How To Implement Blockchain for Enterprise Smart Contracts
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Wondering how to implement blockchain for enterprise smart contracts into your startup product?
You’ve come to the right place.
According to a study done by Marketwatch, “The global blockchain market size is expected to grow from USD 3.0 billion in 2020 to USD 39.7 billion by 2025, at an impressive Compound Annual Growth Rate (CAGR) of 67.3% during 2020–2025.”
This makes it an incredibly lucrative market for any real-world company that is able to successfully innovate in it. Here’re a few amazing case studies of companies that hired DevTeam.Space to build their healthcare products:
- Dencenture – Blockchain Mobile App and Web Application
- Medicoin – Healthcare Blockchain-Based Web Application
- ModuleTrade – Healthcare Android and iOS App
Blockchain in the enterprise: A key growth area
Smart contracts: Unveiling the power of blockchain in front of the world
Examples of smart contract use cases
How to implement blockchain-based smart contracts in your enterprise
Planning to implement blockchain smart contracts in your enterprise?
Blockchain in the enterprise: A key growth area
Cryptocurrencies dominate the blockchain landscape, however, they aren’t the only applications of blockchain. Enterprises have entered the blockchain space in multiple ways.
As I have explained in “How to build your own blockchain using Node.js”, blockchain offers decentralization, transparency, and security.
Its distributed ledger technology can help enterprises transform their business processes in real-time.
Blockchain has many enterprise-grade use cases, and they span across several sectors. The following examples of enterprise applications are noteworthy:
- Finance: Several banks and financial services institutions are adopting blockchain to address use cases like settlement processing, custody solution, etc.
- Agriculture/Food: Blockchain improves traceability in supply chain management, therefore, it can improve the tracking of fresh produce. Giants like Walmart are already using blockchain to improve their food supply chain management.
- Advertising/media: The advertising and media companies face the challenge of fraud and copyrights infringements, and blockchain helps with its tamper-proof distributed ledger.
- Entertainment: Entertainment and sporting venues use blockchain to manage their ticketing processes, which can prevent fraud.
- Healthcare: Managing patient diagnostic history and combating counterfeiting of medicines become easier with blockchain.
- Education: The tamper-proof distributed ledger of blockchain helps education institutions ensure the authenticity of certificates.
- Real estate: Governments use blockchain to tamper-proof land registration data.
- The government sector: Governments are increasingly exploring blockchain to improve service delivery to the citizens. Countries like India and China are already seeing a good deal of momentum around this.
The following statistics highlight the current enterprise trends in adopting blockchain technology.
- The global spending on blockchain solutions has reached 6.6 billion US dollars.
- The banking sector is at the top of blockchain market value distribution.
- Cross-border payments are the largest use case of blockchain technology. It accounts for 16% of the blockchain technology market worldwide.
- The US shares 51% of the total blockchain funding.
- 40% of supply chain managers plan to invest in blockchain solutions for efficient and secure work processes.
- Secure information exchange is the top use case in enterprises adopting blockchain technology.
- Binance is the top cryptocurrency exchange globally.
- There are 77.43 million users of blockchain wallets.
- Bitcoin has a 66% share in the blockchain market.
Read more about the use cases of blockchain technology in “10 ways the enterprise is using blockchain”.
Smart contracts: Unveiling the power of blockchain in front of the world
Let me state the obvious first! Smart contracts aren’t blockchain networks, rather they run on top of such networks.
Bitcoin, the most famous application of blockchain emerged a decade ago, and it didn’t offer smart contracts. It remained a peer-to-peer network where participants could send and receive digital currencies. There were no other use cases of Bitcoin.
On the other hand, smart contracts brought the power of blockchain in front of the whole world. Ethereum introduced smart contracts. The following characteristics distinguish blockchain for enterprise smart contracts:
- They are pieces of code running on a blockchain network.
- Smart contracts are open-source, therefore, they are transparent.
- They execute autonomously, and they transfer cryptographic assets based on predefined conditions.
