What is Blockchain Technology?
While blockchain tech brings many benefits to diverse application areas, the concept can be challenging to understand. Imagine a chain of multiple blocks, as its name suggests. Each of these blocks carries essential digital information, and they are linked to each other. Also, there is no single party that controls the information flow or owns it. Every party involved in the transactions has access to this chain of information blocks, also called a ledger. The data becomes open to everyone. Hence, one cannot secretly change a part of it without disturbing other blocks. Plus, a sophisticated encryption algorithm protects each block. Therefore, blockchain tech allows decentralized and secure transmission of information.
Why is Blockchain Technology Services Popular?
- No central authority exists - the data is not owned or controlled by one party.
- High-level security is provided - data is stored in encrypted blocks.
- Third-party interference is not possible - unauthorized parties cannot distort or change the information.
- Information transfer is transparent - everyone can track the data and verify it.
Traditionally, people rely on centralized networks to retrieve or input data. For instance, money transfers are done through banks, and they control the transactions. It was not possible to send money or receive it without involving a third-party or intermediary. While centralization is not damaging, it surely has some disadvantages. First, there is one party that collects all the necessary information. Hence, this party becomes attractive to malicious attacks. Plus, when attacks happen, or even technical issues occur, the system turns to be useless. If this controlling entity shuts down for any cause, then none will be able to access their data. Thankfully, in a decentralized system, every involved party is the owner of the data. They all can access the information. In such a network, people do not need to involve banks or transfer services to send money. They are the only decision-makers about their transactions.
Completely Transparent Operations
Such a feature has never existed in information systems, which makes blockchain technology unique. Everyone can see the transactions. Yet, do not confuse it with the lack of privacy. While the transactions are visible, they are encrypted, so each party is visible with their public names that are a bunch of nonsense numbers and letters. Only if you are aware of someone’s public name, then you can track their data.
How is Immutability Achieved?
Blockchain technology uses a unique hashing function to encrypt the data inputted in fixed-length strings of numbers and letters. Each new block includes the necessary information and a hash pointer. Hash pointer not only indicates the address, but also contains the data from the previous block. Hence, if there is a change in one of the blocks, then the hash of the block changes. So, it affects the previous block, too—such adverse domino effect continues till the first block. As every block is verified, changing any block becomes impossible. Hence, data in blockchain tech is immune to changes. In real-life cases, it can be especially useful in accounting, because none will be able to alter data to benefit from company accounts.
Application Areas of Blockchain Technology
Currently, one of the main areas of application is in finance. As the blockchain concept eliminates the need for a middleman, it becomes more attractive for financial transactions. Popular e-wallet applications usually utilize this technology to allow people to store their Bitcoins or other cryptocurrencies. Such technology requires identity verification to ensure security, but developers can improve verification methods in the future. Overall, blockchain technology companies facilitate financial organizations considerably, but it is not the only use area of the concept.
Disintermediation is a popular trend in the modern world, where the need for an intermediary is eliminated. For instance, Uber made it possible to get a taxi without the participation of a taxi providing company or Airbnb offering accommodation directly from the owner. Yet, even these cutting-edge technologies can become obsolete with the help of blockchain companies. This technology allows parties to integrate and communicate without involving a centralized power, like Uber or Airbnb. The supplier and the buyer can meet and perform their duties directly without paying any fees. An example can be an online shopping app that does not require transaction fees for purchases. Blockchain enables the creation of such applications, which will become popular in the future.
Supply Chain Control
The application of blockchain technology is especially astonishing in supply-chain activities. By adding new blocks of information about the movement of products, it is possible to track the action back to the source of supply. In ethical businesses, like diamond or chocolate, where it is necessary to source the raw materials and beans from ethical suppliers, tracking and controlling the supply is essential. Companies would not want to get cocoa beans from fields that utilize child labor as it can damage their reputation. Hence, they partner with blockchain technology companies to integrate the system into their supply-chain actions and have better control.
In recent years, storing data securely became an even more significant issue as the value of data collection increased. Centralized cloud systems facilitate the storage process. Yet, they are vulnerable to attacks because all information is located in one virtual location. A decentralized system that blockchain companies provide is more reliable because all data is distributed throughout the whole network. In this way, blockchain tech protects data from being hacked or lost.
Why do You Need Blockchain Integration?
- Automatization in all tasks
- Impossibility of deleting or modifying entered data
- No intermediary is involved
- Fast exchange of data
- Factors to Choose a Blockchain Platform
- Scalability and Potential
The high volume of users can decrease the speed of the transactions. Hence, it is necessary that online processing is fast, even with many users. Currently, blockchain development frameworks, such as Bitcoin or Ethereum, are not as speedy as traditional systems like PayPal. Sure, if the transaction volume is low in your business, you can favor elements like cost-efficiency or quality over scalability. Otherwise, it is an important factor.
This platform should allow the creation of smart contracts with bespoke details. The platform should offer algorithms that automatically satisfy the conditions. In this way, it is possible to avoid legal cases with customers or suppliers.
Suitability to Business Needs
Before discussing this element, it is necessary to know the different types of Blockchain network. There are three of them, private, permissioned, and the public network. Private, as its name suggests, is not open to everyone. This exchange of data happens between several parties, and only they can access the information. Hence, a private network is centralized. If your business involves sensitive information- important documents, addresses etc-., it is better to choose a private, centralized network type.
The permission network is usually transparent, which means transactions are visible to the public. However, there is only limited participation. Therefore, it allows the storage of massive data and is fast. The public network is decentralized, and there are no restrictions for participation. While it enables token trading or mining cryptocurrencies, such a network can be more pricey. Plus, transactions in such a system take more time compared to private and permissioned ones. If your business involves public data and aims to improve trust and transparency, it is best to choose a public network.
