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Blockchain Design – Explore The Blockchain Principles

blockchain design

Are you interested in the world of blockchain? As a designer, you play a critical role in shaping the way blockchain technology functions and is perceived by users.

Blockchain design is a complex field that requires a deep understanding of both technical and user experience (UX) principles. To create successful blockchain solutions, you need to consider various factors, such as scalability, security, and usability.

Effective design can help maximize the potential benefits of blockchain technology, including decentralization, transparency, and immutability. Whether you’re a seasoned blockchain designer or just getting started, this article will provide valuable insights into the world of blockchain design.

What is Blockchain?

To effectively design blockchain technology, it is crucial to have a comprehensive understanding of its core principles. Blockchain serves as the underlying technology that enables the existence of cryptocurrencies such as Bitcoin and Ethereum.

It functions as a distributed ledger, recording transactions chronologically and publicly. Each transaction is securely stored on an immutable data block, resistant to tampering, through cryptographic verification by network nodes.

Based on a decentralized and distributed database, blockchain technology stores transactions in a chain of blocks. This approach ensures transparency, immutability, and security by utilizing cryptographic algorithms.

Every transaction in the blockchain is recorded in blocks, and each block is linked to the previous one through a cryptographic hash. This interconnection creates an unchangeable record of all transactions, much like the way humans would write and link sentences together to form a coherent paragraph.

In addition to recording transactions, blockchain technology also facilitates the implementation of smart contracts. Smart contracts are self-executing programs stored on the blockchain that automatically execute and enforce the terms of an agreement without the need for intermediaries.

They further enhance the functionality and potential of blockchain-based applications. Decentralized applications (dApps) make use of these smart contracts to operate independently on the blockchain.

In contrast, centralized applications rely on servers controlled by a single entity. When developing blockchain-based applications for various purposes, it is crucial to understand these differences and consider the unique capabilities and limitations of both decentralized and centralized approaches.

Decentralized Apps Vs. Centralized Apps

Decentralized Apps Vs. Centralized Apps

Decentralized apps (dApps) and centralized apps differ in several aspects, including control over data and speed.

Control Over Data

Centralized apps allow the single entity that owns the application to determine whether data should be public or private. Users have limited control over the data collected by centralized apps.

On the other hand, decentralized apps provide more control and transparency over data. Multiple stakeholders participate in the network through their nodes, and the data is accessible to all stakeholders.

Users can choose to make their information public, and the data within dApps is maintained by a consensus of stakeholders. This consensus ensures that actions and data are trustworthy.

Speed

Centralized apps are generally faster when it comes to transactions. Since these apps only need to communicate with one system, completing a transaction is quicker. Additionally, centralized apps require fewer resources, making them more cost-effective.

Types Of Decentralized Applications

Blockchain applications primarily follow a decentralized approach, but there are three possible options:

  • On-chain applications: These applications can be decentralized or not, depending on their design and implementation. They operate directly on the blockchain network, utilizing its consensus mechanisms and data storage capabilities.
  • Off-chain applications: These applications are essentially centralized, meaning they rely on external systems or databases for their operations. While they may interact with the blockchain for certain functionalities, the majority of their processes occur outside the blockchain network.
  • Fully decentralized applications: These applications are built exclusively on blockchain protocols or distributed application protocols. They operate entirely in a decentralized manner, utilizing the blockchain network for consensus, data storage, and execution of smart contracts or other functionalities.

Decentralized applications (dApps) offer solutions to the limitations of centralized apps. This summary explores different types of dApps, including Swap, bridges, decentralized exchanges, analytics platforms, browser extensions, explorers, and the concept of the metaverse.

Swap

Swap is an on-chain dApp that simplifies token exchange by eliminating intermediaries and enabling peer-to-peer transactions. It provides users with control over their assets, reduces transaction fees, and enhances security compared to traditional centralized exchanges.

FEATURESTRADITIONAL CENTRALIZED EXCHANGESDECENTRALIZED APPLICATIONS (SWAP)
IntermediariesRequired (Custodians)None
Security ControlControlled by CustodiansControlled by User
Transaction FeesHigh due to Intermediary CostsLow or Zero
Speed of TransactionsFast but Limited ScalabilitySlower but Highly Scalable

Bridges

Bridges facilitate interoperability between separate blockchain networks, allowing for seamless asset and data transfers while maintaining security and decentralization. Different bridge architectures, such as centralized, semi-centralized, and fully decentralized, offer varying degrees of advantages and disadvantages.

