blockchain structures and organize data, you build a distributed database that efficiently handles large amounts of transactions.
Best practices to resolve Scalability challenges in Blockchain(2024)
After becoming familiar with the above layer 1 AND LAYER 2 SOLUTIONS, LET US have a look at the best practices to help your organization stay aligned with the latest blockchain best practices.
Embrace off-chain solutions
As your application grows you should encounter scalability challenges. Address it hands-on by embracing off-chain solutions and efficient techniques like Plasma, sidechains, state channels, and scalable consensus mechanisms. The right architecture can play a major role in shaping your applications to manage their ever-evolving needs with an optimized performance.
Use Advanced Monitoring tools
Use a monitoring tool to keep a tab if your blockchain solutions can handle the load of emerging traffic and transactions. Leveraging blockchain tools will help you adapt to an approach that can help you optimize your performance.
Analyze Successful Blockchain Enterprise applications
Check the latest companies that blockchain applications. Learn from their strategy and how they have successfully developed a scalable blockchain solution. This will help you create a solid roadmap for you to navigate your way up.
Conclusion
Developing a scalable solution requires a deep understanding of blockchain technology and its fundamentals. You can choose the right platform and constant proactive measures to meet your scalability needs. Furthermore, it requires composite expertise, robust techniques, and partnering with a leading blockchain development company. By hiring the best blockchain developers you can By choosing from a comprehensive suite of blockchain development services you can use agile methodologies and numerous scalability techniques.
