Contact us anytime to know more - Abhishek P., Founder & CFO CISIN
Connecting blocks can create a blockchain in a chain. Bitcoin uses blockchain technology. Multi-step transactions, which require verification and traceability, are possible with blockchain technology. Transactions can be secured, and compliance costs can be reduced. Blockchain technology allows contracts to be managed, and products can be traced back to their origins. It can also manage voting platforms, titles, and deeds.
What Are The Benefits Of Blockchain Technology?
These are the benefits of incorporating blockchain technology into your business.
- Transactions already recorded can't be altered because the ledger is digital.
- Blockchain's encryption function makes them secure.
- Transactions are transparently and immediately performed because the ledger is constantly updated.
- It is centralized, and there are no middle costs.
- Participants verify the authenticity of transactions.
Building Trust in Government
These are just a few benefits you can get from using blockchain technology in your business. Because the catalog is digital, transactions cannot be changed.
- Because of its encryption, Blockchain is secure.
- Transactions can be completed immediately and transparently because the ledger is automatically updated.
- It is decentralized because there are no intermediary fees.
- Participants verify and examine the legitimacy of transactions.
- Blockchain Security.
One drawback to digital transformation is the rise in data theft. Online hackers love government databases. Through database thefts, hackers have gained access to the Social Security numbers, birthdates, and addresses of millions.
According to the report, the technology could store the hash value of citizen documents on a Blockchain, allowing governments or other organizations to provide digitally verified copies of these documents as needed.
Increase Government Accountability
Blockchain technology can be used in specific applications to reduce duplication, simplify procedures, increase security, improve audit burden, enhance security, and maintain data integrity. It may make it easier to manage vendor proposals. According to a report, it takes approximately 40 days to process new submissions.
Reduce Government Corrupt
While Blockchain cannot stop crime, the Research found that Blockchain could be used to address system flaws.
Public Procurement/Government Contracting
According to a report, contracting is the most corrupt area in government spending. Blockchain-based processes can use automated contracts to provide greater objectivity and allow third-party scrutiny of transactions. Transparency and accountability are also a benefit to participants and transactions. However, blockchain technology's use could make implementation more difficult. A report states that a blockchain network is more susceptible to abuse and more difficult to access and use. The blockchain platform's anti-corruption potential can be unrestricted if offline transactions occur.
Land Title Registries
Blockchain technology trends can be used in specific applications to reduce duplication, simplify procedures, increase security, improve audit burden, preserve data integrity, and boost security. The efficiency of vendor proposals management processes may be improved. According to a report, it takes approximately 40 days to process new submissions.
Electronic Voting
Because of concerns about voter turnout and security, as well as accessibility and voting access, governments are looking into blockchain voting platforms. The information security features in Blockchain could be used to prevent interference in elections and increase voter participation. Reports indicate that Blockchain's vulnerability to cyberattacks, and other security concerns, would be a limitation.
Beneficial Corporate Ownership Registrations
According to a report, contracting is the most corrupt area in government spending. Blockchain-based processes can use automated contracts to provide greater objectivity and allow third-party scrutiny of transactions. Transparency and accountability are also a benefit to participants and transactions. However, blockchain technology could be more difficult to use because of the way it is used. A blockchain network platform is more likely to be misused the more difficult it is to access and use. The blockchain platform's anti-corruption potential can be unrestricted if offline transactions occur.
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Grant Disbursements
Secretive donation systems, allowing organizations to receive millions of dollars in donations, are ripe for fraud. Blockchain has the potential to simplify the process, increase verification, reduce administration, and reduce the number of participants. On the other hand, people who are less tech-savvy may be excluded from grant disbursement processes and subject to a constraint. It also needs to go over how grant recipients spend their money.
How Will Blockchain Disrupt Industries
Many businesses have used blockchain technology to increase traceability, security, transparency, and accountability. Blockchain technology offers many advantages and will lead to a revolution in several companies.
These are the sectors blockchain technology will soon affect.
Banking
Before Blockchain
Transfer fees can be expensive and time-consuming in banking. It is difficult to send money abroad due to the exchange rate or other hidden fees.
After Blockchain
Blockchain's peer-to-peer connections allow it to detect malicious attacks immediately. All data in the blockchain network have been encrypted and verified with a cryptographic method.
Blockchain removes the need for a central system and provides a private, secure, and transparent way of recording transactions. Guardtime, a software security company, offers blockchain-based goods and services. The business uses blockchain technology to share data between its nodes instead of the central system.
