How to Build a Blockchain App: Tech and Business Guide
Though the hype around cryptocurrency has subsided, the interest in blockchain remains the same.
Blockchain market size is projected to grow from USD 10.02 billion in 2022 and is projected to increase at the rate of compound annual growth (CAGR) that is 87.7 % from 2023 until 2030.
Let’s discuss how to build a blockchain app in 2023 and what benefits businesses can get from it.
In this article, we’ve covered all the key aspects of dApp development:
- What is blockchain, and how does it work?
- The most popular platforms for dApp development
- Why you need blockchain application development
- Questions you should ask before development
- Industries for dApp development
- How to build a blockchain app step-by-step
How much does blockchain application development cost?
What is Blockchain & How Does It Work?
Blockchain is a digital ledger of transactions with copies distributed across the entire network of computers connected to the blockchain. Each block in the chain contents several transactions. Every time a new transaction is added, a record of information about that transaction is added to every participant’s blockchain.
Blockchain is an innovative system of recording information in a way that makes it difficult to impossible to hack or compromise the system.
Blockchain is a decentralized peer-to-peer (P2P) network consisting of data blocks. These blocks, which are chronologically added to the blockchain, form digital blocks of transactions. Each block contains and stores the numbers of each transaction happening in the blockchain. Every time a new transaction occurs on the blockchain, a record is added to the ledger.
Inter-node communication and validation are required for adding new blocks to the blockchain. All participants of the P2P network have to accept a new block for it to be registered. There are different types of consensus used, such as Proof-of-Work (PoW), Proof-of-Stake (PoS), Proof-of-Authority (PoS), etc.
The recorded data cannot be altered without altering all the subsequent blocks; thus, every change on the blockchain is visible to all its participants.
Below you can see a video showing how the blockchain works.
4 Key Types of Blockchain
When it comes to blockchain, there 4 two types of networks that you can utilize for your project:
- Permissionless blockchain (public) – accessible to all members of the networks and on any device. Any user can become a part of the blockchain, make transactions, verify them and stay anonymous. The main example of permissionless blockchain is Bitcoin. This type of blockchain is great if you want t
- to create an app available for a wide audience.
- Permissioned blockchain (private) – accessible to authorized participants only. This type of blockchain has certain rules that regulate transactions between network participants (nodes). Organizations mostly use Permissioned blockchain for internal purposes with all the transactions validators belonging to the same company.
- Hybrid blockchain – in some cases, organizations will benefit by taking the best from the two worlds. Hybrid blockchain allows creating a private system alongside a public system. This way, they can control who can access specific data stored in the blockchain and what data is open to all network participants.
- Consortium blockchain – this type of blockchain is also known as a federated blockchain. It is similar to the previous type as it’s a private blockchain with limited access to a particular group. Consortium blockchain has a validator node that can initiate, receive and validate transactions. Member nodes can only receive and initiate transactions, but they cannot validate them.
Below you can see all 4 types of blockchain compared to each other side by side.
Now, let’s explore how to create a blockchain app with our exhaustive guide. We’ve covered all the processes involved with major benefits and possible challenges of dApp development for your business
Below you can see a visual representation of the whole blockchain application development and all key steps involved in the process.
It’s time to dive right into our 8-step guide.
Step 1: Decide Whether You Need Blockchain or Not
Before you dive headfirst into blockchain application development, try first to understand whether your business will benefit from it or not. We’ve prepared a list of questions to help you make the right choice.
1. Do you need to store data?
If your business doesn’t need a database to store data, blockchain will be no good to you. In this case, you need to view the distributed ledger as a database on steroids. If you build an app or software that needs to store and process massive data, blockchain will be of good use to you. Its implementation will allow you to have a single ledger that all network participants will access.
2. Do you need an auditable history?
Paper-based documents are great, but not for frequent changes and fast updating. If you need to keep track of the data and the history of all the changes, blockchain will help you build a transparent system with traceable recordings.
3. Does your business require fast transactions?
If your business needs milliseconds-fast transactions, it might be better to stick to traditional systems. However, if security is more important than speed, blockchain will benefit your business by providing secure transactions between all network participants.
4. Do you need a central authority to control the data?
Having a third party that oversees all transactions might be required for some businesses. At the same time, central authorities create a lot of security risks. When all the data is validated by several network participants with an agreed-upon consensus algorithm, you don’t need to rely upon a third party. Thus, it reduces transaction fees and guarantees impeccable security.
5. Do you need a trustless environment?
Trust is often violated, creating many issues for business. Blockchain is a trustless environment where parties can work without worrying about other particles sticking to the protocol and previously agreed-upon rules. The system is transparent, and nothing goes unnoticed.
