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The Blockchain Developer's Guide to Understanding DApp, Smart Contract, and Blockchain Development

Blockchain Development Guide

Within the past year, there has been a significant rise in companies seeking to leverage blockchain technology to improve their businesses and gain a competitive advantage. More industries than ever are working with blockchain developers to evolve their businesses or inspire new solutions to complex challenges. While only 0.5% of the world’s population currently uses blockchain technology, that number is expected to grow in the coming years as blockchain development continues to unlock new possibilities across nearly every industry.

From maintaining real estate transactions to tracking the price of diamonds, companies are scrambling to find a blockchain developer capable of reinventing the way we share, manage, and create data. As a result, more engineers and coders are moving away from traditional app development to improve their skills as a blockchain developer and help companies deploy DApps (or decentralized apps), smart contract systems, and other blockchain applications.

However, since this is such a new technology, many businesses still struggle to grasp a complete understanding of blockchain development and how a blockchain developer could help their company.

  • What is a blockchain developer?
  • What does blockchain development mean?
  • What is a smart contract?
  • What is a DApp or Decentralized App?
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This guide was created as a resource to help business owners understand how a blockchain developer can help them and explain everything to do with smart contracts, DApp, and blockchain development projects.

We will cover the following topics:

What Is A Blockchain Developer?

A blockchain developer is someone who can help a client, organization, or company create a new application that runs on the blockchain, also known as a decentralized app or DApp, design new systems or cryptocurrencies based on the blockchain, or further develop a project that already uses blockchain technology in some way.

As with any new technology, the applications of blockchain technology depend on the human creativity and skills of the developer but a few examples of uses for blockchain include:

  • Smart Contracts
  • Decentralized Markets
  • Distributed Cloud Storage
  • Decentralized Social Networking
  • Encrypted Messaging
  • Ownership Verification
  • Identity Verification
  • Authenticated Voting
  • Verified Transaction Histories
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Over the last five years, VCs have invested more than $1 billion into companies working with blockchain technology to create thousands of new and exciting projects. This underscores the importance for many businesses on finding the right developers for the job.

What skills make a Good Blockchain Developer?

To be a blockchain developer, a person needs to have a thorough understanding of how the blockchain works, including the coding language used to develop DApps, a solid understanding of economics, and in-depth knowledge of modern cryptography as it relates to software development.

Blockchain development is still a bit like the wild west. The rules and protocols are changing at lightning speed, so it’s important that developers stay on top of an evolving industry. Blockchain developer needs to keep their eyes glued to every innovation in order to remain competitive and effective for their clients.

As exciting as this new industry can be, blockchain developers have their work cut out for them, as building a decentralized app is not the same as building a software or web-based app.

Blockchain developers need to possess the following skills:

  • Intimate understanding of how the blockchain works, including how DApps and smart contracts are made and how they interact with blockchain technology.
  • Knowledge of crypto-economics, including how basic economic theory relates to the trading of cryptocurrencies
  • Knowledge of Solidity, the blockchain programming language used to create DApps and smart contracts on Ethereum, and C++, the language used to sell and trade Bitcoins.

As the blockchain development field is constantly shifting, developers need to be comfortable living on the edge. They need to be ready adapt to changing protocols at any given moment, which means having a finger on the pulse of how blockchain is evolving around the world. There is no magic set of experience that a person needs to have to become a blockchain developer, but the best developers are able to move beyond the basics and help develop the technology itself and create new blockchain protocols for their projects.

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What Is Blockchain Development?

Before we dive into blockchain development, you need to have a solid understanding of what blockchain technology is and how it works.

What is a Blockchain Technology?

At its most basic level, blockchain technology is essentially a distributed database. This means that a sequence of information is being held, managed, and simultaneously updated across a network of computers.

Blockgeeks has a great analogy to help you understand blockchain technology.

“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”

In the case of Bitcoin and other cryptocurrencies, these ledgers consist of a series of financial transactions that track how the coin has changed hands over the years. However, the same idea can be applied to all kinds of information, including how resources, information, or data are transacted among users.

Block By Block information is added to the chain

These blocks or ledgers of information are connected and validated as part of a chain using cryptography. Every time a person attempts to make a financial transaction on the platform, a series of nodes or individual computers will use a special algorithm to ensure that the transaction is accurate and valid. Once the nodes approve the transaction, it becomes a new block in the chain. Every block is permanent and visible for all to see once it goes into the chain.

This creates a transparent and secure record of all information that is passed through the network.

A Decentralized System

Blockchain technology is radically changing the way information is stored and shared by creating a decentralized system. This means that no one party or computing system is in control of the system. Instead, the blockchain works like a hive mind, as every node works to validate these transactions, reducing human error and improving the security of the system.

This is the inherent value to blockchain technology and what provides it with revolutionary potential. Information no longer needs to be stored in one central location, but rather it can be shared, updated and held simultaneously across a distributed and decentralized network.

What Is Blockchain Development?

Blockchain development is the process of creating or improving a software project using blockchain technology.