Some of the widely used blockchain bridges are xPollinate, Matic Bridge, and Binance Bridge.

Decentralized exchanges

These exchanges operate without intermediaries, enabling direct peer-to-peer transactions and giving users greater control over their assets. They leverage blockchain technology to provide secure and transparent trading, reducing the risk of hacks, increasing privacy, and lowering fees.

They promote financial inclusivity and continually improve scalability. RSK (Rootstock), Wanchain, RenVM, and Chainlink are among the decentralized exchanges that enjoy widespread usage.

Analytics Platforms

These platforms provide insights into network data, helping investors make informed decisions on decentralized exchanges. Efficiently extracting and displaying network data is crucial for designing such platforms, which often offer additional features like alerts, price tracking, and portfolio management tools. Analytics platforms are DappRadar, State of the DApps, Dune Analytics, and TokenAnalyst.

Browser Extensions

Browser extensions provide users with convenient access to blockchain products such as wallets and decentralized exchanges. They integrate with existing web technologies, although they may have security risks and limited features compared to desktop or mobile apps.

PROSCONSEXAMPLES
ConvenienceSecurity risksMetaMask
AccessibilityLimited features compared to desktop or mobile appsMyEtherWallet
User-friendly interfaceDependence on browser updates/compatibility issuesLedger Live

Explorers

Explorers offer interfaces to view blockchain networks and their activities. They help users track transactions and have seen a shift towards mobile platforms. A reliable and user-friendly explorer is essential for working with blockchain technology. Some of explorers are Polkascan, Tronscan, BscScan, and Etherscan.

Metaverse

The metaverse concept involves immersive virtual worlds with 3D assets. Blockchain design can support large-scale virtual environments by creating dApp architectures. Blockchain products are already being developed to handle the complexities of metaverses. Examples are The Sandbox and Decentraland.

These different types of decentralized applications provide users with secure, transparent, and efficient alternatives to centralized apps, fostering a decentralized and inclusive digital ecosystem.

Categorization Of Decentralized Applications

There are four main categories of decentralized applications (dApps) based on their functions. 

Record Keeping Dapps

Record keeping dApps focus on secure and immutable storage of data, offering decentralized and tamper-proof solutions for various industries such as healthcare and supply chain management. Examples of record-keeping dApps include MedRec, Provenance, and Bitland.

INDUSTRYEXAMPLE RECORD KEEPING DAPPS
HealthcareMedRec
Supply Chain ManagementProvenance
Land RecordsBitland

Asset Digitization Dapps

Asset digitization dApps enable businesses to manage their assets securely and efficiently by recording ownership and transfers transparently without intermediaries. These dApps also facilitate fractional ownership and provide benefits beyond traditional record-keeping methods.

Decentralized Workflow Dapps

Decentralized workflow dApps bring multiple stakeholders together in a transparent and trustless manner, improving coordination and accountability in business workflows. They utilize blockchain technology to enhance data trust, scalability & security, transparency, and efficiency. However, they face challenges such as scalability and high development costs.

ADVANTAGESDISADVANTAGES
TransparencyScalability
Data SecurityUser Adoption
AccountabilityHigh Development Costs
EfficiencyRegulatory Challenges

Consumer-Focused Dapps

Consumer-focused dApps cater to a broad audience and provide access to financial services through applications such as peer-to-peer lending platforms and voting apps. These dApps leverage blockchain technology to enable direct lending, automatic loan processes, transparent voting, and fraud prevention.

Overall, the categorization of dApps based on their functions highlights the diverse applications and benefits of blockchain technology in various industries.

Dapp Architecture Designing With A Sample Dapp – Design Blockchain

This section focuses on the design of a dApp architecture for an aircraft maintenance record-keeping application. The application aims to provide users with information about carbon emissions and the maintenance status of flights to help them make informed decisions.

Data Gathering

The first step is to collect data, starting with aircraft manufacturer data. This data is obtained via smart contracts, allowing manufacturers to send relevant information about each aircraft. Procurement data is also stored on the blockchain, enabling the airline company to create electronic flight logs and other necessary information.

Additionally, maintenance data can be generated by MRO service providers using the flight logs, manufacturing, and procurement data stored on the blockchain.

Data Processing

After data is captured and structured on the blockchain, the next step is to process it. The dApp architecture requires interfaces that allow auditors, customers, and resale agencies to interact with the application and trust the data.