Your business will probably benefit from blockchain implementation if you answer all the questions with a strict ‘Yes’. Now let’s find out how to build a blockchain app for different industries and gain the advantage.
Step 2: Understand the Benefits of Blockchain Implementation
You’re probably asking yourself how to build a blockchain app and turn it into your business advantage. This part of the article will help you understand the most prominent benefits of integrating your solution with the decentralized ledger.
Probably the most promising advantage of blockchain apps is the security they provide. Traditional applications are prone to various vulnerabilities: they can be hacked, and information can be stolen. Third-party interference is impossible with blockchain solutions. There is a copy of all chains on the devices of all network members, and no change remains unnoticed. To get control over a blockchain, hackers would need to hack at least 50% of all computers connected to the blockchain.
The main benefit of dApp development is transparency within your applications. Information about all transactions is available to all the participants. Storing data in a blockchain makes it more secure, accurate, and transparent, as all the parties need to accept an update in the blockchain. There is no changing an existing record without changing the subsequent ones.
Blockchain has a huge potential in the supply chain industry. Tracking products and their origin are rather difficult. The same goes for protection from counterfeit. With blockchain, you get a complete trail of the product, tracking its origin and each step of its journey. Thus, you know who manufactured the product, who delivered it, and that it’s not a fraud.
Implementing blockchain in the industry will help move information from paper to distributed ledger, allowing all the members to easily access the information stored there.
Cost-efficiency is probably one of the main factors you need to consider when exploring how to create a blockchain app. By improving business processes and removing intermediaries and third parties from the workflow of establishing trust, blockchain streamlines operations, reducing the costs needed for keeping track of information.
Blockchain allows executing transactions fast by simplifying and automating processes. There is no need for third-party intermediaries to verify the authenticity of transactions, which speeds up the whole process. You only have one ledger that contains all the information about all transactions.
Even if we are talking about an open blockchain, it provides high privacy to all the participants. Despite being a shared ledger, information about all transactions stays anonymous, ensuring the privacy of all network members.
As mentioned, there is no changing data in the blockchain without changing the subsequent blocks. Thus, blockchain ensures data integrity and its protection from authorized changes. The whole history of updates is available to all network participants.
While learning how to build a blockchain app and add value to your business, you also need to know whether you need to use it at all or not.
Step 3: Identify the Industry for App Development
According to the State of the dApps, there are over 3,5459 active decentralized applications. Such apps are distributed through different industries, such as gaming, finance, health, security, etc.
Let’s review some industries that blockchain disrupts and get inspiration for your future project.
1. Banking & Financial Services
Every month, around 400 new blockchain dApps appear in the finance industry. Blockchain promises to bring transparency, simplicity, and efficiency to financial transactions.
The technology can be used for all key services provided by banks, such as payments, clearance, and settlement systems. One day, blockchain promises to put crime and fraud to rest in the financial industry. The benefits of implementing a decentralized ledger include;
- Real-time and multi-party tracking and management of bank guarantee
- Faster and more accurate automated reporting that draws information from immutable records
- Faster transfer of funds between financial institutions with accelerated settlement
Numerous companies in the finance industry are already using blockchain in their daily operations. Examples include Credit Suisse, which uses blockchain to settle US stock trades. JPMorgan Chase uses decentralized technology to facilitate transactions between institutional accounts. Ripple and R3 are among the most popular blockchains used in this industry.
Implementations: Credit Suisse, JP Morgan Chase, Western Union, Santander
Blockchain doesn’t bring anything new to the insurance industry. Instead, insurance companies are adding blockchain to their existing solutions with the goal of improving operational efficiency, driving down costs, increasing speed to market, and providing a better customer experience.
Immutability and version control properties of blockchain allow using the technology for cross-border partnerships and transactions. In the insurance industry, blockchain can be used for various purposes such as fraud detection, reinsurance, on-demand insurance, microinsurance, and so on.
Implementations: Insurwave, Guardtime, Ryskex, Surity.ai
One of the biggest challenges in the healthcare industry is the use of various systems that process and store data and the lack of connection across these platforms. Such systems store and manage sensitive, personal, and personally identifiable information, which is under a huge risk of hacking. Thus, building a single system that would share data across all institutions is risky, if not dangerous.
That’s where blockchain application development can step in to solve the problem. Healthcare institutions can share data with other network participants without compromising security and data integrity thanks to blockchain.
Implementations: HealthVerity, Synaptic Health Alliance, Hashed Health
4. Real Estate
Buying and selling property is associated with some risks: lack of transparency, a huge amount of paperwork, fraud, errors in public records. Blockchain erases the need for paper-based records. Real estate companies can use blockchain to record, track and transfer land titles and ensure that all documents are accurate and up to date.