Blockchain development generally involves two types of projects:

  • Improving the existing functionality of a project or blockchain system by introducing new protocols
  • Creating a new blockchain community by building a new DApp or decentralized app

Typically, many people see blockchain development as synonymous with bitcoin or other cryptocurrencies. However, the applications for blockchain technology go much further than that.

It can also be used for managing and tracking all kinds of data. Companies can use the same technology to monitor how resources are being distributed and used, how an item’s value has changed over time, and how many times a piece of property has changed hands.

We’ve already seen the blockchain make considerable inroads in the real estate and technology industry. In fact, governments are tapping into this technology when it comes to tracking and sharing resources and beefing up cybersecurity for sensitive information. The blockchain industry is expected to become a 2.3 billion dollar industry by 2021.

This list just scratches the surface in terms of the different types of blockchains. There are many more programs and blockchain development projects out there, but these are some of the most noteworthy blockchains on the market today.


Real world example of a Blockchain Development Project

Blockchain has the potential to change the world as we know it, but what does this actually look like in the real world?

One great example of blockchain’s potential is Gem, a new healthcare blockchain development project that aims to change the way the Center for Disease Control tracks and monitors disease and virus outbreak information. The system creates blocks of information on when a disease was first reported, how it spread, and what’s being done to contain it.

This has the potential to transform the way separate governments share information on their disease control and disaster relief efforts. Managing an outbreak can be extremely challenging as patients travel around the world, infecting new population centers. Governments rely on participation from other countries when it comes to managing and preventing future outbreaks. Gem would make all this information instantly available to the public, helping different countries get a handle on the spread of disease and disaster relief efforts in real-time.

Benefits of using Blockchain Technology

Blockchain has grown rapidly as a technology because it offers clear benefits to businesses who use it to develop their projects.

The most evident benefits of blockchain technology that apply to almost every industry include:

  • Greater Transparency
  • Enhanced Security
  • Better Tracking
  • Increased Efficiency and Speed
  • Lower Costs

This is possible because:

  • Consensus verification processes reduces the chances of error and fraud by making the platform’s source code and transactions available to the public.
  • A decentralized system means that no one party is in control of the system, leading to a more transparent, accurate data or currency exchange platform.
  • Validators are incentivized by cryptocurrencies, which can grow in value over time. This makes the process more open and democratic as everyone has the chance to verify changes to the system
  • Data cannot be erased or altered once in the blockchain, creating an uninhibited flow of accurate information that will stand the test of time.

What Is a Decentralized App or DApp?

A decentralized app is an application that stores its source code on a decentralized peer-to-peer network. This means that no one party or computer is storing or managing the data created on the app, which cuts out the middleman, allowing users to interact directly with one another. The data created on the app is stored and verified using blockchain technology, leading to a series of transparent blocks of information that cannot be deleted or altered in any way.

DApps Vs. Web Apps

DApps are different than web applications in several ways.

Verifying Transactions Using Nodes

First, people have to spend money to use DApps as a way of compensating all the nodes that have to verify every transaction that takes place on the app. Web applications can be free, as the company that owns the app is the only one responsible for verifying and managing the transactions.

Creating and Storing Data

DApps also have the ability to not only create data, but to store that data. When two parties enter into a contract with one another, the data created from their transaction lives on the app. Web applications represent a relationship between the user and the service provider. If someone buys a used car from an individual seller using another company’s app, the company will need to store the data from that transaction on a remote server.

Decentralized for Less Error

DApps also have the ability to live forever, providing their users with uninterrupted services. The information behind the app lives on numerous servers, instead of one centralized location. Web apps are always shutting down due to technical failures because the information is stored in only one location.

Making Time for Verification

DApps tend to feature a slower verification process because the system depends on dozens or even thousands of nodes when verifying a transaction. Web apps are usually governed by just one person or company, which speeds up the verification process but leaves it more vulnerable to errors.

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Different Types of DApps

There are three main types of DApps:

  • Money management applications in which cryptocurrencies are traded among users. Every financial transaction is stored on the app. Individual nodes must verify the transaction using an agreed-upon protocol.
  • Financial applications connected to real-world events in which currency is traded on an app as a way of paying for goods or services in the real-world. This removes the middleman from the operation, allowing users to enter into contracts on their own without a third-party.
  • Decentralized Autonomous Organizations or DOAs are decentralized communities with strict protocols in place. The system runs autonomously based on these protocols with users all over the world completing certain tasks on the blockchain.
Converting a Web App into a DApp

Both web apps and DApps aim to provide their users with certain services. To convert a web app into a DApp, you’ll need to adapt the source code behind your web app to Solidity, the coding language used on Ethereum, currently the largest hosting platform for DApps. This is where you’ll create the smart contracts for your app, or the agreement between participating users. You’ll need to come up with a series of protocols that separate nodes will use to verify different transactions on the app to make it self-sufficient.

