Blockchain Technology was mainly created for catering to the digital currency trade. However, the tech-savvy world soon realized that blockchain technology can be utilized in empowering businesses.
Blockchain implementation has the potential to bring more efficiency, trust, and transparency into day-to-day transactions. As a result of this, industry leaders are now planning pivotal projects for their organizations. Blockchain technology across industries is growing quite faster these days and has now become a part of the company’s transformation journey.
To help you clarify all doubts on how to implement blockchain technology and learn more about the complete development process, go through this blockchain guide.
How to Implement Blockchain for Business?
Blockchain for business is helpful for entities that transact with one another. With distributed ledger technology, the participants can access information at the same time. This helps in improving efficiency, removing friction, and building trust. Blockchain technology also allows businesses to rapidly scale and size their solutions.
Read this blog to know how to build a blockchain application from scratch.
What are the Steps in Blockchain Implementation?
84% of executives utilize blockchain in their operations to a certain extent. Blockchain integration has its own set of challenges. So, if you are wondering how to implement blockchain in your business, then it is highly recommended to consider the current situation and the future plans of the organization before going for it. Let’s check out what are the steps in blockchain implementation:
Begin with a Use Case
The first step is to identify and organize your needs. Understand the right problems you want to solve and confirm whether the blockchain integration solutions will help to resolve those. It is always recommended to begin with the pilot project, analyze the results and then implement it on a large scale.
As you proceed to identify use cases, always keep in mind that it is always safer to start in smaller steps. You have to choose relevant blockchain new cases that you can evaluate, research, and explore before you jump into utilization.
Develop your Own Proof of Concept (POC)
After identifying various options for use cases, the second step is to create a valid Proof of Concept (POC). In case you are wondering what Proof of Concept (POC) means, then it simply refers to a strategic process utilized for evaluating how viable blockchain implementation would be in your business.
Before you create your POC, it is necessary to understand the complete reach planning phase in the upcoming stages. You also need to consider a few questions regarding the challenge and competition of your business. This includes:
“How to implement blockchain technology in a simplified manner?”
“How to use blockchain technology?”
“What business problems am I trying to solve through blockchain technology implementation?”
“Will I be able to see any positive results after implementing blockchain in my business?”
Essentially you need the direction key to create your Proof of Concept (POC). You should be able to realize the potential outcomes of your actions. It should be deliberate and tactical. Creating a Proof of Concept (POC) involves the following major steps:
- Create and follow a set of guidelines that explains the intent of your business project. Create a prototype using advanced tools that would entail the designs, sketches, architecture, code, etc
- Test your prototype to understand how well it works.
- Analyze your MVP with a minimal set of features.
Make a Careful Selection Of Your Blockchain Platform
It is crucial for you to be careful enough while making your choice for a blockchain platform for your business. Also, you must know how to use blockchain technology in the best possible way. Consider factors from thorough market research and budget while making this strategic decision.
While selecting the blockchain for your business, you can choose from some of the popular platforms highlighted below:
A lot of companies have now adopted the utilization of Quorum in their blockchain integration. Quorum eliminates data tampering in business transactions, thus allowing organizations to make secure transactions along with ensuring privacy. Blockchain technology like this is all set to revolutionize business transactions.
Ethereum is mainly used for developing innovative contracts and is currently being used by several organizations for determining the potential scaling rate of their business. Ethereum can be utilized for buying and selling goods and services like Bitcoins. What’s unique about Ethereum is that the users can easily build applications that can run on blockchain-like software.
Stellar is a kind of blockchain platform that is used for developing blockchain applications for organizations. Stellar mainly supports a distributed exchange mode which allows the users to send payments in a few specific currencies as the network performs the forex conversion automatically.
This particular blockchain platform is mainly used for creating private blockchain applications for businesses. An expert in Hyperledger can develop technical solutions that build companies through blockchain implementation.
Corda allows you to make direct transactions through smart contracts which guarantee the topmost privacy and security. An expert in this platform would be able to create excellent designs as well as utilize the platform for eliminating the costly contingencies in a particular business contract.
