Blockchain Apps are distributed software programs that deliver valuable services. Unlike traditional centralized software, apps cannot be forcibly stopped or shut down because they do not rely on a single server or entity to function. Blockchain technology can transform many industries, particularly the financial services industry for example. This revolution in technology has brought about an entirely new kind of economy. Here arises the question that how much it will cost to develop Apps on these new platforms. Before developing Apps on top of blockchain technologies, one needs to think about what that means in terms of the infrastructure and costs associated with development as well as costs associated with scaling.
Factors Affecting Cost of Building Blockchain App
Below are some of the factors that affect the cost of building a blockchain app:
1. App development agency size: Small size companies charge relatively less than medium size and large size companies. This is because they are in dire need to create a work portfolio. On the other hand, large companies have a high-cost estimate due to many reasons like the aim to maintain a set of standard portfolios.
2. Industry-wise App cost: The industry to which the dApp will belong will also impact the cost of the dApp development. There are a number of cost-driving factors like the complexity of dApp, the number of stakeholders who would be interacting with the dApp, industry compliances, etc.
3. Complexity of Blockchain App: There are a number of factors that contribute to the complexity of the Blockchain app. Some of them are the Consensus mechanism, a blockchain platform, programming languages and tools, APIs for the app development, UI/ UX, etc. The most important thing to consider here is to determine and understand the purpose of the blockchain app. It is very important to have a clear idea of what is being developed, what are the existing solutions, how apps can provide better services, and what is the need of investing in blockchain app development. All these factors and questions need to be asked to help determine the cost of the blockchain app development.
4. Storage cost: There are a zillion different storage options and they can be very unpredictable. Storage cost is the cost of how much space is needed on the hard drive to store the blockchain data. It can range from having 30 GB to 1 TB of space or even more. That might sound like a lot of space, but this space will also include the wallet and every transaction that happened on the blockchain. The main issue with the hard drive storage is that unless there are backups stored off-site there is a danger of losing everything after crashes happen. It is important to estimate the storage cost for the blockchain app as it will affect the app development cost and at the same time, the app should be able to support a reasonable number of users.
5. Number of transactions: This is probably the most important factor when it comes to blockchain size. The more transactions happen, the more data is needed to be stored on the blockchain. So if there are a lot of users using it every day, this will lead to a very fast and large blockchain size. Thus, an accurate estimate of the number of users and a possible number of transactions that will happen per day will help to estimate the cost of a blockchain app.
6. Type of blockchain used: It depends on what features are required in order to enable certain functionalities in the blockchain app. If a blockchain app is about a marketplace and Ethereum is being used for payments, then Ethereum might have a huge impact on the costs. The same goes for different GAS prices at different nodes.
7. Blockchain App Category: The blockchain app can be of two types:
- Cryptocurrency-based app: These apps are based on the cryptocurrencies like dApp, wallets, ICO with dApp solutions, etc. The cost of these apps is additional due to the involvement of the cryptocurrencies and thus creating an arrangement for the wallets.
- Non-cryptocurrency-based app: These apps are independent of the cryptocurrencies and are based on distributed ledger systems and are highly used in Inventory management systems thus they are less complex but they still incur costs due to the high use of required storage solutions.
8. Use of smart contract: The smart contracts enable dApps to connect to the blockchain system. The cost of smart contract development also adds to the cost of dAPP development.
9. Nature of Blockchain Network: Choosing between the public and the private blockchain network significantly impacts the cost of blockchain app development. Private blockchains need a central authority every time for making any transaction, thus adding to the blockchain app cost. Public blockchain on the other hand is permissionless where anyone can participate in the consensus process thus the cost is low as compared to the private blockchain network.
10. Level of decentralization: If the level of decentralization is low then the process will be simple and the app will be less expensive. Implementation of a higher degree of decentralization will be complex and more expensive.
Cost to Develop Apps across different Blockchain Platforms
There is a wide range of blockchain networks available to develop blockchain apps. The prices for developing dApps on these networks vary drastically. The cost of building the app across different blockchain networks like Ethereum, Hyperledger fabric, Ripple, and EOS, varies from $6,000 to $400,000.
- Some other factors that affect the cost of developing apps across different blockchains are Machine Learning, Microservices, Frontend Design, and Backend Development.
- These factors can quickly add up to the initial development costs including estimates of design and development complexity.
- In general, mobile and web applications are cheaper to develop. It is also important to note that it costs less to hire talent for frontend and backend in comparison with apps as they have fewer moving parts.
- Ethereum is one of the most popular blockchain-based technologies for developing dApps. It allows anyone with an idea or a need for a decentralized, open-source application that could benefit from the use of smart contracts to implement their idea using the same platform.
- This means that developers can choose from an existing database of smart contracts that are available or they can build their own and deploy them onto the Ethereum platform.
- The cost of developing dApps on Ethereum has to do with the cost of gas and optimizations.
Popular Blockchain Platforms for App Development
Below are some of the popular blockchain platforms that can be used for blockchain app development:
- IBM Blockchain Platform: It is an open-source, community-based Hyperledger Fabric platform for the Linux foundation with service level agreements (SLAs). It has an advanced set of productivity tools for developing, operating, and controlling blockchain solutions.
- Tron: It is a decentralized, open-source blockchain-based operating system with proof-of-stake principles, smart contract functionality, and a cryptocurrency native Tronix.
- Ethereum: It is a decentralized, open-source blockchain platform with smart contract functionality. Ether is the native cryptocurrency of this blockchain platform.
- Hyperledger Fabric: This helps to develop blockchain-based solutions using a modular architecture. This framework is for permissioned networks allowing known authorized identities to participate inside a system.
- Hyperledger Sawtooth: It is an open-source blockchain platform of Hyperledger that is crafted for developing, deploying, and executing distributed ledgers.
- Oracle Blockchain Platform: It is a complete distributed ledger cloud platform that deploys and runs smart contracts to query and update the ledger.
- Ripple: This platform targets connecting payment providers, banks, and digital asset exchanges via a blockchain network known as RippleNet. This platform also permits global payments using the cryptocurrency Ripple.
- Quorum: It is an open-source and free-to-use blockchain platform that uses vote-based algorithms to process various transactions per second.
- EOS: This platform is for the development of decentralized applications. This platform provides dApp’s hosting, smart contract power, and decentralized storage for enterprise solutions.
- Corda: It is a popular blockchain platform that allows organizations to transact straight with smart contracts and operates in permissioned mode, thus improving the privacy of the user data in the network.