How to Choose a Blockchain Technology Company?
While blockchain technology brings many advantages, it is still complex and expensive. Also, as the technology is relatively new, there are still a few experienced and reliable development companies. Hence, it is important to evaluate companies properly to partner with professional service providers.
Customer Reviews and Feedback
Reviews play a huge role in decision-making because they are more reliable. Potential clients can trust the comments of previous customers more than the claims of the blockchain development company. Yet, it is common that a highly satisfied client does not give feedback or praise the service in the review section. Usually, they think it is the duty of the blockchain technology companies to provide excellent service. However, when they are dissatisfied, they mostly leave negative reviews.
Even if the company itself does not provide access to the negative feedback, it is highly probable that customers share their experiences on review platforms, as simple as LinkedIn. Another way of getting feedback can be through contacting directly to the previous customers and asking about their opinions. Hence, you can request the customer details from the development company. Collecting reviews allows interested people to assess the quality of the service fairly. If you are also interested, do not skip this step. Otherwise, you can end up with a developer who only wastes your time, money, and nerves.
Another important area to consider is the previous work of the blockchain development company. Usually, professional companies share the best projects on their websites. Also, as they value sharing, they can post their projects and provide them to everyone. Alternatively, you can ask them about their latest decentralized application (DAPP) projects. By analyzing their work, it is easy to have some ideas about professionalism, quality, and skill level of the development team. If the company has complex projects, it shows their tremendous experience and reliability because others trusted them. If there are only simple projects in their portfolios, it indicates either they are young-inexperienced, or previous clients did not trust them with challenging applications.
Skills in Blockchain Services
While blockchain development is similar to software development, there are some significant differences. Blockchain companies should have extensive knowledge and skills in many programming languages, including Python, Java, C++, Solidarity, etc. Additionally, they should have excellent knowledge and previous experience in Cryptocurrencies, SaaS, Paas, IoTs, data, and cybersecurity, etc. If the company has weaknesses in any of these areas, then your final product can be prone to attacks and technical problems. It is generally not recommended to partner with development companies that only deal with commercial tasks. These companies usually do not have enough expertise in blockchain technology.
As mentioned, blockchain technology requires knowledge on a wide range of tools and programming languages. Hence, it is not easy to find and hire expert developers in this field because there are few of them. Yet, if you work with a highly-experienced team, you will enjoy the convenience it brings. You would not need to communicate with them constantly, guide, or control them through the whole process. In other words, a professional team is completely reliable, which will help you avoid time and effort wasted. Therefore, when you are evaluating blockchain technology companies, always ask about their team. Know more about their skills, frameworks, and tools they use, as well as the number of developers that will work on your project. In this way, you can find a professional company, and they will deliver your project on time, as promised.
There are many application areas of blockchain technology, as discussed in previous sections. Whether your project relates to supply-chain or finance, it is better to find a blockchain development company that has experience in the same area. If they are unfamiliar with your project field, it is highly probable that you would waste a lot of time explaining your goals to the development team. It is also possible that they understand the project, but they do not care about business goals. Creating a perfectly working decentralized application is just one part of success. The other part is about bringing benefits to customers through the application to satisfy business goals and targets. Targets can be increasing communication efficiency or decreasing costs, and your development company should make progress in the project, keeping these goals in mind.
Blockchain technology is relatively young, and it still allows the exploitation of opportunities. Frequently new possibilities emerge. Hence, professional companies follow the trends to integrate these opportunities into their offerings. Therefore, it is highly likely that blockchain companies that keep up with trends will provide you with the most effective and innovative decentralized application compared to their competitors.
Smooth communication signals the professionalism you would want in your project. Yet, communication has many different elements. Starting from the very first element, the speed of their response to your interest matters considerably. This element can seem biased, but it is usually a good indicator. If a company answers your request late, it means that they either do not have enough staff or they simply do not value the customer relations. In the next stage, once you choose some companies, you can request videoconferencing. In this way, you will be able to see their business settling, the number of staff, etc. Sure, if the blockchain development company outsources the team members, it is not a problem. However, having a team working under the same roof is much more desirable for better performance.
Additionally, the project manager or any other communicator of the development company should ask many questions from you. It shows that they are interested in your project and want to deliver a final product that fits your specifications. As they get more familiar with the project, they can also make more realistic promises.
Why Partnering with a Professional Company is Important?
One of the most significant advantages of blockchain technology is safety. The code of your application is open, which means anyone can access it and check transparency. Yet, if there are any loopholes in the coding, then people with malicious intentions can also damage your application. Hence, your development company should constantly control the protection system. Negativities aside, the encryption method of the blockchain network is immutable. However, it is better if you still ask the blockchain companies about their approach to security and which filters they use.
Integration of Blockchain Technology
As mentioned before, blockchain technology development requires a broad range of skills. However, when it comes to integrating new technology with the old system, it gets even harder. This process takes a lot of time and effort. Two particular issues make the process challenging. Integrating with the new system and finding what to change in the old system. In all cases, it is better to find a company to develop the application without implementing it on an existing system. Later, when it is partially ready, the integration can take place.
Even if the company has skilled team members and they develop the blockchain technology application you want, their professionalism level can change the whole process. It is possible that the team will delay the tasks, and you will lose your nerves every time they do not follow the deadlines. Additionally, they can exceed the preliminary budget to a great degree. Sure, the actual budget can be different from the first calculations, but there should not be a huge difference that will put your budget in a challenging position. These issues can seem trivial compared to requirements like skill level or area of work, but they affect customer satisfaction level dramatically. Therefore, it is better if you choose a reliable, professional, and responsible development company.
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