Just like its name, the multichain blockchain platform can be employed in various industries like the Healthcare sector, Banking and Finance, Human Resources, Educational sector, E-commerce, retail business, and so on. It is mainly used for professional optimization of the businesses’ human resource works.
For instance, the Appinventiv experts created a blockchain-powered Learning Management System platform called Nova that is currently transforming the education sector.
Powered with the smart abilities of blockchain, Nova is just the answer to all the genuine issues of today’s education sector. The developers at Appinventiv looked into every stage of the Nova project right from designing the elements, to its development, the inclusion of blockchain, creation of the smart contract, cryptocurrency development, QA testing and finally deploying it in the stores.
The Openchain blockchain platform is used for maximizing every aspect of a particular business’s Human Resource Management.
Build and Test Blockchain Solution
It is always advisable to study the current blockchain technologies for choosing the best for your blockchain implementation. For evaluating this you need to consider certain factors.
- The quality of the technology, which means that the technology should offer valuable consensus and security. You also need to know if it will work with both public and private blockchains.
- The blockchain infrastructure
- The vastness of the technology (if it is compatible with other multiple blockchain platforms)
Another feature that you need to look up to is the smart contracts. Smart contracts enable businesses to make vital transactions without any interference from third parties. You can attach your own set of rules to the smart contract. The transaction process becomes transparent, automatic, and fair.
All the parties will be mandated to abide by the smart contract rules. The nature of the smart contract is the only reason why most businesses have now chosen blockchain technology. Hence, while building your blockchain solution, you need to develop smart contracts that will directly automate your transactions. Soon after that, you can go for testing your blockchain integration and analyze how well it is working.
BONUS READ- An Entrepreneur’s Guide on Blockchain Technology and Its Uses
Create your own block first in order to run and manage the entire network on the production of a particular chain. In this particular stage, blockchain in cryptocurrency comes into the picture. The encrypted token is utilized for activating the power needed to ensure the persistence of the communication nodes.
This is the final stage or deployment stage where you need to activate the blockchain on the blockchain network. Start with a cloud server for hybrid solutions which is a combination of both off-chain and on-chain entities.
Opt for a Consensus Protocol
The consensus protocol can alone create an indisputable system of agreement between the devices in a distributed network. Take a look at the various consensus protocols available:
- Proof of Stake- In this consensus protocol, the developer of a particular block will be chosen on the basis of random qualifications including wealth, age, performance, and so on. In the Proof of Stake, the miner has to analyze the block transactions that are based on the number of coins that he or she poses. Overall, Proof of Stake is all about the higher the number of cryptocurrencies a miner has, the higher his or her ability for multiple block creations.
- Proof of work– Proof of work is a consensus protocol that rewards the miner for offering useful solutions to tough problems. Proof of work mainly deals with Distributed Denial-of-service (DDoS) attacks.
- Byzantine Fault Tolerance (BFT)- Byzantine Fault Tolerance (BFT) is a distributed network feature for reaching a consensus even when a few nodes fail to respond with incorrect information.
- Delegated Proof of Stake- This consensus protocol ensures that the stakeholders vote for their representative miners who would build the blocks along with the approval of transactions. In this stage, a few fixed sets of miners are directly involved in the block production activities.
- Proof of weight– In Proof of weight, a kind of agreement is achieved based on the quantity of cryptocurrency the miner has and its weight. In this consensus protocol, the amount of coins that are available with a minor is what determines the weight of their cryptocurrency.
Building The Blockchain Ecosystem
When the number of stakeholders doubles up, then you can start building an ecosystem for improving understanding and fostering trust. It can be achieved by agreeing on the sharing of rewards and costs without bias, the terms of engagement, and the government mechanism.
Challenges of Implementing Blockchain
Implementing and establishing blockchain in business has its own set of challenges. Let’s have a look at them one by one:
Lack of Skilled Blockchain Experts
The blockchain industry experiences an extremely low supply of skilled and talented blockchain developers. However, mid-sized and large-sized companies are now offering competitive incentives for attracting and retaining talented blockchain experts.
Complex User Interface
All your clients might not be tech-savvy. They might find it difficult to use a certain set of technologies. If your system is simple yet appealing enough, then you can attract the maximum number of customers.
