Building Decentralized Applications on BlockChain Technology
by Navdeep Singh Gill | 31 January 2018
What is a Decentralized Applications?
Decentralized applications (or Dapps) include serverless provisions that can be run mutually on the customer side and inside a blockchain based dispersed network, for example, such that Ethereum. The customer tool manages the front-end and consumer credentials, at the same time as the back end runs within a disbursed network of computers that offer for the processing and storage necessities.
Features of Decentralized applications
Open Source: The application’s code structure must be mostly available for public research.
Decentralized: The application’s data should be stored on a public and decentralized blockchain platform.
Incentive: The application must utilize tokens/digital resources to reward its network supporters.
Protocol: The application must generate tokens using a cryptographic consensus algorithm to demonstrate proof of value.
Building Decentralized Applications
Publish White Paper on the DApp
Publishing a white paper defining the blueprint, features, and technicalities of the DApp is crucial, and is also the very first step. Your whitepaper should address a problem you wish to solve. It should state the intentions and goals of the Dapp.
Gain community involvement by stating the plan and discussing the proportion that will go to the development budget and other essential allocations. Being transparent about the distribution of tokens is critical.
When all is stated and achieved, after gaining the price range and tuning the idea, it’s time to start development. And once you have got commenced, it turns crucial to percentage weekly or month-to-month updates that help in constructing surroundings for community individuals.
Launch the Product
Launch the product with release notes stating the maintenance plans so that the community is involved.
Overview of BlockChain Technology
There are different kinds of people in the world, who have different languages, different cultures, different eating styles but one of the things that brings them together is money, which is everybody's necessity. In today’s fast moving and developing era, we need a safe and secure platform to be able to make online transactions, for whatever purpose they might be. In whatever transactions we do, banks are the third party involved in it, and they have all records of our transaction and of one’s account holdings. You can also explore more about how to Deploy Blockchain App with Microservices in this blog. Blockchain Technology aims at removing this third-party involvement and keeping the transactions only limited to the sender and the receiver. A broad idea behind this technology was to build a secure platform where safe transactions could happen in a very transparent manner. With the help of Blockchain technology, we can save ourselves from any kind of overheads and third party involvements and send or receiving money could be as hassle-free as sending emails. BlockChain Technology is a peer to peer software technology that protects a digital piece of information.
Understanding What is BlockChain Technology?
The origin of Blockchain technology is a little uncertain and still for experts to find out for sure. It is said to be invented by a person or a group of people known by the name of Satoshi Nakamoto in the year 2009. Initially, it was developed to enable digital transactions between two parties in an anonymous fashion, without needing a third party to perform verification of the transaction. The main inspiration behind the development of such a great technology at the time was to facilitate the transfer of Bitcoins, but it later caught on and is today being used for many other important things. The blockchain technology is an open system for transaction processing that follows a distributed ledger approach whose goal is to automate the processes and reduce data storage costs and provide data security and eliminate duplicates. We can also say that BlockChain is a method of recording data, i.e., transactions, contracts, agreements that need to be recorded independently and verified as they are happening. A very good way to understand the concept of Blockchain technology is the google docs analogy. Just the way Google Docs shared between two people enables both of them to make changes to the document at the same time and visible to the other party, similarly the transparency of blockchain works. BlockChain sounds like a revolution and is the underlying Technology behind Bitcoin. Truly, BlockChain is a mechanism that brings everyone to the highest degree of accountability, i.e., no more missed transaction, no more third party involvement in the transaction. Blockchain guarantees the validity of a transaction by recording it not only on the main register but also by connecting distributed system of registers, and all of which are connected through a secure validation mechanism. It may have been invented to create the alternative currency Bitcoin but can be used for other purposes like online signature services, voting systems, and many other applications. It's a good way instead of sending our payment information through servers, in BlockChain Technology all transactions are Copied and cross-checked between every computer in a system, which becomes very safe at scale. BlockChain Technology is a type of distributed ledger that means a database that is consensually shared and synchronized across network spread across multiple sites, institutions. Blockchain provides an unalterable, public record of digital transactions in packages called Blocks. These digitally recorded “Blocks” of data are stored in a linear path, and each block contains cryptographically hashed data.
Key BlockChain Applications
Capable of transforming
Making transaction faster
Seamless and simultaneous integration of transaction
Settlements and ledger updates directly between multiple parties
Creates a secure way to share information
Conduct transactions without the need for a single, central party to approve them.
Only authorized network members can see details of their transactions, providing confidentiality and privacy.
All updates to the shared ledger are validated and recorded on all participants shared ledgers, which drives security and accuracy.
All updates to the ledger are unchangeable and auditable. Network members can accurately trace their past activity.
How Does BlockChain Technology Works?
