A brief rundown of what blockchain is, how it’s being used, and the role of blockware in software and app development

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Investment in blockchain and cryptocurrencies soared in the first half of this year, with $8.7 billion raised, according to a recent report by KPMG. To put that figure in context: $8.7 billion is more than twice the level seen throughout the whole of 2020. This might come as a surprise, given the mixed news coverage of blockchain and the confusion around the terms and its definitions.

As a mobile app and software development agency, blockchain is something we’re often asked about by our clients. We could easily write an entire blog series on the topic, but, to keep things simple, we’ll give a brief rundown of what blockchain is, how it’s being used, and the role of blockchain in software and app development. And if by the end of your read, you still have a mental block around blockchain then give us a call or send us an email.

What is blockchain?

Blockchain is probably easiest to think of as a type of database. It stores pieces of information in ‘blocks’ that are linked together. New information can be added to a blockchain – as new blocks that are linked to the existing ones. Once they’ve been added in blocks cannot be removed. 

The database – the blockchain – and these subsequent movements of data are visible to anyone accessing and using it. Furthermore, the blocks are given timestamps so that the chronology and history of the blockchain can also be seen and scrutinised by its users. They can also be encrypted for extra security.

Another important point to note is that blockchain and its governance is distributed rather than centralised. So, there’s no single party or person who owns and manages the database. If you use a blockchain you don’t necessarily have to know and trust the other parties and people who are also using it. The structure and transparency of the framework mean it is accurate and the information it contains can be trusted. 

These distinctive characteristics are what makes it different to just storing data in a database.

What is blockchain used for?

Blockchain is most commonly associated with cryptocurrency, and it’s perhaps for this reason (and the volatile nature of cryptocurrency) that it’s had some pretty mixed press in the past. Cryptocurrency is a means of financial exchange, and many different types of cryptocurrency exist, the most well known being bitcoin.

Unlike traditional currency – like pound sterling or the Euro – cryptocurrencies are entirely digital. Transactions can be logged and traced in blockchain, and as a result peer-to-peer transactions can be secured, trusted and verified without needing to be overseen by a central party. Think of a central bank and its role in processing a payment in pound sterling, for example, versus a transaction made by bitcoin, which happens via blockchain. 

The most common use case for blockchain, according to Deloitte’s 2020 Global Blockchain Survey, is, unsurprisingly, for digital currency and payments. However, data reconciliation and data sharing are not far behind, and the report names things like IP rights management and facilitating track-and-trace as other important use cases.

How is blockchain being used today and what's the latest blockchain news?

2021 has seen a number of high profile uses of blockchain emerge. In June, El Salvador became the first country in the world to make bitcoin legal tender. The Bitcoin Law, which was passed by the nation's Legislative Assembly, means that bitcoin can now be used in El Salvador in addition to the US dollar, which has been its only officially recognised currency since 2001.

El Salvador may have been the first country to officially adopt blockchain as currency, but it’s unlikely that it’ll be the last. China, for instance, has developed its own digital currency, eCNY, which uses blockchain technology. This is overseen by the newly created Central Bank Digital Currency, and would be used for everyday transactions, such as paying for a cab ride or buying groceries using a digital wallet. Although eCNY has yet to be launched officially, China has conducted trials that involved giving out eCNY to citizens in Beijing, Shenzhen, Suzhou, Xiongan and Chengdu.

Blockchain currencies have also be popularised – and may be getting closer to acceptance and use by the general public – for another reason: Facebook. The tech giant had originally intended to launch its own blockchain-based payment system, Diem (formerly known as Libra) last year. However, a number of major backers pulled out, and the company also faced regulatory hurdles. It’s unclear exactly when Facebook and WhatsApp users will be able to use Diem (and whether they’ll want to) but reports are of trials happening this year continue. 

The use of blockchain – for digital currencies and new emerging applications – is a rapidly developing story, and one we’d recommend anyone, tech-savvy or not, to follow. Yes, there is negative news coverage of blockchain hacks and heists, but at the same time there are stories of its hot investment potential and how its being used for good – such as improving traceability in plastic waste and improving recycling efforts.

How is blockchain used in software development?

Blockchain, with its benefits of security, transparency and shared data ownership also mean that the framework is well suited to software and app development. A number of companies are already offering blockchain-as-a-service solutions, such as Oracle, Amazon and IBM. These aim to offer a straightforward way for businesses to introduce the framework into their apps and services.  

At AppDrawn, we’re also able to incorporate blockchain frameworks into the web and mobile apps and business software that we create alongside clients. You may wish to develop a blockchain-based app that allows you to ensure secure, traceable payments between app users and your own business, for instance.  It also allows you to operate secure traceable contracts under a concept called 'smart contracts'.

We take a bespoke approach to all of our software development projects, working for and with our clients to address and solve their specific challenges and meet the needs of their users. To find out more about blockchain, and how we can help create your ideal app – get in touch, we’d love to hear from you.

Published by AppDrawn
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