Changing Blockchain Regulations
Blockchain rules and regulations keep on changing and updating often. The challenge is how one should incorporate and consider the regulation effect in their business activities.
Lack of Scalability
Scalability is still a major bottleneck in the blockchain industry, although there are several approaches suggested for improving scalability. Blockchain forms a link for communication and interaction between the blockchain system and might help overcome scalability issues.
The blockchain technology implementation is often vulnerable to threats from hackers if it is not properly encrypted. It is one of the most disturbing issues that most of the organizations who have implemented blockchain into their business face to date.
The Transaction Processing Speed (TPS) is again another major challenge that hampers the greater adoption of blockchain technology in business.
Things to Consider During Blockchain Implementation
Blockchain integration is not an easy process. There are certain factors that you need to keep in mind while going through this process. Here is the list:
Do Not Yield to Setbacks
Every aspect of your blockchain implementation protocols will never function to its fullest from the very beginning. Therefore, create a copy of all the failures and issues and then try fixing them. There are several methods to do so, however, you should try to ensure that the blockchain remains simple. Remember, trial and error are your best friends. Make sure that you make enough trials and treat each trial as a crucial part of your learning curve.
The Implementation Has to Work
If you wish to test the actual working of your system, then you have to test it properly and fully. It is very much essential to go for testing first in a controlled setting. Then the testing begins in the real world. You may end up finding a few unique variables that you did not consider earlier. Any factor like this can impact the consequences of your blockchain implementation.
Make Plans for the Future
Once you are done creating a working blockchain implementation protocol, you should immediately start preparing for the next stage. Check some features which need improvements. You can also keep a check on the scalability of the blockchain for your future growth needs. This is vital so that technology does not stagnate. Continuous drive towards achieving perfection in the form of small improvements.
Your initial target must be to make edits and improvements to your protocol. The different aspects of it can puzzle you and this can harm your overall plan. Your goal should be to make the system more effective and not change it completely midway. In short, it is imperative that you stay focused and do not get distracted, or else the entire blockchain implementation in your business would be fruitless.
10 Applications For Blockchain In Your Business
Take a look at the top 10 applications of blockchain in business with a few great blockchain implementation examples:
Since blockchain finds its root in cryptocurrency, it would only make sense if it can be used as an application for compensating employees. If a particular company pays wages to their international workers, then incorporating Bitcoin into the entire payroll process would be a major cost saver.
Payments that are made by a bitcoin can save both time and money for employees and employers alike. Other than paying the international workers, there are also contractors, full-time employees, and remote employees whose payment needs to be cleared. This kind of payment is something that most of the big companies are betting on this year.
Delegated Proof of Stake (DPOS) is an efficient, fastest, flexible, and most decentralized consensus model available. It leverages the stakeholder’s power of approval voting for resolving consensus issues in a democratic and fair way. All the network parameters, right from fee schedules to block intervals, can be tuned via elected delegates.
The selection of block procedure allows confirmed transactions in just a few seconds. The consensus protocol is mainly designed to protect all the participants against unwanted regulatory interference. Read this blog to learn how blockchain technology is utilized in the voting system.
Banking & Finance
The BFSI sector is currently leading the blockchain industry and will reap all the benefits in the near future. The main focus of setting up banks is to create connected groups of people in secure and transparent communication between trade and commerce. Blockchain acts as a tool that will help to accomplish such things on a global scale.
Blockchain technology in international or cross-border payments can enable secure transfers between multiple bank ledgers. This allows one to bypass the banking intermediaries who serve as a middleman for transferring money from one bank to another. By implementing blockchain technology in banking for international payments, transactions become quicker, secure, and cheaper. It also ensures end-to-end visibility anywhere around the world.
The capital market industry is currently going through huge changes in business dynamics due to technology-led market disruption, regulation, and transformed economics of the core business areas. With the advent of blockchain, capital market companies have already moved into the next level of disruptions. The impact and benefit of blockchain could be for reaching the capital market across the selling side, buying side, and market infrastructure with a promise of reducing or eliminating the role of intermediaries.