- Smart contracts are stored on a blockchain, therefore, you can’t modify them after you deploy them.
- You can’t reverse the outputs of their execution since the outcome is also recorded on a blockchain.
Read more about smart contracts in “How to deploy a smart contract on Ethereum?”.
Examples of blockchain for enterprise smart contract use cases
The blockchain/crypto ecosystem and the overall technology sector quickly saw the potential of smart contracts, and several important use cases emerged. Check out the following examples:
- Trade finance: Smart contracts are used for workflows automation and to make trade financing more efficient.
- Records management: Consider the case of the healthcare sector. Blockchain smart contracts help with issuing prescriptions, securing diagnostics test results, etc.
- Property ownership: Smart contracts reduce the cost in the real estate sector by making contract execution faster and cheaper.
- Insurance: Smart contracts improve the time-consuming processes in claims adjudication.
- Supply chain management: Businesses use smart contracts to improve the traceability of raw materials and finished goods, moreover, smart contracts improve inventory management.
Read more about smart contract use cases in “10 use cases of smart contracts”.
How to implement blockchain for enterprise smart contracts in your company
I will now explain the steps to implement blockchain-based smart contracts in your enterprise, which are as follows:
1. Project planning
Onboard a project manager, an IT architect, and a team of business analysts, and look for their experience in blockchain implementation. Your planning process will cover the following:
- Defining the requirements and business logic for your project;
- Determining the type of blockchain to use;
- Planning for hosting the blockchain network;
- Identifying the technology stack;
- Budgeting the project;
- Onboarding a development team;
- Developing the blockchain network and smart contracts;
- Reviewing the code;
- Deploying your blockchain application.
Read our guide “What to plan for when undertaking blockchain software development?” for more insights.
2. Choose the right kind of blockchain
You will likely not develop a cryptocurrency as part of your project, therefore, you need to choose the right kind of blockchain. Cryptocurrencies like Bitcoin and Ether use public blockchain networks.
You can’t use such a network due to the following reasons:
- They are open to all, whereas, you can only allow trusted participants to join your enterprise blockchain network.
- Public blockchain networks don’t allow data privacy, whereas, you will likely have sensitive data in your enterprise. You will need to implement access control.
- A public blockchain network like Bitcoin isn’t performant and scalable enough, whereas, you need high transaction throughput and scalability in your enterprise.
You will need to use enterprise blockchain. It allows the setting up of permissioned networks and access control, moreover, it’s scalable and performant.
Read our guide “Public vs private (permissioned) blockchain comparison” for more information.
3. Find a hosting provider for your blockchain network
Since enterprise blockchain networks aren’t already existing public blockchain networks, you will need to build a network. You need a hosting arrangement for this.
Well-known cloud computing service providers offer hosting arrangements for enterprise blockchains. You can choose one of the following providers:
- “Blockchain on AWS”: This is the AWS blockchain platform, and it leverages the impressive cloud capabilities of AWS.
- SAP Cloud Platform “Blockchain as a Service” (BaaS) is a comprehensive platform.
- “Microsoft Blockchain on Azure” is the BaaS offering from Microsoft.
- “IBM Blockchain Platform” utilizes the cloud capabilities of IBM.
All of these BaaS platforms enable you to use reputed enterprise blockchain frameworks like Hyperledger Fabric, R3 Corda, etc.
Read more about these BaaS platforms in “Best blockchain network hosts 2021 – Ethereum – Amazon etc.”.
4. Choose an appropriate technology stack
Find the enterprise blockchain framework that suits your requirements. You can choose from Hyperledger Fabric, R3 Corda, etc. I recommend Hyperledger Fabric. It has many advantages, e.g.:
- It’s an industry-agnostic enterprise blockchain framework.
- Fabric enables you to set up a permissioned blockchain network, which is important in the enterprise context.
- Hyperledger Fabric has a modular architecture, and developers can easily create pluggable components like custom identity management, etc.