Cyber Security
Before Blockchain
In the past, cyberattacks were a serious threat to the public. Many organizations are currently working to find a way to prevent unauthorized access or tampering with data.
After Blockchain
Blockchain's peer-to-peer connections allow it to detect malicious attacks immediately. All data in the blockchain network has been encrypted and verified with a cryptographic method. Blockchain removes the need for a central system and provides a private, secure, and transparent way of recording transactions. Guardtime, a software security company, offers blockchain-based goods and services. The business uses blockchain technology to share data between its nodes instead of the central system.
Supply Chain Management
Blockchain
In supply chain management, transparency could have been improved. As a result, there needed to be more trust, improved departmental collaboration, and service redundancy after Blockchain. Blockchain technology allows product tracking by enabling product traceability across the Supply Chain.
Blockchain is a distributed ledger that records transactions. Transactions from supply chain partners can be audited and verified. Blockchain keeps track of transactions. A block is created for each transaction. Anyone can use Blockchain to validate the legitimacy and status of any product before it is delivered.
Healthcare
Before Blockchain
Patients can connect to other hospitals instantly and gain access to their medical records. This is one of many issues. Because data is stored in physical memory systems, data corruption is possible. The use of Blockchain eliminates the need for a centralized authority. This enables immediate data access. These blocks are scattered throughout the computer node and are linked to one another. Hackers will need help changing this data.
Government
Before Blockchain
Rigged voting is an illegal practice in traditional electoral systems. Before submitting their ballots, voters must line up. This is a tedious process. Blockchain allows voters to cast their ballots without publicly declaring their identity. Officials accurately count ballots because each ID can only be linked with one vote. Once the vote has been registered in the public register, it cannot be removed.
MiVote is an example. MiVote is a token-based blockchain platform. It resembles a digital vote machine. Voters can use MiVote to cast their votes using a smartphone. Voting results are securely kept. Let's get on with it and learn about Blockchain basics.
Blockchain Fundamentals
Public Distributed Ledgers
Computers: A distributed ledger is shared data between users of the blockchain network. On the other hand, a blockchain is a distributed decentralized ledger that records transactions across multiple chains. Bitcoin network users can verify and access transactions, which reduces their vulnerability to hackers.
Encryption: To block illegal access, Blockchain uses cryptography. This ensures the security of the blocks. Each user is responsible for their key on the Blockchain.
Evidence of Work: A mathematical puzzle is required to verify transactions within a blockchain network. This process is known as proof of work (PoW). Miners are those who attempt to solve the mystery.
Mining
Blockchain is where miners put all their resources to good use. They are compensated for approbating transactions and adding them to the public ledger.
Blockchain Technology and Distributed Ledger Technology are all used in a Variety of Industries
Let's begin with the most talked-about industry: finance and banking.
Finance and Banking
Blockchain can be a huge asset to the banking and financial industry. Blockchain can improve recordkeeping, transparency, and security. It's a great solution for fraud prevention. Monitoring is the most obvious use of Blockchain. It is digital and allows for transparency, greater traceability, and quicker examination.
You could also share a distributed ledger with regulators. This would eliminate the need to report and allow for faster risk detection. Blockchain will enable automation, which will speed up decision-making and reduce costs. These programs may be available on many different websites.
Read More: What is the Future of Blockchain Technology?
Healthcare Technology
Contrary to popular belief, there is much more to modern technology and the healthcare industry than you might think. Unsurprisingly, the global healthcare blockchain market is expected to reach approx $5.61 trillion by 2025. Blockchain technology has the potential to save hundreds of billions of dollars per year while also addressing critical healthcare issues. This section will cover healthcare issues and possible solutions, such as Blockchain.
Solutions in Healthcare Blockchain
According to Research, blockchain technology could save the healthcare industry up to $100 billion annually by 2025. These savings can be attributed to lower labor and support costs, IT and operations costs, and costs associated with data breaches.
Blockchain technology allows pharmaceutical companies to track their drugs across their supply chains. This makes it more difficult for theft and makes it easier to spot abnormalities faster. Our data is protected and transparent; we can access real-time and up-to-date information. This allows us to detect fraudulent claims and reduce insurance fraud quickly.
Estonia is a pioneer in blockchain technology. Estonia has an electronic medical record system that can be integrated from all. Data integrity, security, and system access logs can all be guaranteed with blockchain technology. This improves safety. The United Arab Emirates is another leader. The strategy of the UEA is to use blockchain technology for tracking health professional licenses in the healthcare sector.