Designing dApp interfaces is a complex process that considers various factors and attributes. In the case of the aircraft maintenance record-keeping application, the design of the interfaces needs to ensure usability, reliability, and trustworthiness. This involves bringing together different stakeholders and integrating the data into the interface.

The following table showcases some essential design considerations when building a dApp interface:

DESIGN CONSIDERATIONDESCRIPTIONEXAMPLE
User Experience (UX)Refers to how users interact with the dApp interface. This includes ease of navigation, visual appeal, responsiveness etc.Providing clear instructions for users on how to perform specific tasks within the app (e.g., uploading maintenance records).
SecurityA secure dApp interface protects sensitive information from unauthorized access or tampering by implementing encryption protocols and other security features.Implementing multi-factor authentication measures such as biometric authentication or two-factor authentication (2FA)
ScalabilityA scalable dApp interface can handle an increasing number of transactions without slowing down or crashing.Using off-chain solutions like side chains or state channels can help increase transaction throughput while reducing network congestion.
InteroperabilityAn interoperable dApp interface allows different blockchains to communicate with each other seamlessly.Incorporating industry standards such as Hyperledger Fabric into the design of the application helps facilitate communication between different parties involved in aircraft maintenance record keeping.

Bringing Up A Dapp Architecture Together

Choosing The Right Blockchain Platform

The first step is to select a suitable blockchain platform based on the specific use case of dApp. Different options include permissioned blockchains (limited access) and public blockchains (open access).

Capturing Data On The Blockchain

The selected blockchain platform is used to capture and store data securely. For a permissioned dApp, only authorized stakeholders can access and gather data, while a public blockchain allows transparent access for all users.

Utilizing Public Blockchains

Public blockchain platforms like XDC or Ethereum can be used to store public information. These platforms provide transparency and enable end-users to access and verify the data stored on the blockchain.

Establishing Bridges Between Blockchains

To facilitate seamless data transfer, bridges can be created between permissioned and public blockchains. These bridges ensure a secure exchange of information between different blockchain platforms.

Combining The Benefits Of Permissioned And Public Blockchains

By integrating these blockchain platforms effectively, developers and architecture teams can create a robust dApp architecture. This approach ensures data integrity, transparency, and accessibility, setting a solid foundation for the dApp’s success in the evolving digital landscape.

Factors that matter for dApp architecture designing

1. Determining The Blockchain Protocol

When selecting a blockchain protocol for your application, several factors should be taken into consideration:

  • Type: Decide whether you require a private network or want to leverage a public network for your data.
  • Speed: Determine if you need real-time transaction recording or if scheduled recording at specific intervals is sufficient.
  • Bridging Capacity: Consider whether you want your network to communicate with other protocols and if a hybrid environment is desired.
  • Ecosystem Tools: Evaluate the type of ecosystem tools you require for your application.
  • Energy Efficiency: Assess the energy efficiency of the blockchain network.
  • Cost: Consider the overall cost, including storage, execution, and development expenses.

Once the blockchain protocol(s) for your application has been determined, the next step is to address various factors associated with data transfer between on-chain and off-chain environments.

2. User Identity Considerations

When it comes to a user identity in blockchain applications, key decisions need to be made:

  • Centralized or Decentralized Identity: Determine whether to store user identity centrally or in a decentralized manner. Specify where and what information will be saved.
  • Separation of Identity and Data: Unlike Web 2 applications, blockchain architecture separates identity from data. In on-chain applications, user identity is often not linked to the data itself, making blockchain ideal for scenarios where data privacy is essential.

For example, public transparency may be required for maintenance records in an aircraft maintenance application, but user identity for flight searches may not be relevant until a ticket is purchased.

3. Authorization And Roles

In blockchain applications, it is crucial to establish proper authorization and role management:

  • Authorization and Role Storage: Determine where to store authorization and role-related information and ensure effective management.
  • User Data Control: Users have control over their data in blockchain applications, necessitating careful consideration of data access when employees leave an organization to prevent breaches or data theft.

Certain blockchain platforms, such as Hyperledger, provide built-in authorization and role management capabilities.

4. Leveraging Notifications

Notifications play a vital role in keeping users informed about on-chain and off-chain actions:

  • Off-Chain Alerts: Notifications are primarily off-chain and provide updates on activities happening both on-chain and off-chain.

By implementing a robust notification system, blockchain applications can enhance the user experience and ensure users are informed about important events and actions.

