The term- ‘Blockchain’ was first coined in 2008 by Satoshi Nakamoto- an individual, or a group of people- its identity is not known till date. Blockchain was actually invented for serving as the public transaction ledger for Bitcoin cryptocurrency. But today, Blockchain solutions are solving several complex challenges for multiple industries. Blockchain Projects range from improving capital markets to data sharing/securing to seamlessly performing international payments. In this blog, I will discuss with you different types of Blockchain projects existing in the decentralized economy, along with a few basics of Blockchain technology and some vital benefits of Blockchain app development. Let’s get started.
Basics of Blockchain Technology
Simply put, Blockchain refers to the
technology in which chains of blocks are created for carrying important data
securely. This technology enables to timestamp digital documents so that
altering or backdating them isn’t possible. Also, it helps the Blockchain app
developers resolve the double records problem without requiring a central
server.
This technology is also called Distributed
Ledger Technology (DLT). It uses decentralization and cryptographic
hashing. It is based on three concepts: Blocks, Nodes, and Miners. Conceptual
working of Blockchain is explained in the below steps:
- Transaction is initiated
- Blocks are created for the
transaction using the mining process
- Blocks are sent to every node
on the network
- Nodes validate the transaction
- Nodes are awarded for proof of
work
- Existing Blockchain embraces
this newly generated blocks
- Finally, the transaction gets
completed
Potential Advantages of Blockchain
App Development
The forward-thinking solutions provided by
Blockchain app development will be virtually impacting almost all the sectors
within a few years. This underlying technology is here to stay for decades to
come as it offers advantages like the below:
- Open-source
- Easy to use
- High-speed Transactions
- Decentralization
and Immutability
- Elevated Traceability and
Transparency
- Lesser Frauds, Security Threats
and Risks, etc.
- Auditability
- Top-grade Security
- Better Accessibility to
Important Data
- Automatic reconciliation of
Accounts
- Improved Efficiency
- Higher Integrity
- Reliability and Trustworthiness
With the increasing demand for Blockchain
technology, businesses are trying to adopt it in various forms. Different types
of blockchain projects are coming up to keep abreast with the trending
technology.
Categories of Blockchain projects
‘Fear of
Missing Out’ (FOMO) Projects
The FOMO projects, as their names depict,
are the ones initiated by companies to be seen as a competitive organization
following the current trends and does not fall behind in the business world.
These Blockchain Projects are usually led by single companies, either used for
in-house applications or with a few limited partners. They are mostly used as a
marketing act. These companies do not have the adept knowledge on how
Blockchain can be best employed for varying projects. Though they might not
create much value but they are not always useless. They represent the companies
as modern and futuristic, so the chance of getting prospective customers
increases.
However, the companies going with such
projects must be aware of ‘FOMO backlash.’ It means that if the project is
poorly planned and fails in the long term, the company’s reputation can be at
stake.
Opportunistic
Projects
These kinds of projects are usually meant
to solve issues related to record-keeping or any known problems. These projects
provide long-term benefits to the companies even when they are not operating
for some time. But looking at the downside of these projects, the companies may
lose control over contracts and data later.
One of the examples related to
Opportunistic Projects is the creation of the Australian
Securities Exchange for streamlining financial trading. Another example is
the project developed by the Depository Trust and Clearing Corporation (DTCC)
for regulating records from credit-default swaps is for the US financial
system.
Trojan Horse Projects
In this category of projects, one
significant player like a dominant supply-chain participant, or a small group,
or a digital giant builds a Blockchain project and invites other ecosystem
participants for employing it. They come with a strong technological foundation
and are meant to address the common and wide-reaching issues in a certain
industry. These projects look quite attractive and are backed by a brand. But
such projects may require the users to share their sensitive info, their
company’s data, etc., and thus, transfer the control which may result in
consolidation of the market for the main owner of Blockchain.
A food-tracking Blockchain system is a good
example of a Trojan Horse project. It takes lesser time and effort
comparatively to decide the point at which the food items were
replaced/adulterated, the person responsible for this, and its further
prevention. It allows accessing of the records to the users in real-time. But
the requirement is that participants need to share their personal details on
the network. This can be at times risky for the participants as they become
dependent on owner’s technology and bound by their contract terms.
Evolutionary Blockchain Projects
Blockchain projects in this archetype are
developed in order to evolve over time so as to utilize tokens with
decentralized governance. As compared to the trojan horse project category, the
business currencies in evolutionary type projects can trade at a lower risk
level comparatively for the participants.
There is an example for these type of
projects that comes from UEFA – the central committee for European football.
This committee works with two Swiss technology companies namely- TIXnGO and SecuTix
for the development of an evolutionary blockchain platform that provides a
safer and equitable market for selling football tickets. In this project, token
is created for each ticket so that all the purchases, transfers of each ticket
can be tracked along with owner details.
Blockchain Native Solutions
This too is another kind of project that
business leaders focus upon. They are a preferred choice of several startups or
innovated even by teams of existing firms for disrupting an existing business
model or for developing new market opportunities. They may start with some
different facilities and perspectives, but eventually, they are expected to
move in the direction of decentralized governance and tokenization. However,
these solutions come with huge currency risks. As a result, businesses that are
ready to experiment and manage their own data, prefer Blockchain Native
Solutions.
The gaming and Education industries have
been working upon such projects. Enjin is an
example of this project type in the gaming sector. In the education sector, Woolf
University, also known as ‘decentralized Airbnb for degree courses’, is the
best-cited example.
Concluding Views:
Blockchain technology has emerged as a
new-age solution to address numerous business challenges that include data
sharing and workflows. Blockchain solutions are not just limited to
cryptocurrency today. They are applicable to several industries like the
healthcare industry for sharing the data securely, in the transportation
industry for real-time operations, in real estate processing, in the voting
mechanism, for cross-border payments, for tax regulation and compliance, for
food safety, and much more. So if you are thinking of building an impactful
software application using Blockchain app development services, this blog would
prove to be useful.
To know more about our other core
technologies, refer to links below
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development company
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