Insurance
Despite the rapid growth of the insurance industry, many challenges remain. Blockchain technology can revolutionize the insurance industry by reducing underwriting, detecting fraudulent behavior, and increasing cyber insurance coverage.
Blockchain-based insurance could reach approx $1.39 trillion in 2023. Blockchain technology can reduce risk and save reinsurers as much as $10 billion. Automating and sharing information reduces risks and costs. Unsurprisingly, 65% of insurance executives consider DLT essential to their business's ability to remain competitive.
Insurance Sector Problems
Fraud In The Insurance Industry: The insurance industry has failed to curb fraud despite all efforts. The insurance industry's largest expense is fraud. More than 7000 companies make up the insurance sector. They generate more than $1 billion annually in premiums. This market is huge and opens up new opportunities for criminal activity. It could be worth upwards of $40 billion each year. It is also difficult to detect fraudulent activities using traditional techniques.
Underwriting: Today, the underwriting process heavily relies on paper-based recordkeeping. There are very few online-enabled tracking applications. This can lead to disputes and high record management costs. Who, what, and when? These issues can cause problems for clients as well as underwriters.
Calculating The Cost Of Blockchain App Development
The below provides a detailed insight into the cost of developing a minimum viable product with blockchain app development services resources that have varying levels of expertise:
Suppose someone wants to hire another person to do a task for them. In that case, they have three options: They can hire someone that works within the company (in-house), someone that works independently (freelancer) or an entire group (agency). How much they pay them depends on their ability to do the job. If they're just starting, the amount they pay depends on how good they are at their job. They might pay around $500,000 for someone who works for the same company. Or they may pay $30,000 to $50,000 for someone who works for themselves. Or they could hire an agency and spend between $1,50,000 and $2,50,000. If they're good at their job, they may pay them up to $200,000. They might also pay them $50,000 to $90,000. Or $2,50,000 to $5,000 if you hire an agency.
The Following Variables Affect The Development Cost:
1. Industry Of The Application
The industry to which an application belongs is the first factor that impacts development costs. The cost-impacting factors vary from sector to sector. They include the complexity of the dApp and the number of stakeholders who would use the app.
Below is a summary of a cost differentiation chart for each industry:
- Healthcare - $55-$100K+.
- On-Demand - $40-$80K.
- Social Media - $45-$100K+.
- Public Sector - $70-$100K+15t.
- Finance Sector -$50-$100K+.
2. The Project Complexity
There are many factors to consider when defining the complexity of a Blockchain-based mobile application. You should first consider the app's purpose. You should clearly understand the challenges that end users face, the solutions available, the reasons for investing in blockchain apps and the services your app can provide. This will allow you to identify the type/solution of blockchain you should be investing in.
If you run a business, you might find it helpful to consider the following options:
- The Platform
There are over 25 platforms that can be used to develop a Blockchain app. You don't have to start from scratch. Some of the best-known are Hyperledger Fabric, BigChainDB and Quorum. It is suggested to consider all the platforms mentioned above and decide what will work best for your application.
- Consensus Mechanism
Each blockchain system has its consensus algorithm. For example, Bitcoin uses Proof of Work. In contrast, other random blockchain-based systems might use Proof of Stake, Delegated Proof of Stake or Elapsed Time. You need to determine which algorithm is best for your needs. You must also consider other main elements, such as user approvals, the reissue process, asset issuances, key management, arrangement and management, atomic transfers and handshakes, signatures and address formats.
This is an important step, so we recommend consulting your development agency before finalizing one.
- Stack
Each platform will have its own tools and languages for blockchain programming. Each stack also has its benefits and drawbacks. For successful creation, you should focus on the correct set of stacks.
- The APIs
You may be able to find pre-built APIs for development, but you may also need to create an API that is specific to your use case. For example, you might want it for data authentication, monitoring, keypair creation, data collection, or smart contract interaction.
- The UI & UX
After determining all of the backend details, you can build a console that will be used for UI and Admin. This section will define the correct front-end language, servers and external repositories for your app's development. Here, you will find the definitions.
- POC
Blockchain is in its infancy. It's, therefore, best to use the MVP development approach. An MVP solution is suggested to be created and tested rather than a complete solution. Other factors can be considered to determine the complexity of the blockchain request. The complexity of an application often determines the price of a Blockchain app. It also depends on personnel, equipment and technology. Let's examine each of these factors in more real-world use cases.
Read More: Blockchain Development: How Much Time And Cost Does It Require?
