Are you looking for a Blockchain solution? First of all you should know about Bitcoin. Bitcoin is a Peer-to-Peer Electronic Cash System, written by Satoshi Nakamoto in 2008, was an original combination of public key cryptography (which was invented in the 1970s), cryptographic hash functions (which were also invented in the 1970s), and proof-of-work (which was invented in the 1970s) (invented in the 1990s).
There have been a slew of derivate and blockchain-inspired projects launched over the last several years. In technical terms, the most majority of them are not blockchains, but rather distributed ledger systems.
Let us dcode the process of how to create a blockchain solution in only eight stages for you. In order to keep things simple, I’ve used the phrases blockchain and distributed ledger system interchangeably throughout this piece.
Table of Contents
- 1 Step 1: Identify a Suitable Use-case
- 2 Step 2: Identify the Most Suitable Consensus Mechanism
- 3 Step 3: Identify the Most Suitable Platform
- 4 Step 4: Designing the Nodes
- 5 Step 5: Design the Blockchain Instance
- 6 Step 6: Building the APIs
- 7 Step 7: Design the Admin and User Interface
- 8 Step 8: Adding Future Tech
Step 1: Identify a Suitable Use-case
There is a great deal of excitement about blockchain solution. According to what I’ve read, blockchains have the potential to eradicate global hunger, eradicate corruption, eradicate poverty, and achieve a whole lot more without breaking a sweat. It’s unfortunate, but that’s not the case. Step one is to identify a use-case that is both practical and profitable.
There are three things that blockchains are particularly good at:
Data Authentication & Verification: Immutable storage, digital signatures, and encryption are all examples of data authentication and verification techniques. The blockchain can store data in nearly any format, which makes it extremely versatile. Blockchains can be used to generate and verify digital signatures, as well as to construct public-private key pairs and store other information.
Smart Asset Management: Smart Asset Management encompasses the processes of issuing, paying, exchanging, escrowing, and retiring assets. A smart / crypto asset is a tokenized form of a real-world asset, like as gold, silver, oil, or land, that can be traded on a cryptocurrency exchange.
Smart Contracts: ‘Smart Contracts’ is a word that is frequently misunderstood, but that’s a discussion for another day.
Step 2: Identify the Most Suitable Consensus Mechanism
Proof of work was utilized as a consensus method in the first blockchain, which is now used to power the bitcoin crypto-currency. There are a variety of distributed ledger systems available today, each with its own set of consensus mechanisms, including Proof of Stake, Byzantine Fault Tolerance, Deposit-Based Consensus, Federated Byzantine Agreement, Proof of Elapsed Time, Derived PBFT, Redundant Byzantine Fault Tolerance, Simplified Byzantine Fault Tolerance, Federated Consensus, Round Robin, and Delegated Proof of Stake, among others.
You must select the consensus process that makes the most sense for your use case, which will vary depending on the situation.
Step 3: Identify the Most Suitable Platform
There are numerous blockchain platforms available today, with the majority of them being free and open source. It is necessary to select the most appropriate blockchain platform based on the consensus mechanism you selected in step 2.
The following are some of the more popular platforms, listed in alphabetical order:
- Chain Core
- Domus Tower Blockchain
- Elements Blockchain Platform
- Hyperledger Fabric
- Hyperledger Iroha
- Hyperledger Sawtooth Lake
- Symbiont Assembly
Step 4: Designing the Nodes
Blockchain solution can be permissioned (for example, a government-run land registry) or permission-less (for example, a social media platform) (e.g. Bitcoin, where anyone can become a miner). Depending on their implementation, blockchain solution can be private (for example, a contract management system in a pharmaceutical company), public (for example, an asset backed cryptocurrency), or hybrid (e.g. a group of banks running a shared KYC platform).
Another consideration at this time is whether the nodes will be hosted in the cloud, on-premise, or on a combination of both. Then there are concerns with hardware configuration, such as CPUs, memory, and disk space. You’ll also need to decide on the operating systems that will be used as a foundation (usually Ubuntu, CentOS, Debian, Fedora, Red Hat or Windows).
Step 5: Design the Blockchain Instance
The following features of most blockchain networks must be carefully prepared and configured before they can be used:
- Asset issuance
- Asset re-issuance
- Atomic exchanges
- Key management
- Multi signatures
- Native assets
- Address formats
- Key formats
- Block signatures
Some parameters can be altered at run-time, but others cannot, which makes this a critical phase in the process.
Step 6: Building the APIs
Some blockchain platforms include pre-built APIs, but others do not include such features. APIs are divided into several categories, the most important of which are as follows:
- Generating key pairs and addresses
- Performing audit related functions
- Data authenticatin through digital signatures and hashes
- Data strage and retrieval
- Smart-asset lifecycle management –issuance, payment, exchange, escrw and retirement
- Smart contracts
Step 7: Design the Admin and User Interface
Step 8: Adding Future Tech
By incorporating Artificial Intelligence, Biometrics, Bots, the Cloud, Cognitive Services, Containers, Data Analytics, the Internet of Things, and Machine Learning into your Blockchain system, you may significantly increase its power and effectiveness.