Trade finance offers the payment guarantees credit and insurance required to facilitate transactions on terms that would satisfy all the parties. But one of the major difficulties involved with the trade finance sector is the huge volume of paper documents which make up much of the information flow between the trading parties.
Blockchain technology has the potential to change the entire business process by redefining the value chain interactions, reducing transaction costs, and eliminating operational complexity. Blockchain technology thus entails a distributed database that autonomously maintains a growing list of transactions recorded in units known as blocks secured from revision and tempering.
Let’s take a blockchain implementation example of how Appinventiv experts helped Asian Bank to get introduced to cryptocurrency as a mainstream source for their day-to-day transactions. Cryptocurrencies are currently playing an integral role in addressing the imperfections in their banking system.
For instance, traditional banking systems are immune to data hacks as compared to Crypto banking. Our experts looked into providing the perfect banking solution for Asian Bank by offering them customer cryptocurrency wallets along with plastic cards. The central ledger was mainly designed for maintaining transactions and balance of users for Crypto, Fiat, and cards with zero scopes for errors.
Money Laundering Protection
Blockchain technology possesses several inherent characteristics that can actually prevent money laundering. Every transaction that is done over blockchain leaves behind a trail of permanent records that is impossible to alter or change. Thus, it makes it extremely easier for the authorities to track the main source of the money.
Regulatory Compliance and Audit
Blockchain helps in incorporating regulators more seamlessly. Cooperating with regulatory agencies is quite a hassle. Audits and processes that require businesses to virtually put their business operations to a halt are every owner’s nightmare. But fortunately, blockchain holds a better promise.
A company called R3 has made its only mission to streamline the entire regulatory process, especially in the finance sector. Instead of keeping physical files that can be fraudulently lost, altered, or damaged, R3 built its Corda platform in the blockchain. Corda allows the regulators to be provided with access to record financial transactions in order to verify the fees that are being paid, proper signatures being collected and operations being gently conducted.
P2P or Peer-to-Peer is a technology that is actually based on a simple principle and that is the concept of decentralization. The Peer-to-Peer architecture of blockchain mainly allows cryptocurrencies to be transferred globally without any need for intermediaries with a distributed peer-to-peer network. Anyone who wishes to participate in the verifying and validating process of the blocks can set up a bitcoin node.
Blockchain has the ability to automate claim functions while verifying coverage between the reinsurers and the companies. It will also automate the payments between the parties for claims and thereby lower the administrative cost of the insurance companies. A recent analysis by Gartner has estimated that by 2030, the blockchain industry will generate a business value of $3.1 trillion.
Take Your Leap Towards Blockchain Technology With Appinventiv
Blockchain is an exciting alternative to traditional currency. Blockchain has not only made centralized banking possible but has also reformed transaction methods. In short, blockchain across all industries around the world is transforming businesses.
It has boosted trust which has led to greater efficiency by reducing the duplication of efforts. In case you are looking forward to implementing blockchain in your business, then it’s time that you introduce your business to the next level of automation. Let our experts help you to know how to use blockchain technology. Leverage our top-notch blockchain development services by discussing your project idea with us.
Q. What is blockchain and how does it work?
A. Blockchain is a constantly updated digital record of who holds what. Information about the transactions—the date, time, dollar value, and the participants involved— is directly encrypted into a “block” which is linked to other blocks in order to form a chain.
Q. Is blockchain easy to implement?
A. Blockchains are utilized for several application domains apart from financial transactions. While there are generic blockchains that can be molded for specific use cases, blockchain often lacks easy-to-customize implementation.
Q. How can small businesses utilize blockchain?
A. Blockchain utilization is particularly useful for small businesses. It offers them an efficient and affordable avenue for making and receiving payments, savings products, accessing investment, and building a credit history.
Q. Can I create my own blockchain?
A. You can initiate a new cryptocurrency by building an entirely new blockchain with a coin. It can also be created by forking an existing one and thus, creating a token.
Q. How much does it cost to build a blockchain?
A. Just like mobile app development cost, the blockchain app development cost varies depending on features, application goals, and other development efforts.