The Blockchain technology enables direct transactions between two parties without any intermediary such as a bank or a governing body. It is essentially a database of all transactions happening in the network. The database is public and therefore, not owned by any one party, it is distributed that is, it is not stored on a single computer. Instead, it is stored on many computers across the world. The database is constantly synchronized to keep the transactions up to date and is secured by the art of cryptography making it hacker proof. The basic framework on which the whole blockchain technology works is actually two-fold first is gathering data (transaction records) and the second is putting these blocks together securely in a chain with the help of cryptography. Say a transaction happens, this transaction information is shared with everybody on the blockchain network. These transactions are individually timestamped and once these transactions are put together in a block, they have timestamped again as a whole block.
Now, this complete block is appended to the chain in the blockchain network. Other participants might also be adding to the network at the same time, but the timestamps added to each block takes care of the order in which the blocks are appended to the network. The timestamps also take care of any duplicity issues hence, everybody on the network has the recent version of the chain available to them. The main cryptographic element that makes this whole system tamper-free is the hash function. Each block's information is taken and a hash function is applied to it. The value computed from this is then stored in the next block and so on. So in this way, each block’s hash function value is being carried by the next block in the chain which makes tampering with the contents of the block very difficult. Even if some changes are made to the block, one could easily find out because that block’s hash value would not be the same as the already calculated value of the hash function that was stored in the next block of the chain. Blockchain works as a network of computers. Bitcoin photography is used to keep transactions secure and also shared among those in the network after the transaction is validated, the details of the transfer are recorded on a public ledger that anyone on the network and sees in the existing financial system essentially ledger maintained by the institution access the custodian of the information. But on a blockchain the information is transparently held in a shared database and no one party access the movement, thus increasing the trust among parties.
How Bitcoin Transaction Works?
For everyone, it's easy to download a simple piece of software and install it on the computer. But to use Bitcoin which is a decentralized be out of your system, we do not need to register an account with any particular company or handle or any of your personal details, once you have a wallet you can create addresses which effectively become your identity within the network. Suppose party A wants to send money to party B in the form of Bitcoins. For both party A and Party B, the transaction is collected in a block. A block record some or all of the most recent Bitcoin transactions that have not yet entered any cry of blocks, the new block is then broadcasted to all the parties or so-called nodes in the network the parties in the network approve that the transaction is valid through a process called mining.
Building Blocks With BlockChain
A very simple definition of blockchain is that “the blockchain is distributed, digital ledger.” One of the key features of the blockchain is that it is a ‘Distributed Database’ that is to say, the database exists in multiple copies across multiple computers.
Concept of BlockChain Technology
Shared View - One of the most powerful features of BlockChain Technology is it’s shared a view of data for all participants in a peer-to-peer network. Transaction records can be shared but cannot be altered. Shared views have two approaches i.e. Traditional Approach where each party maintains their own independent ledger and Blockchain Approach where all parties share and maintain the same ledger.
Cryptography - Cryptography is used to establish identity and protect the integrity of the underlying data. One of its concepts is hashing and this concept is used in the blockchain technology. Hashing is an effective means of determining if any piece of data has been changed or not. It generates a fingerprint for a piece of data by applying a cryptographic function to it. Changing one character in the original string results in a completely different hash value. Also, the original string cannot be reverse engineered from the hash function.
CryptoCurrency - Everything You Need to Know
Cryptocurrency is a virtual currency which uses cryptography for security. The main defining features of this currency which make what it is are its decentralized nature, transparent ledgers and it's security feature which makes it resistant to any kind of malicious manipulation. Bitcoin is the is the first and the most famous cryptocurrency. It was invented in 2009 and has seen an enormous rise in value ever since. The cryptographic technique that it follows is SHA-256, it is a hash function that is used to encrypt every transaction before being added to the blockchain. The underlying and main aspect on which cryptocurrency works is that all the transactions happen in a transparent and decentralized ledger for everyone to see and verify if need be. One can go back to the very first transaction of a user to verify their credibility by tracking back in the ledger.
Benefits of CryptoCurrencies
The advantages of cryptocurrency are much fold. To name a few would be:
No Fraudulent activities - Transactions happening in this process cannot be reversed or in any other way be tampered with, without at least letting anybody know. The whole architecture is such that any discrepancies cannot go unnoticed and can be detected.
Faster transactions - The traditional way of settling payments involves a trusted third party, namely banks mainly, this makes the process take more time. In cryptocurrency, since the payments are peer-to-peer without any involvement of a third party, the payment process happens immediately without any delay. No Overheads- With the elimination of third party involvements, the overheads in the form of service fees that these institutions charge are also eliminated. This makes cryptocurrencies more cost-effective.
The integrity of identity - Unlike credit cards, which always have a risk of getting misused since all the information regarding it is given to the vendor, this mode of payment does not divulge any more information than required and only pushes the amount of money that is required to be paid.
How is Blockchain Changing Money and Business?
