In today's digital age, software development is at the heart of innovation across various industries. From finance to healthcare, from supply chain management to entertainment, software solutions drive efficiency, transparency, and accessibility. However, as technology evolves, so do the challenges and opportunities faced by developers. One of the most revolutionary advancements in recent years has been blockchain technology. Initially known as the underlying technology for cryptocurrencies like Bitcoin, blockchain has since evolved into a powerful tool with far-reaching implications for software development.
Understanding Blockchain
Blockchain is a decentralised, time-stamped digital ledger technology, distributed among databases offering transparency and tamper-free protection. In other words, it’s digital recording technology that records each and every transaction and change in a data block. These same data blocks are stored across several computers in a network. The computers are known as nodes. To alter the data in any blockchain network, all the data blocks need to be altered. This makes data tampering almost impossible, thus ensuring a transparent & dependable network. Therefore, blockchain are now being used to store & track financial transactions, as well as property records, and even voting records.
How Does a Blockchain Work?
To understand how blockchain technology is revolutionising modern software development, understanding the work process of a blockchain network is crucial. The nature of a blockchain network does have a resemblance to its name. In other words, it’s a chain of secured data blocks that are stored across different devices in a network. There are mainly three elements in a regular block:
- Data: As blockchain is still being used as a data storing & tracking technology, data is the most important part of a data block. Here, data can refer to any kind of information such as details of a transaction, time, receiver, sender etc.
- Hash: Hash refers to a tracking module in a blockchain. Each hash is always unique and identifies a data block along with all its content.
- Hash of Previous Block: Each block contains the hash of the previous block. This is what makes the network like a chain as it removes the possibility to insert a new block without altering the other blocks.
Checklist
Why Is Blockchain Secure?
The fundamental characteristic of blockchain is that the data can not be modified once recorded. There are primarily three ways a blockchain secures itself. The security of the blockchain is highly correlated with the components of its data blocks and the nature of its networks.
Firstly, as each block contains its own hash and a hash of the previous block, any one block can’t be altered. Changing the data in a block changes the hash of the data block. As the following block has the hash of the previous block, the changed hash becomes invalid. This is the first layer of security.
Secondly, there are additional security measures known as consensus mechanisms. Usually. there are two major mechanisms, ‘proof of work’ and ‘proof of stake’. Proof of work is the older version where immense processing power is required. This makes it impractical for the attackers to modify the blockchain system. On the other hand, ‘proof of stake’ involves ‘validators’ for each network to validate new transactions. In any way, both of these mechanisms prevent any unwanted alternations in the data blocks.
Thirdly, to modify the data, all the subsequent data blocks need to be modified. However, that is not possible due to the decentralised nature of blockchain. The data is distributed on different nodes of a network. So, even if a hacker tampers with one of the nodes, the data will revert back to its original form based on the data on other nodes. All these security characteristics of a blockchain network lay the ground for its advantages.
How Blockchain Impacts Software Development
Blockchain is the technology that is going to impact almost every aspect of the digital world. Software development is no exception. More importantly, software users are becoming increasingly concerned about safety, security, transparency, etc. Blockchain can revolutionise this particular aspect due to its inherent security measures.
1. Enhancing Security & Trust
Blockchain fosters trust & security on a different level. By utilising blockchain technology, software developers can build fully tamper-resistant apps. The decentralised, time-stamped nature of the blockchain, paired with additional security measures, makes it impossible to change any data. All the transactions are cryptographically secured. In the age of countless internet fraudulents, blockchain can be the perfect tool for developers to ensure security and gain trust.
2. Ensuring Transparency & Traceability
Tracing financial activities can be a bit tough. However, nowadays many financial institutions are implementing blockchain technologies in their app to ensure maximum transparency. As blockchain records every transaction, such software leaves no scope for double spending of the same money. It also lets the user to a product and its previous owners/handlers.
