When blockchain technology came into the picture via the whitepaper, nobody knew how to implement this technology to solve our real-world problems. Meanwhile, an anonymous person Satoshi Nakamoto invented the peer-to-peer electronic cash transfer system.
Bitcoin was the first-ever decentralized application built at the top of the blockchain. From the technical standpoint, Bitcoin is a combination of proof-of-work consensus algorithm and cryptography hash function.
With the steep rise in the popularity of blockchain-enabled projects, many peoples keep asking how to build own blockchain? Since blockchain is a complex solution and we cannot easily implement blockchain-based solutions.
In this short but brief article, we'll address the most widely-asked questions how to build your blockchain? I found that many discussion forums like Quora and Reddit are inundated with this question.
Build own blockchain by following steps:
Step 1: Identify a Use Case
Undeniably, peoples often try to overstate the potential of blockchain technology. I've read many articles on the web that blockchain can fight poverty, food insecurity and can make our world corruption-free.
All these facts don't make any sense. Therefore, first and foremost, you should have to identify a suitable business case.
Keep in mind that you can harness blockchain technology for:
1. Data authentication and verification
Since blockchain database is immutable. Therefore, data stored in it cannot be tampered with or removed. That's the reason organizations like PwC use it to store encrypted data and digital signatures. This usability of blockchain technology makes it well-suited for government organizations and pharmaceutical companies.
As we all know, the forgery of official documents has become very common nowadays. Therein blockchain comes in very handy. Moreover, blockchain allows us to identify counterfeit drugs.
2. Asset Management
It includes cross-border funds transfer, real estate, debt securities, escrow, and retirement funds. The blockchain-based solution enables smart asset management by tokenizing real-world assets with smart crypto.
3. Smart contract
It is the least understood concept that deserves a separate article to cover it thoroughly. Simply speaking, a smart contract is used to streamline the transaction between two peers.
To keep that in perspective, let's take a real-life example of renting a home. In a smart contract, no intermediary is involved between you and the tenant. Once the mutually agreed conditions are met, you'll receive your payment automatically, and the tenant will get the key.
Step 2: Identify the Perfect Consensus Mechanism
Bitcoin solely relies on the energy-intensive proof-of-work consensus mechanism. But many distributive ledger systems avoid proof-of-work and use less resource-intensive consensus mechanisms in place of that.
The most prominent of them is proof of stake and Byzantine fault-tolerant. We strongly recommend you select the consensus mechanism that caters to your business needs.
Step 3: Identify the most Feasible Platform.
It is by far the most crucial step while designing own blockchain and probably the least understood. There is a various blockchain platform, and no one is paid and proprietary. However, you need to choose a platform that synchronizes with the consensus mechanism you've chosen in step2.
Some of the well-known blockchain platforms are
- Chain Core
- Domus Tower Blockchain
- Hydra Chain
- Hyperledger Fabric
- Hyperledger Iroha
- Symbiont Assembly
- Eris: DB
Step 4: Delicately Design the Node
Government departments are more inclined towards the permissioned blockchain. The land record management system is the perfect example of it. In stark contrast to the bitcoin that is a permission-less blockchain wherein, anyone can participate in mining.
Similarly, pharmaceutical companies prefer those blockchain solutions that are private to contract management systems seamlessly. On the other hand, hybrid blockchain is the best choice for banks and financial institutions to run a shared KYC platform.
Before deploying a blockchain solution, you must decide whether the nodes will run on the cloud, on-premise, or both.
Step 5: Embed APIs
Some blockchains are equipped with API to help you in performing many tasks such as:
- Storing and retrieving od data in a hassle-free way
- Auditing and real-time risk management
- Data authentication via digital signatures and hashes
Step 6: Decide Technology Stack for your Blockchain Project
Furthermore, it would help to decide which database best suits your project, whether it is MySQL or MongoDB. Also, don't forget to decide on servers (e.g., FTP servers or mail servers.)
Step 7: Embed Cutting-Edge Technology
The efficiency of blockchain can be increased significantly by combining it with other cutting-edge- technologies such as IoT, big data, machine learning, or deep learning. That's why technology conglomerates like IBM and Microsoft are working on the convergence of blockchain with other technologies.