Blockchain technology is likely to have a great impact on the next few decades. Currently, Blockchain is not the most thundering concept in the world, but it is believed that it will be the next generation of the internet. For the past few decades, we've had the internet for information. The crucial difference between Internet and BlockChain is that the Internet enables the exchange of data, blockchain could enable the exchange of value, i.e., it could allow users to carry out trade and commerce across the globe without the need for payment processors, curator, and settlement and adjusting entities. Trust is a very crucial thing, and blockchain is one of the biggest technologies that peer. Trust enables people everywhere to trust each other and transact peer established, not by some big institution, but by collaboration, by cryptography and by some smart code. And because trust is native to the technology, so we can say that it's “The Trusted Protocol.”
Key Features Of BlockChain
It cannot be corrupted, altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network and even if anyone is successful in making some change, it wouldn't be possible without getting caught.
Blockchain technology makes replacement of trusted third parties possible as all participants have equal access to the value chain to cloud-based assets that verify each party’s identity.
It makes material cost reduction possible through the elimination of expensive infrastructure and third party huge fees.
Elimination of error handling through real-time tracking of transactions with no double spending.
Full automation of transactional processes, from payment through settlement.
Removal of documentation bottlenecks caused by duplication.
Transparency of data is embedded within the network as a whole, by definition it is public.
Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot be controlled by any single entity.
Has no single point of failure because of the decentralized nature.
BlockChain Applications That Are Transforming Society
The blockchain is proving to be of great potential across a wide range of business applications. For example, financial institutions can settle security issues in minutes, instead of days. Manufacturers can reduce product recalls by sharing production logs with original equipment manufacturers and regulators. Businesses of all types can more closely manage the flow of goods and related payments with greater speed and less risk.
Some of more Blockchain Application used in the present era are as follows:-
BlockChain Financial Services
Blockchain technologies are reshaping the landscape of financial services. More Benefits are gained using this technology, especially in back-office operations and to improve transparency, which is highly recommended for audit and regulatory perspective.
Blockchain for Digital Identities
Blockchain technologies make tracking and managing digital identities efficient and secure resulting in less fraudulent incidents. Blockchain technology can be applied to identify applications in a number of areas related to this.
Blockchain for the Internet of Things (IoT)
Blockchain technology provides scalability, privacy, and reliability in the Internet-of-Things. Blockchain technology can be used in tracking billions of connected devices, enable the processing of transactions and coordination between devices. This approach will eliminate single points of failure, creating a reliable ecosystem for devices to run on.
Blockchain Based Payments
The Blockchain technologies created a new truly peer-to-peer environment of money transfer. Neither there is a need for a centralized party or 3rd person to control a cryptocurrency, nor is there any type of restrictions or rules of usage. Cryptocurrencies provide people across the globe with instant, secure, and frictionless money.
Blockchain Smart Contracts
These are digital contracts that follow the IFTTT (if-this-then-that) code that enables these contracts to be self-executing. In real life, an intermediary ensures that all parties follow through on terms. The blockchain not only waives the need for third parties but also ensures that all ledger participants know the contract details and that contractual terms implement automatically once conditions are met. These smart contracts can be used I many situations like property deals, insurance premiums, crowdfunding agreements etc.
Blockchain for Real Estate
BlockChain technology is helpful for a paper-record based industry as it allows them to store their records digitally reducing any kind of fraud risk. Real estate industry chooses to adopt blockchain technologies for essential functions such as payment, escrow, and title; this could create unprecedented efficiencies and cost savings.
Blockchain in healthcare can be used to encode and store health records in the form of private key which would give access only to specified individuals.The same mechanism may be used to ensure that studies are performing thru legal guidelines Documentation of surgeries could be stored on a blockchain and sent to concerned providers as proof-of-delivery.
Using supply chains as an application of blockchain, we can document every transaction.With the help of supply chain, we can reduce the need for manual human input and make the entire chain more efficient.This human verification adds a whole layer of blameworthiness that can be better tracked and monitored by regulators which further increases productivity.
The Future of BlockChain Technology
There is a very good chance that the future of finance will be dominated by blockchain technologies. Blockchain Technology is such a global currency that resulted in massive cost reduction for all market participants and has a potential of changing the global market banking. The world is gradually getting pulled towards this technology. All the industries and even governments are discussing the revolution it is. Blockchain technology has gained attention mainly for two big reasons, i.e., The transparency and accessibility it offers, and the automation of tasks using smart contracts. Future scope of blockchain technology is vast and can lead to following incidences:-
Blockchain has the potential to create a whole new industry of opportunities and disrupts existing technologies and processes.
Blockchain technology will make the world even smaller than the existing, as it increases the speed and efficiency of transactional activity.
Elections are currently expensive, difficult and tiring. Thanks to blockchain technology, they will soon be instantaneous and much more efficient
A new blockchain startup has claimed its software could help track down criminals faster and cheaper than ever.
New technologies such as blockchain have the potential to reduce cybersecurity risks by offering identity authentication through a visible ledger.
BlockChains can support the creation of new, more efficient business processes. Now as you understand the basic fundamentals of BlockChain Technology, you need to decide whether BlockChain fits your needs or not.
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Decentralized Application (dApp) Development
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