Blockchain in real estate also speeds up and secures all transactions.
Implementations: Propy, Ubitquity, Imbrex, Chromaway
When customers buy something, they rely on the seller's trust or a marketplace that is offering the product. However, trust is not always justified. There are still counterfeit products that land on the shop shelves and unsuspicious customers that buy them.
Blockchain can be used to decentralize the trust and move it from marketplaces and other eCommerce websites. Instead, decentralized technology offers to create a direct connection between buyers and sellers.
For example, OpenBazaar provides a platform for selling products directly to customers.
Another possible implementation of blockchain in retails is the protection of counterfeit and authentication of luxury goods. Thus, customers can be assured that they buy genuine products with no risks of counterfeiting.
Implementations: ConsenSys, OpenBazaar, Overstock, Expedia
6. Supply Chain
Blockchain technology has already found its way into supply chain management. The technology can be used to trace all the steps of a supply chain and provide complete transparency, even if multiple supply chain partners are involved.
For example, restaurants can easily track down the origins of the fish they are using for their meals from ocean to market. The Pacific Tuna Project uses a decentralized ledger to manage fishing operations and put a stop to illegal tuna fishing.
The same use cases can be applied to other sectors, including agriculture, automobile, fashion, and so on.
Implementations: Provenance, Blockverify, SKUChain, Fluent, Pacific Tuna Project
7. Copyright & Intellectual property
Copyright infringement is one of the most pressing problems in the modern world. While all the traditional methods fail to provide one hundred percent protection, blockchain is predicted to change the landscape.
Blockchain-based IP protection systems can be used to solve licensing issues and enable direct business relationships between creators and their fans.
The decentralized technology is already being actively used in different industries for intellectual rights protection. We can already see numerous startups in the arts and music industry.
Implementations: Binded, Bernstein Technologies, Mycelia, Ujo Music
8. Internet of Things (IoT)
The Internet of Things is another industry that is benefitting from blockchain implementation. Samsung and IBM are already working on their concept called ADEPT. A decentralized network will allow IoT devices to communicate with each other directly without the need for a central controlling unit. Thus, software updates, bug fixing, and energy usage monitoring will be performed automatically and go unnoticed by users.
Implementations: ADEPT, ArcTouch, Grid+, Chronicled
The gaming industry has successfully turned from leisure to a serious sport. There are gaming tournaments, high cash prizes and even a black market.
Blockchain can solve a number of legacy problems in the gaming industry.
For example, users can own their digital characters with all the assets and skills, and blockchain will protect them from theft.
Rewards can be paid with digital tokens, which then can be exchanged for cryptocurrency or fiat money.
One of the most famous examples of blockchain games is CryptoKitties which went viral and brought developers millions of dollars.
Implementations: CryptoKitties, EtherRockets, Ethereum, Fomo 3D
10. Internet Identity and DNS
Even though the digital world develops in jumps and leaps, we haven’t yet entered the time when every person would have a single internet identity. You use your personal information to register in different applications and solutions, entrusting them with its storage. Authentication with Google and Facebook provides an additional layer of protection. But not all services use it, so it can only get you so far.
Blockchain-enabled identity would allow users to get credentials and use them to prove their identity to other organizations. The decentralized storage of information doubles the wins for both users and organizations. Blockchain enhances personal privacy and speeds up the verification process.
Implementations: Serto, IBM Verify Credentials
Step 4: Come Up with an App Idea
Before deciding how to build a blockchain app from a technical point of view, you first need to understand what problem it will solve.
For example, if you work with cryptocurrency, you might want to create a mobile cryptocurrency wallet, an exchange app, or a crypto signals solution.
The same goes for other industries and problems peculiar to them. The first step in blockchain application development should always start with problem identification and searching for ideas to address the problems with a decentralized app.
For that, you can start by answering the following questions:
- What problem will you solve with your app?
- Who’s your competition?
- Are there any successful competitors?
- How do they attract customers?
- What is your USP (unique selling proposition)?
- Who is your target audience?
- Why should users choose your blockchain application?
10 Popular Apps Using Blockchain
If you need additional inspiration, you can also search the market to see how other companies use blockchain in their solutions.
Before we talk about how to build a blockchain app in more detail, let’s take a look at some of the most prominent examples of its implementation in real life.
Over the course of blockchain, dozens of blockchain-based applications entered the market that are worth your attention.
Shopify uses blockchain to protect copyright. The decentralized storage of information allows tracking and controlling licensing agreements, automatically connecting artists to their tracks. This way, artists always get paid for their music and protect their rights when needed.