- Fabric offers performance and scalability, which are important in the enterprise context.
- You might need a process for sensitive data management. That’s easy with Fabric, thanks to its “Channel” technology for partitioning digital assets.
- Fabric offers rich querying capabilities.
- You can use the “Hardware Security Model” (HSM) of Fabric, which helps to secure digital keys.
Read “Pros and cons of Hyperledger Fabric for blockchain networks” to learn more about Fabric.
You can code smart contracts in Fabric, and these are called “chaincodes”.
5. Budgeting for your project
You will need to estimate the cost of your project, which involves the following cost elements:
- Blockchain infrastructure costs;
- The cost of frameworks and tools as applicable;
- Development manpower costs;
- Other administrative costs.
You can follow our guide “How much does it cost to build a blockchain project?” to estimate this project.
6. Onboard your complete development team
You will need to form the complete development team, therefore, focus on onboarding the following roles:
- UI designers who are experts in designing interactive user interfaces and user-friendly app experiences. Designers should have basic design skills in wireframing and prototyping. These are essential to test design multiple app-building approaches.
- UI designers should be able to design mobile app interfaces according to the app store guidelines. For example, Android developers should be familiar with Material Design Guidelines, and iOS developers should design iOS apps according to Human Interface Guidelines;
- Native Android developers with proficiency in Java and Kotlin programming language, if you are building an Android app;
- Android developers should also be experts in using Android development tools like Android Studio IDE and Android Jetpack libraries for writing high-quality code efficiently;
- Native iOS developers with Swift skills, if you are developing an iOS app;
- iOS developers should be familiar with Apple tools and platforms like XCode IDE for building optimized apps for the Apple store swiftly;
- Developers should also be familiar with cross-platform app development frameworks. Frameworks like Xamarin, Ionic, Flutter, etc. provide developers with extensive library components. They assist app developers in deploying mobile apps on multiple mobile devices using a single code-base;
- Hyperledger Fabric developers with experience in smart contract development;
- Testers with experience in using automated testing tools like Selenium for testing web applications, Espresso for Android apps, and XCTest for iOS app;
- DevOps engineers, able to work with continuous server integrations, configuration management, dependency monitoring, and cloud systems analytics. They should be able to automate app deployment and work with containers;
- Cloud Computing engineers who are familiar with different cloud services like software as a service, platform as a service, and Infrastructure as a service provided by companies like Microsoft, IBM, and Amazon;
- Your cloud computing professionals should be experts in choosing the appropriate cloud service model for your application.
You could find it hard to onboard competent developers, however, our guide “How to find a good software developer” can help.
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7. Study smart contracts from similar projects
Smart contracts are often open-source, therefore, many organizations let other developers view their smart contracts. Based on your blockchain use case for smart contracts, you might want to study existing smart contracts that are similar.
You can get key ideas by studying other smart contracts. Organizations that allow others to view their smart contracts typically store them on repositories like GitHub.
E.g., Microsoft Azure lets you see many of their smart contracts on the GitHub repository named “Applications and smart contract samples”.
8. Build your blockchain network
In this guide, I assume that you will use the IBM Blockchain Platform and Node.js to build your blockchain network using Fabric.
Fabric offers a Node.js SDK, and you can read about it in “Hyperledger Fabric Client (HFC) SDK for Node.js”.
The following points about this SDK are noteworthy:
- It offers robust APIs to communicate with the Fabric blockchain network.
- You can configure your network by following the instructions in the GitHub repository of the Fabric Node.js SDK.
- Your development team can use this SDK to submit transactions to Fabric chaincodes, moreover, the SDK offers querying capabilities.
- You can create channels for confidential transactions using this SDK.
- This SDK helps you to create different types of nodes on the network, furthermore, it enables you to register new users and revoke existing users.
- You can use this SDK for chaincode deployment and monitoring events at block and transaction levels.
