In 2017 and 2018, the blockchain as an idea finally broke through to reach mainstream awareness, with people all over the world choosing to invest in Bitcoin, Ethereum and other crypto currencies.
But underneath the crypto mania is a technology that has huge potential and practical applications: the blockchain itself. Some statistics estimate that by 2021, blockchain market spending could grow as high as $9.7 billion!
Today, we’re going to take a look at the potential for blockchain technology to be used in the world of app development:
What are the potential benefits of the blockchain in app development?
- It is entirely transparent. One of the key selling points of the blockchain is that it offers a full, incorruptible record of every single transaction point. In this sense, an app built on blockchain offers a level of trust that other forms of database can’t.
- Blockchain is adaptable. Naturally, certain types of apps will suit the blockchain more than others. But, essentially, any app that makes use of a database could be tailored to make use of the blockchain. It’s for this reason that several large multi-national banks – HSBC, for example – have started to fund their own research into the blockchain.
- Smart contracts. This is a specific feature rather than a general benefit, but it’s worth highlighting. Smart contracts are a key perk of the blockchain, with the potential to digitally facilitate credible transactions without the need for a third party. Imagine being able to complete an escrow-type transaction, without the need for escrow itself – that’s the potential of blockchain-based apps.
- Security. Any company responsible for designing an app that holds customer data – which includes everything from social media apps to e-commerce stores – will know how vital it is to ensure that data is secure. One bad security breach can mean years of bad PR. The blockchain offers a level of security that more traditional databases simply can’t. And, of course, the option of paying using crypto-currencies only increases security.
- Supply-chain potential. Blockchain has a lot of potential for improving company supply chains, ideal for larger retail businesses or online shops. Essentially, a smart contract can be used so that when a customer adds a new item to their shopping basket, a real-time alert can be made to the inventory, and the product ordered in advance. This way, stores can pre-empt sales, and completely avoid the possibility of running out of stock.
- Cryptocurrencies. We’ve mentioned this above, but it’s worth-re-iterating. Crypto currencies are currently down in the world of investing, but that doesn’t mean the potential for using them in payment systems has gone away. Crypto-currencies have huge potential for becoming the safest, most incorruptible form of online payment around. In a world where financial cyber-crime is only growing, don’t rule out crypto currencies just yet.
What are some real-world examples of how blockchain could be used?
Right now, a number of industries are already making use of blockchain in several different ways. Some of these uses are in their early stages of development, but they offer excellent examples of the potential blockchain has.
Cross-border transactions. Anyone who’s transferred money from country to country knows how fiddly the process can be. Blockchain ledgers offer the potential to do this in a quick, secure transaction that doesn’t require any international intermediaries (Western Union being a good example).
Claims processing. In the world of insurance, fraudulent claims are a constant issue. Blockchain allows for complete transparency, cutting down the risk of incorrect data being used in a claim, as well as allowing insurers to be sure that any claims are being made by the true policy holder.
Music licensing. Keeping an accurate record of music licensing to ensure the artists receive payment has always been problematic. For this reason, Spotify recently purchased blockchain startup Mediachain Labs to develop software capable of achieving this. With Spotify being top of the tree in the streaming world, you can expect other streaming services to follow suit.
Loyalty services. A number of apps are already making use of blockchain to simplify customer royalty schemes and loyalty programs. Loyyal is a good example: this app has enabled companies to create more bespoke reward schemes for their customers by using the blockchain’s transparent ledger of what the customers have purchased.
Healthcare. In the world of healthcare, blockchain technology is being used more and more frequently. Ensuring medical records remain up to date and accurate is a key part of providing excellent healthcare, and the blockchain’s transparent ledger is ideal for this purpose. MedRec is an example of exactly that – it’s already helping healthcare providers to save time and money in maintaining patient records without sacrificing quality of care.
Real estate purchase. Real estate was always going to be a key potential area for smart contracts, and Deedcoin is currently getting up and running. Rather than taking the traditional 6% commission, Deedcoin claims to be asking for just 1%, and is aiming to change the way people in the US buy property.
What are the potential issues for using blockchain in app development?
As you can see, blockchain is already being used in a number of ways, and has a lot of potential.
However, there are several things you’ll need to take into account when choosing to make it a part of your app.
The first issue is that, by nature, developing and testing code on a distributed application can be tricky. Testing and debugging on one machine is difficult, but within the blockchain, every change must be coordinated with other software across the network.
This, by nature, means that developing on the blockchain will typically be more expensive and may take longer. It’s important to ensure that your expectations are set – the reward of blockchain is huge, but it will take work to get there.
Another important factor that you’ll need to take into account is the legal principle. Remember, any transaction made by your business must be legislated, and the legal frameworks surrounding blockchain can be complicated.
Put simply, there is simply no alternative to getting full professional legal guidance when choosing to implement blockchain technology. Legal parameters are still being worked on across the globe, simply because the tech is still in relative infancy. As such, there remains a lot of uncertainty across the board.
In other words, consult a specialist in blockchain regulations before you decide to proceed with your project. It could save your company a lot of money in the long-run.
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The blockchain app development world is still very much in its inception. There is huge obvious potential, but it is still being explored. By acting now, you have the potential to get in on the ground floor – particularly if your industry is behind the curve.
If you’re interested in making use of blockchain technology within your next app project, get in touch with Iconic Solutions today. We’d love to help you get your next project off the ground.