- Trust Wallet
This type of blockchain app is probably the most popular on the market. The solution supports all Ethereum-based digital tokens and allows crypto holders to securely store and exchange crypto assets.
BurstIQ is an excellent example of how blockchain can be used in the healthcare system. This healthcare app uses big data and blockchain to allow data sharing between patients and doctors. Thanks to decentralized storage, the data is protected from different forms of attacks and theft. As a result, doctors can view patients’ information and health plans without jeopardizing security.
If you are looking for examples of creating a blockchain app for retail, Warranteer is a great example.
The retail company utilizes blockchain to provide customers with better support services. Buyers can get all the information about products they are buying and the retailer can track all the service support tickets to better manage services in case some problems with a product occur.
- IBM Blockchain
IBM Blockchain is probably one of the most advanced blockchain platforms up to date designed for logistics and supply chain management. Thanks to the distributed ledger, companies can track every product in the supply chain at any stage. The technology provides full transparency and real-time tracking of parts when it comes to their location and condition, ensuring protection against counterfeit.
- Compound Finance
Compound is another project from the cryptocurrency sphere and DeFi (decentralized finance). The solution allows users to borrow and lend cryptocurrency. The price is calculated based on the real-time supply and demand of cryptocurrency on the market.
If you want to know how to build a blockchain app that will change lives, Voatz serves as great inspiration. This application eliminates the need to visit a voting location. People can participate in voting from anywhere in the world using mobile phones. The app uses remote identity verification and biometrics for secure voting.
Brave revolutionizes the advertisement industry on the internet. It’s an open-source web browser that doesn’t show regular ads; instead, it bases its organic search model on consumer attention rather than on the number of clicks. Advertisers who manage to capture users’ attention get rewarded with cryptocurrency.
Propy serves as a great example of blockchain implementation in the real estate industry. The solution allows buying a property with certain types of cryptocurrencies with no paperwork. The ownership is transferred automatically and almost in no time.
Philanthropy is a sphere of life with little to no control over how the donated funds are used. TRACEDonate changes the situation and offers full transparency of donations and tracking of their use. The platform connects beneficiaries and charitable organizations and provides real-time data on how the money is used.
Step 5: Choose a Blockchain Development Tech Stack
You need to decide on the technology stack for your future solution at this stage. The final list of technologies directly depends on your app idea and how you decide to build it.
For example, if you want to build a public application with smart contracts, you need to use Ethereum.
You can see an example of a blockchain technology stack in the image below.
Let’s review some of the most popular blockchain platforms that can be used for dApp development.
Top-7 Most Popular Blockchain Development Platforms
If you wonder how to build a blockchain app, you first need to learn about the most popular blockchain platforms. There are quite a few solutions that you can use as the basis for your application.
- Ethereum – one of the most popular open-source blockchain platforms that gained popularity thanks to flexibility. Ethereum can be used for creating decentralized apps (dApps), smart contracts, and ICOs. Building Ethereum is only possible with its own programming language Solidify, but it’s possible to create dApps in any programming language thanks to HTTP API.
- EOS – the platform is designed for building dApps that rely on smart contracts. The solution offers decentralized application hosting, decentralized storage of enterprise solutions, and smart contracts capability.
- R3 Corda – the platform is mostly used for creating permissioned blockchain and can be easily integrated with an already existing system. ECommerce, healthcare, supply chain, and trade finance are the main spheres of use.
- OpenChain – an open-source distributed ledger platform that uses a single authority for transaction validation. The platform is mostly used by companies to securely manage digital assets. There is no transaction fee, and only one administrator is needed for their validation.
- NEO – a platform is designed for decentralized solutions that require high performance and scalability. NEO uses NEO token for paying transaction fees and uses Delegated Byzantine Fault Tolerance since it offers the higher performance needed for high-load dApps.
- Ripple – a blockchain platform designed for financial services. Ripple connects payment providers, digital assets exchanges, banks, and corporations with their blockchain network RippleNet. Ripple allows building fast and scalable solutions, ideal for the financial industry.