Use this SDK on the IBM Blockchain Platform, which involves the following:
- Follow the instructions in “Getting started with IBM Blockchain Platform”.
- Deploy the IBM Blockchain Platform, and install cURL to download Fabric sample code by following instructions in “Fabric prerequisites”.
- Download Node.js and NPM.
- Install Fabric sample code by using the guide “Install samples, binaries, and Docker images”.
9. Code chaincodes
Now that you have built your blockchain network, you can code chaincodes. Read “Writing smart contracts” to learn how to write chaincodes on the IBM Blockchain Platform, and code them using Node.js.
10. Review chaincodes
You ought to test chaincodes, i.e., smart contracts in the Fabric parlance. However, that’s not enough since smart contracts are tamper-proof once you deploy them. You also need to review them thoroughly.
Do the following to review your chaincodes:
- Lock down the source code and conduct a preliminary code review.
- Conduct a static code analysis followed by a code quality analysis.
- Analyze the presence of known vulnerabilities like reentrancy, shadowing of variables, overflows, incorrect cryptographic signature validation, etc.
- Analyze whether the chaincodes meet their functional requirements.
- Report all observations and bugs and track their closure.
Our guide “Undertaking a blockchain code audit and its importance” can help you.
11. Test and deploy your chaincodes and app
It’s now time to test and deploy your chaincodes and app, therefore, follow the instructions in “Getting to know the Hyperledger Fabric continuous integration (CI) process”. This guide covers the following:
- Using Docker containers for your deployment;
- The “Build” process;
- Using Jenkins for CI;
- The “Release” process.
Do the following:
- Deploy your chaincodes.
- Add network API endpoints to your app.
- Enroll an app to prove its authenticity. Register the app using the client-side certificates that you generated while enrolling it.
Planning to implement blockchain smart contracts in your enterprise?
This guide will help, however, remember that blockchain development skills are niche. Blockchain technology development like Hyperledger Fabric development skills are even more specialized, therefore, this project promises to be a complex one.
Engage a reputed software development company for a project like this. A software development company skilled in complex blockchain technologies will help you in building your market-competitive blockchain for enterprise smart contracts solutions.
Outsourcing software developers is becoming an increasingly popular trend among businesses today. The global market value of the software and IT outsourcing industry has crossed the $92 billion mark, according to Statista report.
There is limited technical talent available in a region as compared to an extensive talent pool you easily find in the market of remote developers.
Most likely, you will have to compromise on the technical expertise and domain knowledge of the available software developers. This will reflect in your end-product as blockchain technology requires expert development skills.
Software developers at software development companies undergo a thorough vetting process and technical interviews before becoming part of the development team. So, you can be sure that the top-quality talent is working on your software project.
You will just have to go through the assessment procedure once when partnering with a software development agency. You can find out about the past projects, case studies, and client reviews on the company’s website.
Partnering with an expert software development company gives you an option of expanding your current technical team as your software project grows. You can hire developers, designers, and testers as per your project needs.
Moreover, these blockchain software developers are managed by the technical manager assigned by the software company.
The technical managers are skilled senior software engineers. They have experience in developing and deploying software solutions similar to your project.
They not only manage the development team but also assist you in adopting the best development approach.
Read our guide “How to find the best software development company?” to find your most suitable software development partner for building a blockchain for enterprise smart contracts.
Still looking for expert blockchain software developers? Get in touch with DevTeam.Space by filling out this form and discuss your software project requirements with a competent technical manager.
Frequently Asked Questions
Blockchain is a database ledger technology that allows data blocks to be stored in what is effectively a chain of blocks that create a ‘blockchain’ of data. Every time a new data block is added, it is joined to the last in an unending chain back to the original data block.
For Ethereum, you can use Solidity which is a programming language specifically designed to create smart contracts. You will need expertise in blockchain development, however, If you don’t, onboard a blockchain developer from a company like DevTeam.Space.
There are numerous blockchain platforms that support smart contracts. The most famous is Ethereum. Others include Waves and NEO.