Real World Example of a DApp

One of the most ambitious DApps ever created is Leeroy, a new form of social media that uses blockchain technology. Just like Twitter or Facebook but minus the ads, Leeroy lets users upload a status to the platform. Then, users can upvote a popular status using their cryptocurrency. Unlike spammy social media content or influencers that use bots and fake accounts, every interaction on Leeroy is verified by the system’s nodes. Users can rest assured that every upvote or like is coming from a real individual for the purpose of promoting that content.

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What Is a Smart Contract?

A smart contract is an agreement between two users when conducting business through a DApp. The smart contract not only sets the terms of the arrangement, but also enforces them. The network automatically enforces the rules of the contract, making sure that both parties follow through on their obligations. If one party is waiting for financial compensation, the system won’t release the funds until all terms of the contract have been met, reducing society dependence on banks, lawyers, and other third-party intermediaries.

How Smart Contracts Work

If two users wish to make a trade or conduct business on a DApp, they will need to write a smart contract that outlines what’s being traded and under what circumstances. Once the system approves the contract, the two parties are free to trade and exchange goods or services. The system will only complete the transaction once the terms have been met as laid out in the contract. The data from this transaction is stored directly on the DApp.

Example of a Smart Contract

Let’s say that a person wants to buy a home that’s for sale on the market. The buyer and seller will write a smart contract on a real estate DApp, outlining what’s being sold and for how much and under what terms. The money then goes into escrow, but there’s no need for a bank or a separate lending institution to oversee the transaction because the buyer knows that their funds will only be released to the seller once the terms of the agreement have been met. This gives both the buyer and seller complete control over the agreement without having to rely on third-parties.

Benefits of Smart Contracts

As you can see from the example above, smart contracts do away with third-parties that can slow down the trading process. This provides benefits such as:

More User Control

Both parties are free to set the terms of the contract themselves without relying on a notary or a third-party to validate the transaction.

More Peace of Mind

Both parties can rest assured knowing that their transaction will be verified by the nodes operating the DApp and that the original terms of the contract must be enforced. Once a consensus has been formed among the nodes, the transaction will proceed as outlined in the contract. There’s no way for someone to rip another person off when using a smart contract.

Spend Less Money on Fees, Lawyers, and Notaries

People also stand to save more money by not using websites that might take a cut of their business or paying for costly lawyers and other financial services. Everything is controlled by the separate nodes that are there to validate every transaction.

Different Ways to Apply a Smart Contract

A smart contract can be applied in a few different ways. Here are a few examples:

  • Release of Information: The blockchain is being used to track and manage all kinds of sensitive information, most notably a person’s healthcare information. Two parties can use a smart contract when sharing and transferring this information. Only those with the right key can receive the information.
  • Trading of Goods and Services: People can also use smart contract to trade goods and services. The contract works like an escrow service, holding on to the funds until the terms of the contract have been met. A person could hire a freelancer and the funds will only be released until the work is complete and has been delivered as requested in the smart contract.
  • Copyrighting Content: A creative property can also be protected using a smart contract. The contract ensures that anyone that wants to use the copyrighted material must pay a fee. The contract also ensures that this money makes its way to the copyright owner.

How Can You Find a Good Blockchain Developer?

The job market is seriously lacking when it comes to blockchain developers. Many traditional developers and engineers do not have the skills and experience necessary to build a DApp. As we mentioned before, this new field is growing rapidly, and engineers need to take it upon themselves to learn about blockchain development if they want to have some value on the job market. The demand for blockchain development has skyrocketed. Freelancing websites are seeing a year-over-year increase of more than 35,000 percent in job listings that require blockchain development.

Blockchain developers can help a company or organization bring their blockchain idea to fruition. Blockchain has the potential to reinvent the way business is conducted in so many different industries. If a company wants to leverage blockchain technology for its project, it will need a blockchain developer to help make the dream a reality.

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Where to find Blockchain Developers?

If you want to hire a blockchain developer, you can try placing a traditional job ad on a website like Indeed, but finding candidates with the right experience can be challenging. The number of blockchain developer job postings on LinkedIn more than tripled in 2017 alone.

However, many employers are shying away from traditional job listings as blockchain developers tend to be in short supply and normal job postings simply do not attract the right type of talent for the position.

You will have better luck spending time on the platforms that blockchain developers actually use, like Github and Reddit. These online communities tend to be full of blockchain developers that are looking to show off their expertise, land a job, or learn more about their trade. You can quickly connect with some of the brightest minds in the industry.

The trouble with these communities is that they are not easy to navigate if you are not a developer yourself. Although you can get some great information and some specific tips, it is also difficult to grab hold of any one developer to get the dedicated support you need for a project.

Every blockchain development project will require at least one full-time developer to bring it to successful completion.

The other option is to work with a blockchain developer agency that can provide you with full support for a range of project.

DApps and the blockchain are here to stay. If you’re ready to capitalize on the power of the blockchain, contact the blockchain developers at Ionixx Technologies for a range of services, including blockchain consulting, ICO development, and DApp development.