The table below provides a side-by-side comparison of key dApps development platforms.
|Platform||Industry||Consensus algorithm||Smart contract functionality||Ledger type||Governance|
|Hyperledger Fabric||Cross-industry||Pluggable Framework||Yes||Permissioned||Linux Foundation|
|EOS||Cross-industry||Delegated Proof of Stake||Yes||Permissioned||EOSIO Core Arbitration Forum (ECAF)|
|R3 Corda||Cross-industry||Asynchronous Byzantine Fault Tolerance||Yes||Permissioned||Hedera Hashgraph Council|
|OpenChain||Digital Asset Management||Partitioned Consensus||Yes||Permissioned||Linux Foundation|
|NEO||Smart Economy||Delegated Byzantine Fault Tolerance||Yes||Permissioned||NEO Foundation support and NEO holders|
|Ripple||Financial Services||Probabilistic Voting||No||Permissioned||Ripple Labs|
Besides blockchain platforms, you will also need to choose the right tech stack for your app development. The table below shows key technologies for app development depending on the platform you’re targeting.
|Programming languages||Kotlin, Java||Swift, Objective-C|
|SDK||Android SDK||iOS SDK|
|Toolkit||Android Studio||Apple Xcode|
You might also need to implement different additional services and integrations based on the final list of features that you’d like to implement in your application.
Step 6: Start Blockchain Application Development
In most companies, the software development process is divided into two major stages.
Discovery stage (also known as the pre-development stage) – during this stage, the blockchain development vendor will identify your needs and business requirements. The main goal of this stage is to create an overall understanding of your project and all requirements․
The discovery stage offers a number of benefits, such as;
- Time and money-saving
- Business and technical requirements validation
- Documentation of project functionality
- Evaluation of potential risks and their addressing
- Tasks prioritization and allocation of a development team
- Full understanding of the client’s needs
Key deliverables of the Discovery stage include:
- Finalized project concept
- Product backlog
- UX/UI design
- Project architecture plan
- Market and competitor analysis (optional)
During this stage, the code base of an application is created. Development usually involves the work of different experts, such as front-end and back-end developers, QA engineers, Software Architects, and Project Managers.
In most cases, you start small with the simplest version of your app. This way, you can safely test your app idea without heavily investing in the development process. The main goal of MVP (Minimum Viable Product) development is to reduce risks, especially if you are working with blockchain and some unique features that no one has built before.
After successfully testing your idea, you can move to full product development.
Step 7: Deployment & Release
After the app’s code is ready, you need to deploy it to the main network and release it to the market. When we talk about mobile app development, you will need to submit your app to Google Play and App Store. If you decide to work with a software development company, they usually can help you submit the app to an app store and undergo all the related procedures without a problem.
However, development doesn’t stop with the app’s release to the market. Your solution will require ongoing development and support for smooth work and the highest performance.
Step 8: Marketing & Promotion
Now you know how to build a blockchain app from scratch. However, development is only a part of the work you need to perform. Attracting and keeping users is one of your main tasks. Usually, companies develop marketing strategies and start promotion while their solution is still in development.
Possible marketing strategies include;
- Paid ads
- Content marketing and SEO
- Social media marketing
- Email marketing
- Influencer marketing
- Participation in events
The goal is to make potential customers aware of your application. Don’t forget to analyze the results, identify the most promising promotion channels and always listen to customer feedback that provides the most valuable insights into what your target audience needs and expects from your app.
Now you know how to build a blockchain app and what it takes to make it successful.
How Much Does It Cost to Build a Blockchain App?
You’re probably wondering about the cost to build a blockchain app.
Usually, blockchain app development costs around $20,00-$60,000 and can reach up to $200,000 and even go beyond this number.
The final cost depends on several factors:
- App type you’re developing
- Features and their complexity
- Blockchain platform
- Third-party integrations
- App complexity
- Number of targeted platforms
- Location of blockchain mobile app development outsourcing
Usually if you work with US blockchain app developers, hourly development prices start at $100 and can reach $250 in some cases. Off-shore app development outsourcing makes sense if you want to get the best talent on the market at affordable prices.
Companies from Europe and Asia are of great interest to startups worldwide, as you can get the same quality services for twice as low prices as compared to the US market.
Table of contents
Blockchain is a decentralized peer-to-peer (P2P) network consisting of data blocks. The blocks are chronologically added to the blockchain and contain all the information about each transaction made within the blockchain. Blockchain is characterized by immutability, traceability, and anonymity.
Blockchain app development is a complex process consisting of different stages. First, you need to come up with an app idea and decide what challenge you will solve with your application. Then, you need to decide on the technology stack, list of features present in your app, create UX and UI design, and start the development process. At the final stage, when the app is thoroughly tested to rule out any issues, you can release the app to the market.
There are a number of benefits that the creation of apps on blockchain can deliver, such as transparency, traceability, cost-efficiency, speed, privacy, integrity, security, and so on.
Blockchain app development cost can start at $20,000 for a version for a single operating system. However, if we’re talking about meaningful apps with complex architecture and features, the cost starts at around $60,000 and can reach $200,000. The final price will depend on the number of features to be implemented, overall app complexity, and the number of platforms you are targeting.