Blockchain technology is one of the more revolutionary advancements of our age.
Decentralised networks are allowing for more freedom from centralised systems that monopolise access to our data. Web 3.0, as it’s now being called, is being driven by blockchain application development on decentralised networks such as Ethereum. These networks allow for peer-to-peer connections giving users back the power over how they connect with other people, access their money, or communicate information. One of the more popular uses of blockchain technology is the transfer of funds across borders without needing to wait five working days and incurring fees to send and receive money.
Bitcoin And Altcoins: How Blockchain Technology Started
In 2009 a developer/group of developers going by the name Satoshi Nakamoto wrote a whitepaper that outlined the underlying technology beneath their cryptocurrency, BTC (Bitcoin). You could say that blockchain technology started with the Bitcoin Network. This revolutionary concept would soon lead to the growth of other digital currencies and further uses for blockchain technology.
Bitcoin is a shared public ledger that makes use of 1 megabyte (MB) blocks of information on Bitcoin transactions. These blocks are all linked through a cryptographic verification process forming an immutable chain. What Satoshi created is an incorruptible decentralised digital ledger of transactions that developers can customise to record and store information about anything of value. It’s anonymous, transparent, eliminates the need for third parties and, most importantly, it’s secure.
While Bitcoin became the benchmark for other digital currencies it does have its shortcomings. One of them is that its consensus mechanism to create blocks, Proof-Of-Work, is energy-intensive and time-consuming.
Altcoins are digital currencies that are built on the same frameworks as Bitcoin but also have fundamental differences. While the development of Bitcoin has resulted in hundreds of altcoins being created, two, in particular, stand out.
Litecoin has the same underlying infrastructure as Bitcoin and was developed in 2011 by Charles Lee. While similar to Bitcoin’s, it addresses two of its shortcomings: transaction speed and access to the coin mining process. Litecoin transactions are four times faster than Bitcoin’s.
Ethereum was developed in 2014 by Bitcoin enthusiast Vitalik Buterin. Ethereum took the blockchain premise of Bitcoin and combined it with Litecoin’s faster processing times to create its cryptocurrency. While there are similarities to Litecoin and Bitcoin, Etheruem is also "an enormously powerful shared global infrastructure" that is not only a digital currency but also hosts small bits of code called ‘smart contracts’ that run on its virtual peer-to-peer network.
Blockchains And Smart Contracts
Blockchain uses go far beyond the world of cryptocurrencies like Bitcoin and altcoins. Blockchain technology is also used to create small programmes called smart contracts. These programmes are self-executing lines of code stored on a blockchain that run when a predetermined set of conditions are met.
They work with simple “if/when...the...” statements written into a blockchain. Once the conditions are met and verified, a network of computers executes the actions set as a result. This could be the transfer of a property deed, issuing a concert ticket or paying a musician royalties. Once the transaction is complete the blockchain is updated.
It’s important during blockchain application development to take into account some key factors. Smart contracts are only as good as the programming used to create them and the data fed into smart contracts needs to be accurate. Since smart contracts are created on blockchains once they are in place, the rules can not be altered. Either by the end-user or the programmer.
What Are dApps?
Decentralised applications, or dApps, are similar to regular applications only that they have one key difference; they are built to run smart contracts that exist on a decentralised network. Your dApp would have a frontend interface like any other app, however the backend would exist on the decentralised network.
When you create a smart contract to run on a blockchain what you’ve written is backend code for your dApp. Smart contracts for Ethereum dApps are written on Ethereum-specific languages including Solidity, Vyper and Serpent. However, the frontend code can be written in any programming language that can make calls to the smart contract backend.
Since dApps work with smart contracts on blockchains, they can run autonomously, provide results instantaneously and store data cryptographically. The ability to reduce administrative overheads, increase data security and transparency are some of the reasons that decentralised applications are very beneficial to modern businesses.
dApp Development By Laracle On The Ethereum Blockchain
Earlier on we mentioned Ethereum’s “shared global infrastructure”’. Ethereum is like one large computer with different components spread across the globe. dApps use tokens that can grant access to the features of the applications. These tokens are distributed to incentivise the different components or ‘nodes’ that participate in making the dApp functional. To consume computing power for an Ethereum blockchain application you would pay in tokens called “Ether”, and those contributing processing power earn them.
The nodes on the network contain all the information of all the smart contracts on the blockchain, and they are constantly updated. Since each of the nodes contains the same information as the others, losing one node doesn’t affect the smart contract’s uptime.
Ethereum blockchain applications, such as the ones we develop at Laracle, can look like any other web, desktop or mobile app. The only difference is that the back end is a smart contract/s on nodes of the Ethereum network.
Chainlink is a network of decentralised oracles originally designed for the Ethereum network but that can run on any blockchain with smart contract functionality. Oracles are nodes that act as a bridge between “on-chain” and “off-chain” data. They give smart contracts access to real-time data such as atmospheric pressure, temperature, event attendance, crime statistics, forex rates, shipping schedules, etc. Chainlink’s tamperproof input enables blockchains to trust the real-world information they receive.
Laracle builds bespoke apps on the Ethereum platform that utilise Chainlink’s decentralised network of oracles for smart contract functionality. This functionality can increase productivity for your business and lead to increased revenue. A travel insurance dApp would use real-time flight data to determine whether or not your flight was cancelled by checking for the information through Chainlink’s network of oracles. This means that you would receive your payout without having to call their office.
Examples Of Decentralised Applications
Royalty Payments And Intellectual Property Rights
In the music industry, a blockchain can secure intellectual property rights and ensure that musicians get paid royalties for playtime. Ownership is established on the blockchain and the smart contract would trigger the transfer of funds once you play a musician's song on a streaming app such as Spotify. Spotify acquired a blockchain startup called Mediachain to better connect artists to content hosted on their platform.
Supply Chain Management
dApps also have great potential in supply chain management. Blockchain can improve supply chains by allowing greater transparency in provenance, increasing efficiency in goods delivery, transaction tracking and increased coordination between partners. CargoChain is a project working on creating a repository of rich cargo information that can be shared with communities of blockchain developers.
Realtime access to information such as inventory data, duplicate payments and missing shipments would save any business money. With blockchain supply chain managers you can trace the source of the errors or trace the sequence of actions that led to it. Blockchain application development that links to Chainlink would be able to check maritime schedules, weather patterns and flight data to confirm that a missing shipment was due to extreme weather affecting cargo deliveries.
Real estate companies such as Propy have made their title deed registry decentralised. Their online marketplace allows for instantaneous title deed transfer upon proof of purchase. The whole process from listing to closing a sale is backed by smart contracts and is transparent.
This ultimately leads to a reduction in fraudulent real estate deals and increased trust between sellers, brokers and purchasers.
Working With Laracle
Out-the-box blockchain applications may seem cost-effective at first, however, a custom-built solution allows you more freedom when selecting functionality. What works for one insurance firm or real estate company might not be the best solution for another. That’s why the better option for businesses is to hire blockchain application development companies with proven track records.
Working with Laracle will help your business move into the future. Our team of developers have been working with blockchain for over ten years. We build decentralised apps that are bespoke and tailored specifically to your business and needs. Our blockchain application development team will work with you from conceptualisation to application rollout ensuring that we deliver exactly what you need.
Contact us or visit us at our offices at Stratford-upon-Avon and someone from our customer service desk will help you get started on your blockchain application development.