3. Introducing Decentralised Applications (DApps)
Apps or software are often vulnerable to malware attacks as they depend on a single server. However, developers can now design decentralised apps using the decentralised nature of the blockchain. Such apps have their resources spread over a network, making them less vulnerable to threats.
4. Implementing Smart Contracts
Smart contracts are programmable contracts that self-execute a function when predetermined conditions are met. For example, in international trade, when delivery is fulfilled, the deposited amount can automatically go to the seller without the help of any banks. However, implementing blockchain into smart contracts can be very critical. This adds a new dimension to software development.
5. Increased Efficiency
Software development revolves around the goal of making a process more efficient & smoother. As discussed previously, blockchain can remove banks or other third parties by implementing smart contracts. Such removal can make the process significantly more efficient.
Most Suitable Industries for Blockchain Implementation
Although software development is a separate industry, it is now linked with almost all industries to ensure digitalisation. There are a few industries which are particularly prone to being impacted by upcoming blockchain technologies. Naturally, software developers serving those industries need to be updated on the new technologies and requirements. We talked about 5 of those industries to give you an early picture of the future.
1. Banking
The banking industry will be the most drastically impacted by blockchain technologies. Blockchain technology is still mostly used for recording financial transactions. By implementing blockchain, developers can develop software that can transact money securely without the help of any banks. Besides, software for overseas payments can ensure more secure & guaranteed transactions for international business.
2. Supply Chain Management
Supply chain management is a relatively new concept. However, the whole world is leaning towards more efficient and reliable supply chains. The supply chain consists of many segments such as production, distribution, storage, value-added services etc. Perfect integration among different stakeholders of the supply chain is the ultimate way to achieve efficiency. Blockchain-based software can play a vital role here. For example, in a cold supply chain, tracking container temperature is a crucial thing. This particular issue gives birth to many disputes. Blockchain-based software can easily bring solutions to such disputes as it can precisely record the timing & temperature of a container. Without the threat of data tampering, international traders can easily rely on such software to ensure the quality of the products in a cold supply chain.
3. Cybersecurity
Cybersecurity is perhaps the second industry to get this much impacted by blockchain software. The intrinsic secure nature of blockchain serves perfectly for this industry. For example, a hacker needs to hack hundreds or even thousands of computers, all at once, to alter simple data. The distributed nature makes it almost impossible for the hacker to get control of the network. Blockchain-based software can ensure IoT security, DNS security, data transmission protection, DDoS security, etc.
4. Energy
The global energy industry is always looking forward to reducing energy consumption & energy waste. However, tracking energy consumption requires increased clarity. However, businesses are not eager to share their usage data in public Blockchain provides the opportunity to track energy consumption privately and securely. Besides, blockchain-based software can also be used to identify points of waste or over-consumption to increase efficiency.
Besides these industries, blockchain-based software will soon impact the medical, real estate, capital market, insurance, retail, media, video game, etc industries on a massive scale.
Summing Things Up
Blockchain ensures security & transparency, qualities that are too valuable in the 21st century. From smart contracts to decentralised apps, many software developers have already started to develop blockchain-based software. Blockchain is not a mere gimmick anymore. Rather it is a tool that is shaping the landscape of the software development industry. However, revolutionising software development won’t happen overnight. But the steady and sure growth of blockchain technologies tells us one thing for sure. Blockchain is the future of software development.
Frequently Asked Questions
What are the most popular blockchain platforms?
The most popular blockchain platforms are Ethereum, IBM Blockchain, Hyperledger Fabric, Tezos, Stellar, etc.
Can blockchain technology be integrated into existing software systems?
Yes, blockchain technology can be integrated into existing software systems through various means, such as blockchain APIs, blockchain as a service (BaaS) platforms, etc.
What is double-usage of money?
Double-usage of money or double-spending is a term that describes spending the same digital currency multiple times.
What companies use blockchain?
Some of the world’s biggest companies use blockchain technology such as IBM, Microsoft, Walmart, Google, etc.