5. Designing Business Logic Layers

In the context of our flight maintenance record-keeping application, there are multiple layers of business logic to consider. These include data acquisition from various sources, such as auditors and maintenance agencies.

The challenge lies in deciding whether to incorporate the business logic within the interfaces or implement it through smart contracts. Transparency is crucial for showcasing business logic data to the public.

Depending on the nature of the data, certain information like airplane maintenance records or audited records can be stored on-chain using smart contracts. On the other hand, specific business logic, such as flight schedules, can remain off-chain.

It’s essential for developers to carefully evaluate each aspect of the application’s business logic and determine whether it should be stored on-chain or off-chain.

6. Storage Considerations

Storage is a complex aspect of decentralized applications. Depending on the requirements, a decentralized application may need to store metadata, large files, such as logs, images, videos, or even people’s identities.

In a decentralized app, file storage often occurs in a hybrid manner. There are two main options: storing data in the cloud, such as Amazon S3 with its Content Delivery Networks (CDNs), or storing data directly on the blockchain.

The latter involves encrypting the data, splitting it into pieces, and distributing these pieces among different nodes on the blockchain network. When data retrieval is needed, the system triggers a request to fetch the file from various nodes, compiles and decrypts the data, and delivers it securely.

While pure decentralized blockchain storage solutions exist, they tend to be more expensive compared to utilizing cloud storage services like AWS S3 CDNs. Therefore, a hybrid storage solution is often preferred to strike a balance between cost and security.

Factors that matter for dApp architecture designing

In this approach, files are encrypted and uploaded to multiple cloud storage providers instead of the blockchain platform itself. Only the file hashes are stored on the blockchain, ensuring file integrity.

To retrieve files, the system verifies the file by uploading it, creating the same encryption, generating a hash, and compares it with the hash stored on the blockchain.

7. Operations And Integration With Smart Contracts

Smart contracts play a vital role in blockchain applications, offering both read and write operations. It is important to consider the associated costs and complexities when utilizing smart contracts.

Smart contracts can interact with off-chain data sources or APIs through oracles. By utilizing smart requesting contracts, off-chain data can be imported onto the blockchain by converting it into a format that the blockchain can interpret.

Similarly, smart contracts enable the delivery of on-chain data to off-chain databases, facilitating seamless integration between the two environments.

By effectively implementing business logic, storage solutions, and smart contracts, blockchain applications can achieve higher efficiency, security, and transparency while leveraging the benefits of decentralized technology.

Final Words

Congratulations! You’ve reached the end of this informative article on blockchain design. By now, you should have a better understanding of the importance of blockchain design and the key considerations that come with it.

As a blockchain designer, it’s important to stay up-to-date with emerging trends and best practices in order to create efficient and effective blockchain solutions. Remember, design is not just about creating a functional system, but also about designing a secure and user-friendly experience for all stakeholders involved.

So, keep these factors in mind as you embark on your design journey, and don’t be afraid to experiment with new ideas and technologies. With a solid foundation, you can help shape the future of this exciting and constantly-evolving industry.

Webisoft creates blockchain applications, wallets, exchanges and more.

Frequently Asked Questions

How Do Blockchain Solutions Differ From Traditional Database Solutions?

Blockchain solutions differ from traditional database solutions in their decentralized structure, immutability, and reliance on cryptographic proof. These features provide increased security, transparency, and trustworthiness compared to centralized databases.

What Are The Most Common Challenges Faced During The Implementation Of Blockchain-Based Projects?

During the implementation of blockchain-based projects, common challenges include scalability and security, interoperability with existing systems, regulatory compliance, and ensuring data privacy and security. These challenges require careful consideration and planning to overcome potential obstacles.

How Does The Governance Structure Of A Decentralized Application Impact Its Success?

The governance structure of a decentralized application plays a crucial role in determining its success. A transparent and efficient system that allows for community participation can ensure the integrity, security, and sustainability of the network.

What Are The Ethical Considerations Surrounding The Use Of Blockchain Technology?

Ethical considerations surrounding blockchain technology include issues such as privacy, security, and accountability. Decentralization can create challenges in regulating illicit activities and ensuring fair access to resources. Transparency must also be balanced with the need for confidentiality.

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notomoro

Notomoro is an expert in Web and Mobile Software Development with years of experience. His proficiency lies in shaping cutting-edge digital solutions, combining technical prowess with a wealth of industry knowledge. With a track record of excellence, Notomoro brings a seasoned perspective to the ever-evolving landscape of software development.

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