Factors to Consider During Blockchain Application Development
Just like mobile application development cost, the cost to make a blockchain app differs depending on the app goals, features and efforts you put into the development process. Keeping this into consideration, here are the different factors you need to look at to build a particular Blockchain app:
When you look into the mobile app development industry and how the cost breakdown structure is planned in the domain, you will find it varying between three sets - Large Size Companies, Medium Size Blockchain App Development Agencies like Appinventiv, and Small Cap Agencies.
Small size agencies generally charge a lot less than the medium and large size app development companies, as they are in a dire need to create their work portfolio.
Large-cap companies, on the other hand, are very selective in terms of projects that they take up. The reason behind this high-cost estimate can be any - from the Monetary management of a big team to the aim to maintain a set standard of the portfolio.
Noting both the situations, brands who are planning to enter the Blockchain sector generally prefer to invest in Mid-size Blockchain App Development Companies, as they have the team to handle the project and at the same time they don’t quote a price that would burn a hole in the brand’s pockets.
Now the cost difference that comes between the three Blockchain App Development Company sizes, look something like this -
Apps Developed by large app development companies, with the team size of cost 3000+ experts - Cost $4,50,000 to $15,00,000
Apps Developed by Mid Cap app development companies, like Appinventiv, with the team size of 500-1000 experts-cost $25,000 - $2,00,000.
Apps Developed by freelance or small shop companies, with the team size of 10 to 50 experts - cost $2,000 to $ 25,000.
The industry in which your Blockchain app will belong to also impacts the development cost to a great extent.
There are a number of costs affecting factors that vary from one industry to another - complexity of the dApp, number of stakeholders who would be interacting with the app at any given time, and the industry compliances, amongst others.
The cost wise difference from industry to industry can be seen in the chart below -
There are a number of factors that are combined to define the complexity of a Blockchain mobile application. Goal: The very first thing you need to consider is the purpose of your app. Have a clear idea of what problem end users are facing, what are the existing solutions, what is the need of investing in blockchain application development, and how your app can offer better services. This will help you in determining the type of blockchain app/solution you should invest in. If you are an enterprise, you should consider these questions before implementing blockchain
Every blockchain system uses a specific consensus algorithm (a mechanism to allow all members to authenticate transactions) like Bitcoin uses Proof of Work while some other random blockchain-based system might use Proof of Stake, Delegated Proof of Stake, Proof of Elapsed Time, Federated, etc. So, you need to evaluate which is the ideal method based on your needs. Apart from this, you also need to ponder on other key elements such as user permissions, reissuance mechanism, asset issuance, key management and structure, atomic exchanges, hand-shaking, signatures and address formats. This is a vital step to opt. So, it is recommended to consult with a blockchain app development company if you are still a newbie to this technology.
There are more than 25 platforms on which you can build a blockchain app without beginning from scratch, including Ethereum, Hyperledger Fabric, BigChainDB, and Quorum. So, it is again advisable to consider what all platforms can go well with your app’s goal and then move forward.
With every platform, comes a different set of blockchain programming languages and tools you need to look out for. And each stack has its own benefits and limitations, which implies you need to focus upon the right set of stacks for effective development.
Although you might find various pre-built APIs for the development process available in the market, you might be required to build an API for a specific use case, including performing data authentication and auditing, generating key pairs and addresses, storing and retrieving data, managing smart contracts interaction with the system, etc. To get a detailed insight, head to our complete guide to API development.
Once all the backend things are decided, the next step is to create a UI and admin console. Here, you will decide the right front-end programming language, servers, and external databases for your app development process, etc.
Blockchain is still in its nascent stage, so it is better to go for MVP development approach. In a layman’s language, it is recommended to create a workable solution with core features of the planned application and test it, rather than launching the complete solution.
