Blockchain Software Development: A Pathway to Success in the Digital Age

Created in 2009 and rapidly gaining popularity in the technology industry, blockchain technology has proven its power with an incredible impact on many fields. Unfortunately, only a few individuals truly comprehend the meaning of this sophisticated network. The remarkable development of cryptocurrency, particularly Bitcoin, has brought blockchain technology to the public’s attention in recent years. Many individuals often claim that Bitcoin embodies the definition of blockchain. Correct, but not complete.

The blockchain industry, after many years of improvement along with the development of the latest software development technologies, has gone beyond the standards you once thought. Nowadays, more and more blockchain solutions appear to serve software development due to their outstanding advantages in security and efficiency.

The blockchain platform is famous for its high security to the point that it cannot be hacked. Is this a correct assessment of this future technology? Discover the truth behind blockchain software development in the digital landscape right in this article.

Blockchain technology, to put it simply, is a decentralized and distributed ledger network that securely records and verifies transactions across multiple computers or nodes. Considered an advanced database mechanism that does not have centralized elements, blockchain creates a tamper-resistant environment that stores large amounts of information in a completely open and transparent manner.

In blockchain platforms, detailed information about records and transactions is digitally formatted and collected into blocks, forming a chain in a sequential and chronological order. Blocks are created continuously every time new information is recorded because of the limited capacity, which can vary depending on the blockchain protocols used.

Each block contains a unique and unchangeable cryptographic hash that links the new block to the previous one, forming an unbreakable information chain. As a result, blockchain networks create built-in mechanisms that are consistent and immutable, enhancing security and authenticity for all kinds of recorded data, such as tracking orders, accounts, payments, and other transactions.

Likewise, blockchain software development is defined as the process of developing, designing, and implementing software solutions using blockchain technology. To create complete decentralized applications (dApps), core blockchain developers are responsible for getting involved in creating and managing smart contracts, distributed applications, needed tools, and technologies that utilize the capabilities of blockchain networks.

Blockchain architecture refers to the structure and design of a blockchain system. It is the blockchain architecture that determines the functionality, performance, scalability, and security of a blockchain app. There are many types of blockchain architecture that have different use cases and characteristics. Among them, public blockchain, private blockchain, consortium blockchain, and hybrid blockchain are the four most popular types in the blockchain ecosystem.

The integration of any technological advancement can have a profound impact on business operations and software products. These influences may or may not be good. Blockchain is no exception. It is undeniable that blockchain technology is a huge step forward in the field of technology and human society. However, there are still pros and cons for businesses regardless of size, which we will discuss further in this section.

Building Trust between No-relationship Entities

Blockchain applications encourage trust between no-relationship entities, although the definition of “traditional trust mechanisms” may even be lacking or unproven in this digital environment. This statement may appear nonsensical, but it is actually true. Based on its inherently decentralized nature, blockchain eliminates the need for an intermediary or centralized authority involvement in implementing processes.

Instead of depending on individual entities, trust is built through cryptographic algorithms and mathematical proofs. Any new transaction or data entry record that arises will be recorded by the blockchain system and become visible to all parties. This transparency ensures that all participants in the network, even without a direct relationship, can still access the same information and share the same goals.

Enhancing the Level of Security and Privacy

Permissionless blockchain network is difficult to hack or subject to the negative impact of cybersecurity risks. The operating principle and nature of blockchain technology can explain this. Characterized by a decentralized network operating under a distributed consensus mechanism where not just one but many participants will simultaneously maintain and validate the platform, blockchain makes it difficult for any entity intending to penetrate and manipulate the system without permission.

Unlike traditional conventional computer systems that store data on servers, real-time data existing in blockchain networks is recorded and stored across multiple computers or nodes. By using advanced cryptographic algorithms and consensus mechanisms, blockchain helps businesses track and trace the movement of assets or goods throughout every process, adding a significant layer of security to the application and enabling efficient auditing.

Not only that, once the information is recorded, there is no way for even participants to alter or remove it. The failure to find the vulnerability to a single point of failure in this complicated network causes many malicious actors to succumb to exploiting information for improper purposes.

Shortening Time Spending on Transaction Processes

Unlike traditional transaction systems, which are paper-heavy and human-depending, blockchain platform helps businesses streamline operations more effectively by leveraging its unique features. With blockchain technology, a transaction is completed within less than a second. How come?

By using smart contracts, blockchain automates and enforces the execution of transactions and agreements whenever predefined conditions are met. Users can authenticate their identities quickly using blockchain-based digital identities rather than going through lengthy verification procedures. This automation helps businesses reduce administrative overhead, eliminate the role of third-party intermediaries, and improve the overall transaction speed for participants, especially in cross-border transactions.

Besides the advantages of automation, the blockchain network, with its high level of transparency, also helps users more easily share data and collaborate between parties. While traditional methods require data exchange and reconciliation manually, blockchain provides only one source of truth and grants access to all participants within the network. Making this entire transaction transparent helps users reduce human-made errors and minimize delays.