3. What Type Of Application Are You Looking For?
Every organization needs a digital solution to increase productivity and grow its business. You can either need an app that generates high revenue or adds value to the product you sell, or you can solve a general business problem.
A Blockchain framework for business provides trust, accountability and traceability while reducing costs to other intermediaries. There are blockchain apps for various fields, such as education and lifestyle, healthcare, and utilities. Travel, gaming, etc. You may also need a SaaS app to offer subscription-based business services.
4. Third-Party Tools Cost
- Amazon Web Services: Computing Delivery and Storage ($100-$1000 depending on number of users).
- Monitoring services like Uptime Robot or Statuspage.io: Sending downtime notifications ($10 to $50).
- Notification services like Twilio Kumulos Amazon SNS: Authorizing notification within the app ($10-$50)
- Bug tracking tools like Instabug or Bugsee: Collect live bugs and report them ($10 to $100 a month)
- Analytics using Flurry or Mixpanel: Analysis of data, funnels, insights, and reporting ($0 - $150).
As blockchain is in its infancy, there is currently a shortage of experienced & qualified blockchain developers in the market. A blockchain developer earns an average of $150,000 per year. A blockchain developer can be more expensive than hiring a blockchain company for project requirements.
5. How Much Does It Cost To Hire People?
How many resources are required to create an application? Hiring a team to develop blockchain apps is a significant cost. Software developers' salaries are the main cost. There are also other factors that affect the cost of software development, such as insurance, promotion payments, payroll, and holidays.
Remember to include recruiting costs, such as management time or advertising, to find resources for your blockchain project with high-quality services. Hiring technical experts is difficult because blockchain technology is new for many people. Organizations are constantly investing in training resources. Costs of training can include online courses or attending events related to Blockchain.
6. Cost Of The Process
The cost of implementing Blockchain depends on the programs or stages in the development process.
- Design: Blueprint System, User Interface/Experience design, wireframes, and prototypes. Low-fidelity designs include app flow.
- Development: Testing and Coding.
- Deployment: Delivery and DevOps. Deployment to Cloud Platforms.
- Migration: Moving existing solutions to the Blockchain platform.
- Maintenance: maintaining new updates and testing to ensure that the app runs smoothly with every OS release.
- Upgrade: New features and changes in smart contracts.
- Third-Party Tools: Collaboration, Hosting and Storage, Notification System.
The blockchain development process includes additional costs that different tools and technologies bear.
7. Project Management
The agile method organizes regular weekly meetings and scrums to keep track of sprints, tests, time, bugs, and deliverables. Software such as Confluence Trello and Jira can facilitate the agile methodology. These software tools are also expensive and add to the cost of blockchain implementation. Jira is a project management software that we use to track our team's progress and provide action items for customers.
8. Continuous Integration
Each developer should validate and write code in the shared repository to ensure it works seamlessly with other developers' code. It is important to manage a software pipeline that produces quality. This can be checked using automated business processes. Bitbucket or Github are used to manage source code, increasing the blockchain application's cost.
9. Maintenance
Blockchain technology is relatively new and in its infancy. New platforms are being introduced to the market daily. Due to this, platforms should be changed based on their scalability and flexibility, as well as their confidentiality. Apple, Google, and Blockchain platforms all release OS updates every year. A blockchain application's maintenance service cost estimates 30-35% of an overall project's cost. This can vary based on the complexity according to business requirements. Therefore, we can conclude that the best way to develop your blockchain app is to hire a blockchain app development company. This option is more cost effective than hiring a freelancer or developing in-house blockchain experts.
The Complexity of Blockchain Apps and Cost of Blockchain Implementation
The costs of blockchain implementation depend on your project's complexity and size. A number of factors determine the complexity of a project involving blockchain technology. You should be able to determine the type of app you need by knowing the app's purpose, the problems that end users are facing, why blockchain solutions are needed, what existing solutions are, and how your app will bring about transformation with the help of a blockchain development company.
The blockchain applications have been classified into three categories according to their complexity.
Low Complexity Blockchain Apps
- Basic Smart Contract App.
- Payment applications created with existing cryptocurrencies.
Medium Complexity Blockchain Apps
- Semi-decentralized applications.
- Apps that are built on blockchain platforms such as Ethereum, Hyperledger. Fabric/Sawtooth/EOS and more.
High-Complexity Blockchain Applications
- Build a Blockchain Platform from Scratch.
- Building a complete decentralized network.
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Conclusion
Before Blockchain development services can be fully integrated with the retail sector or finance industry, there will be many changes for both technical or non-technical users.