Now, a cumulation of all these factors is what decides the scale of complexity of a Blockchain app. A cost breakdown structure defined by the complexity of the dApp would look like this -
Payment Apps developed around Existing Cryptocurrencies
Basic Smart Contract Development
Cost of Low Complexity Blockchain Apps - $15k to $35k
dApps developed over the existing Blockchain Platform
Architecture has both Centralized and Decentralized Elements
Cost of Medium Complexity Blockchain Apps - $30k to $90k
The blockchain app types (blockchain-powered solutions) are broadly categorized into two types, namely:-
As depicted by name, these solutions rely on cryptocurrencies for performing utmost. This comprises DApp, wallets, crypto-exchange solutions and ICO with DApp solutions.
These solutions/software are independent of cryptocurrencies. They are based on distributed ledger system and are highly utilized in Inventory management systems.
These are basically secure digital wallets taken into consideration for storing, sending and receiving cryptocurrencies like Bitcoins.
The Crypto Exchange empowers users to convert and trade bitcoins and other cryptocurrencies in a centralized, decentralized, or hybrid environment.
ICO (Initial Coin Offerings) refers to the mechanism of generating and selling cryptocurrencies/ crypto tokens. When it comes to ICO development, the cost of building an ICO blockchain solution depends on key elements like:
White Paper – Since White Paper contains a detailed description of the whole idea and many times involves legal practitioners, the cost, and efforts invested in creating a whitepaper affect the overall cost of ICO development.
MVP: Is the product ready or you need to develop an MVP? The answer to this question matters in the process of calculating the blockchain app development cost since a prototype is must understand the future aspect.
Well-known Advisors: Reputed advisors can raise higher funds, but demands a share of the collected fund as the reward. This way, the number and composition of advisors involved also have an impact on the overall cost.
Advertising and PR: For effective marketing, you need to invest in traditional advertising and PR tasks like compiling a complete list of sites, materials, editors’ contacts, and registering for ICO trackers. This process again involves investing which eventually affect the cost of developing an ICO app.
Interaction on Social Channels: Likewise, the efforts, time and fund invested on social networking sites also adds to the ICO blockchain application development cost.
ICO website, creation of token and the development of a crowdsale smart contract will cost somewhere in the range of $10K to $15K based on the features of the website and the panels for admin and investors.
dApps and Distributed Ledger Technology (DLT) based solutions: Decentralized apps (dApps) are the type of applications that are not regulated by a single entity. They run on a Peer-to-Peer (P2P) network rather than a single computer.
In this type of non-cryptocurrency based solutions, a database is maintained independently by each particular node in the network; records are not communicated by a central authority.
The cost of developing a decentralized blockchain application and DLT (Distributed Ledger Technology) based app directly depends on the efforts invested, which includes:
Are you choosing public or private blockchain development approach? This decision brings a significant difference in the cost to make a blockchain app.
For example, Private blockchain network is a permission-based system where all the permissions are centralized to an organization. This implies you need to request the central authority every time for making any transaction; adding to the blockchain app development cost.
Whereas, the Public blockchain network acts on a permissionless basis, which means you can create a blockchain application where anyone can participate in consensus process without compromising on security terms.
When talking about Public blockchain network, you can either go for pre-existing blockchain solution which is cheaper but its service of platform might hurt, or you can create a customized blockchain solution where you can implement new features, but the development will cost you high.
As already explained, smart contracts enable dApps to connect with blockchain system. Thus, the cost of smart contract development also adds to the Dapp development cost.
The degree of decentralization you are proceeding with for effective content hosting also influences the app cost.
If the level of decentralization is low, the process will be somewhat simpler and less expensive. Whereas, the implementation of a higher degree of decentralization will lead to pure decentralization which will be complex and more expensive.
Block explorer, in simpler terms, is an online blockchain browser where you can assess the contents of individual blocks and transactions, the transaction histories along with the balances of the addresses.
An end to end development of a dapp, with all the features mentioned above, can range from a minimum of $45K - $50K to a higher side of hundreds and thousands of dollars.
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