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How To Implement Blockchain Smart Contracts Into Your Enterprise Product

Enterprises all over the world are rushing in to exploit the potential of blockchain. The use case of implementing a crypto payment system in an enterprise often comes to mind, and I have touched upon this in “Implementing a blockchain cryptocurrency payment system into your enterprise product”. However, you certainly don’t need to confine yourself to that!

If you are a senior business leader in an enterprise, then crypto is certainly not the only way for you to realize value from the blockchain technology. Smart contracts have extended the benefits of blockchain in ways that you could hardly even imagine earlier.

You can take that giant leap towards greater efficiency in your enterprise by utilizing smart contracts. Wondering how to do that? Well, this guide on implementing blockchain-based smart contracts into your enterprise product is just what you need! Read on.

Contents

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

blockchain future

Cryptocurrencies dominate the blockchain landscape, however, they aren’t the only applications of blockchain. Enterprises have entered the blockchain space in a big way.

As I have explained in “How to build your own blockchain using Node.js”, blockchain offers decentralization, transparency, and security. Its distributed ledger can help enterprises to transform their business processes.

Blockchain has many enterprise use cases, and they span across several sectors. The following examples 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 can improve traceability in supply chain management, therefore, it can improve the tracking of fresh produce. Giants like Walmart are already using blockchain to improve its food supply chain management.
  • Advertising/media: The advertising and media companies face the challenge of fraud and copyrights infringements, and blockchain can help with its tamper-proof distributed ledger.
  • Entertainment: Entertainment and sporting venues can 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 can help education institutions to ensure the authenticity of certificates.
  • Real estate: Governments can 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.

Read more about these use cases in “10 ways the enterprise is using blockchain”.

Smart contracts: Unveiling the power of blockchain in front of the world

smart contract uses

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 P2P network where participants could send and receive digital currencies, and you don’t have 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 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 outcome of their execution since the outcome is also recorded on a blockchain.

Read more about smart contracts in “How to deploy smart contract on Ethereum?”.

Examples of 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 can automate workflows and make trade financing more efficient.
  • Records management: Consider the case of the healthcare sector. Blockchain smart contracts can help with issuing prescriptions, securing diagnostics test results, etc.
  • Property ownership: Smart contracts can reduce the cost in the real estate sector by making contract execution faster and cheaper.
  • Insurance: Smart contracts can improve the time-consuming processes in claims adjudication.
  • Supply chain management: Businesses can use smart contracts to improve the traceability of raw materials and finished goods, moreover, smart contracts can improve inventory management.

Read more about smart contract use cases in “10 use cases of smart contracts”.

How to implement blockchain-based smart contracts in your enterprise

I will now explain the steps to implement blockchain-based smart contracts in your organization, which are as follows:

1. Project planning

Onboard a project manager, an IT architect, and a team of business analysts, and look for experience in blockchain implementation. Your planning process will cover the following:

  • Defining the requirements 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, however, you can only allow trusted participants to join your enterprise blockchain network.
  • Public blockchain networks don’t allow data privacy, however, 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, and you need high transaction throughput and scalability in your enterprise.

You will need to use enterprise blockchain. It allows 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 giants 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 2020 – 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., and 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 to process sensitive data. That’s easy with Fabric, thanks to its “Channel” technology for partitioning data.
  • 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;
  • Web developers with Node.js skills, if you are building a web app;
  • Native Android developers with Java skills, if you are building an Android app;
  • Native iOS developers with Swift skills, if you are developing an iOS app;
  • Hyperledger Fabric developers with experience in smart contract development;
  • Testers;
  • DevOps engineers.

You could find it hard to onboard competent developers, however, our guide “How to find a good software developer” can help.

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 smart contract use case, 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:

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:

  • Lockdown 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;
  • Testing;
  • The “Release” process.

Do the following:

  • Deploy your chaincodes.
  • Add network API endpoints to your app.
  • Enroll the app to prove its authenticity and 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. 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, and read our guide “How to find the best software development company?” to find one.