Maximizing the Financial Strategy by Automation

Based on a study of Santander FinTech, distributed ledger technology could save the financial services industry between $15 billion and $20 billion annually by 2022. Applying blockchain technology to the operating system truly brings cost advantages. Instead of handling financial tasks manually, blockchain technology, with the self-executing smart contracts and decentralized nature, automates all processes and reduces delays and communication errors, leading to cost savings while ensuring performance.

Eliminating intermediaries also helps organizations minimize overhead expenses by narrowing transaction costs. Because of the peer-to-peer networks, businesses that need to transact globally and instantly can now receive payments through cryptocurrency and pay fewer transactional costs without any hurdles.

Furthermore, with outstanding features of immutability and transparency, blockchain enhances security and reduces all types of cybersecurity risks, such as fraud or data manipulation. Implementing blockchain now helps businesses avoid costly disruptions caused by cyberattacks or unauthorized modifications to records before they happen.

Scalability Challenges

Similar to the evolution of big data, blockchain network is also developing at an increasingly dizzying pace. As the number of participants joining the network increases over time, the scalability issue becomes more evident. It heavily impacts the smoothness and transaction processing speed of the blockchain platform. Blockchain’s inherent design and consensus mechanisms are the two main factors causing this undeniable challenge.

Essentially decentralized applications, blockchain requires every user in the network to be responsible for validating and storing a copy of the entire blockchain when conducting transactions. This redundancy undeniably ensures security and data integrity for blockchain. However, it also results in increased storage requirements. The story becomes more complicated as the blocks are filled up quickly by every participating node, along with the growth of the number of transactions. When the block storage capacity reaches its limits, there will come a point when the blockchain network becomes overwhelmed, affecting the processing capabilities of individual nodes and hindering scalability.

Not to mention the network latency caused by the reliance on peer-to-peer communication of blockchain. Forcing nodes to communicate with each other to validate transactions makes geographic distance and network congestion suddenly matter and slows down the transaction processing time, affecting scalability. Fortunately, several solutions, such as proof-of-stake and Lightning Network, are gradually improving the scalability present on blockchain platforms.

Complexity and Implementation Struggle

Implementing and operating blockchain systems is more than a complex journey, especially for startups. Similar to other types of custom software products, businesses need to be equipped with extensive knowledge of this advanced technology before embarking on the process of building blockchain software development from scratch. After the requirement for technical expertise comes the issue of expense since developing a blockchain solution involves significant resource requirements and costs. The growing massive data volume forces businesses to invest heavily in infrastructure and related tool setups.

Where there is a need to integrate blockchain technology into existing applications, businesses may require utilizing interoperability protocols or even developing new custom solutions to ensure interoperability and compatibility between different blockchain platforms and legacy systems. Issues associated with security considerations, such as encryption and secure key management in the operation of such platforms, can add complexity to blockchain implementation. Although data vulnerability is rare in blockchain, this cannot help but happen. Blockchain, without regulatory oversight and a centralized party to interfere, can cause trouble for businesses if, unfortunately, involved in data protection, privacy, and anti-money laundering laws.

Energy Consumption

Not all blockchain solutions have the same energy consumption. The energy consumption of blockchain networks is mainly attributed to the consensus mechanisms used, like proof-of-work (PoW) algorithms, which require considerable computational power. Bitcoin is a popular blockchain network that exemplifies this. In order to receive the corresponding amount of cryptocurrency, the miners are incentivized to solve complex mathematical problems that require computationally significant power and energy consumption. Prolonging this over a long time, along with an increase in the number of miners in the future, makes these complex mathematical problems seem like simple problems, but in fact, they are not. This high energy consumption can be seen as a drawback from an environmental standpoint.

Nowadays, with the development and improvement of blockchain, more and more other consensus algorithms appear that have solved the energy-wasting problem. Private networks that limit the number of nodes within the network are a typical example of this situation.

Building blockchain applications may vary from business to business depending on the purpose and distinction. By ignoring initial steps like identifying blockchain trends, use cases, and requirements, this section concentrates on primary periods that are highly specific.

Blockchain is a groundbreaking technology that offers a new way of managing databases and ensuring secure transactions. With the rapid development of digital transformation in recent years, blockchain technology has gradually overcome its shortcomings and promises to achieve many other significant milestones shortly.

If your business has the desire to be part of this blockchain revolution, don’t hesitate to make it happen today with your own blockchain software. A good quality product is indispensable without the help of a capable development team. However, hiring a qualified blockchain software developer these days is more than a complicated task due to developer shortages and cost requirements. As in every other field, businesses, regardless of size, are fiercely competitive in recruiting personnel. To solve this problem as quickly as possible and create a competitive advantage over competitors in the same segment, Orient Software is here to help.

With more than a decade of serving customers in diverse fields of operation from around the world, Orient Software provides a variety of different services, including blockchain development, and confidently fulfills what clients lack for a successful project. At Orient, we apply Agile software development methodology to optimize the production process and promote seamless collaboration between customers and dedicated teams, thereby implementing a product that creates partner satisfaction. Kick off your project and maximize its potential by contacting us now!