Breaking Down the Development Cost for a Blockchain Solution in 2023

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  • By Surya Sharma
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  • clock 11 minutes MIN READ
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  • calendar Updated: December 8, 2022

Blockchain has been accelerating at a fast pace across the entire globe. With the ever-expanding technology, mobile applications have become your go-to solution for almost everything. When blockchain integrates with an application, the results are often exceptional.

A blockchain app can be created in a variety of ways, each of which will have a different price, benefits, and drawbacks. People spend a considerable amount of time calculating how much it costs to develop a blockchain solution.

Well, the answer is that it depends not only on a single factor but on multiple ones. The app’s features, efforts, and objectives build up the cost of developing a mobile application.

After considering various variables, concrete instances, and complex data, we also assessed the expenses associated with blockchain deployment. But before we dig deep, let’s grab a brief overview of blockchain technology and how it helps!

Blockchain Technology: A Brief Overview

Major industrial players have taken notice of the tremendous growth in the usage of blockchain technology. This is clear from the growing number of blockchain-based activities and projects being carried out by significant companies across numerous industries.

Blockchain technology has a significant impact on the emerging digital economy. For instance, users of cryptocurrencies can easily send money internationally without the need for a bank or any other financial institution to act as an intermediary. This eliminates the need for extensive paperwork or any additional processing charges.

With blockchain’s distributed and digital qualities, it is extensively being implemented by businesses in different industries in order to securely collect, store, and transport data.

According to a Grand View Research analysis, the global blockchain technology market size was valued at USE 5.92 billion in 2021. This is expected to grow at a compound annual rate (CAGR) of 85.9% from 2022 to 2030.

The original purpose of blockchain technology was to operate as a public transaction ledger. The double-spending issue in the traditional banking sector was successfully resolved, along with the need for a reliable central authority, thanks to the development of blockchain technology.

Top-Notch Factors That Affect the Cost of a Blockchain Development Project

The price of the development relies on a number of variables, and some of them are listed below! Let’s dig deep and take a closer look at all of them!

1. The Industry of the Application

The industry that an application belongs to is, by far, the most significant element that influences its development cost.

The intricacy of the dApp, the number of stakeholders that would interact with the app at any given moment, and industry compliance standards are just a few of the many cost-affecting factors that vary from one sector to another.

Well, the following is a brief industry-specific cost distinction chart:

IndustryCost
Healthcare$55-$100K+
On-Demand$40-$80K
Social Media$45-$100K+
Public Sector $70-$100K+15t
Finance Sector$50-$100K+

2. The Complexity of the Project

A number of criteria need to be taken into account to define the complexity of a Blockchain mobile application. The first thing you need to think about is the purpose of the app.

You must have a solid grasp of the issues that consumers are encountering, the solutions out there, the necessity of investing in creating blockchain applications, and how your app can provide better services.

All of these will assist you in determining the blockchain application or solution in which you should make an investment. If you run an organization, considering the following possibilities can be beneficial to you:

The Platform Used

There are more than 25 platforms to pick from when creating a Blockchain application, so you don’t need to start from scratch. The most well-known ones include Quorum, BigChainDB, Hyperledger Fabric, and Ethereum. Therefore, it is advised that one should think about all of the platforms mentioned above, determine which may genuinely work well with their application goal, and then move forward.

Consensus Mechanism

Every blockchain system, including Bitcoin, utilizes a specific consensus algorithm that enables all users to decode transactions. Other arbitrary blockchain-based systems might use Proof of Stake, Delegated Stake Proof, Proof of Elapsed Time, Federated, etc.

And depending on your needs, you must determine which approach is best. Additionally, it is necessary to address other critical components, including user permission, the re-issuance process, asset issuance, key management and organization, atomic transfers, hand-shaking, signatures, and address formats.

Stack

With each platform, you need to be aware of a new set of blockchain programming languages and tools. Each stack has its advantages and disadvantages, so you must focus on the proper mix of stacks for effective production.

The APIs

Although there are many pre-built APIs available on the market for the development process, you might still need to build an API for a specific use case, such as performing data authentication and monitoring, creating key pairs and addresses, stockpiling and collecting data, handling intelligent contract interaction with the system, etc.

UX and UI

The next step is to construct a console for UI and Admin once all the backend-related details have been worked out. This section will specify the ideal front-end programming language, servers, external repositories, etc., for your app development process.

MVP or POC

Since blockchain technology is still in its early stages, it is preferable to use the MVP development strategy. It is suggested, in plain English, that rather than introducing the entire solution, a workable solution containing the essential components of the anticipated application be created and evaluated.

All of these were technical considerations, but another method aids in estimating how hard a blockchain request will be when other factors are taken into account.

In a nutshell: It’s critical to comprehend the intended use of an app. Discover the difficulties faced by users, the advantages of investing in blockchain development services, how it is created, and how an app might offer better services.

1. Low Complexity Apps

2. Basic Smart Contract Development App

3. Payment applications developed around current cryptocurrencies

4. Medium Complexity Apps

5. Semi-decentralized apps

6. dApps created using blockchain technology, including those built on Ethereum, Hyperledger Fabric/Sawtooth, EOS, and others

7. High Complexity Apps

8. Developing a blockchain platform from scratch

9. Developing an entire decentralized network

In addition to the complexity of the blockchain application, factors including staff, assets, technology, design procedures, and operating costs usually affect how much a blockchain app costs. Let’s dig deep into each of these elements.

3. The Type of Application You Need

Every company requires a digital solution in order to boost efficiency and expand their business. You need an application that either enhances the value of your product or brings in a lot of money.

Businesses can benefit from traceability, accountability, and trust thanks to a blockchain architecture while also saving money on other intermediaries. Numerous industries, including education, fashion, healthcare, utilities, transportation, gaming, and more, have adopted blockchain technology and taken their business to the next level.

4. Third-Party Tools Cost

  • Amazon Web Services: Computing, Delivery, and Storage ($100 to $1000, depending on the number of users)
  • Notification Services like Twilio, Kumulos, and Amazon SNS:
  • Authorizing notifications within the app ($10 to $50)
  • Bug Tracking Tools such as Instabug and Bugsee: Collecting & reporting live bugs ($10 to $100 per month)
  • Analytics with Flurry or Mixpanel: Analytics of data, funnel, insights, and reporting ($0 to $150)

There is currently a shortage of competent & experienced blockchain developers on the market because blockchain technology is still in its infancy. A blockchain developer typically earns $150,000 annually. The cost of hiring a full-service corporation as opposed to a blockchain developer, however, might be significantly more for any business.

5. Cost of People Involved

The cost of engaging a team in order to develop a specialized blockchain app is a sizable portion of the projected costs.

The salaries of various software developers represent the primary costs. However, there are other significant factors that must be taken into account in addition to revenue, such as insurance, holidays, pay for promotions, payroll, and vacation days.

Don’t forget to account for hiring expenses, which may include managing time and advertising to find the right people for the blockchain project.

Because blockchain is still relatively new to many individuals, finding expertise might be challenging. Organizations must continuously invest extensively in funding training resources.

Training costs may include paying for online courses or booking travel to important blockchain-related conferences.

Cost of Hiring Blockchain Developers

To start, you’ll need to hire Blockchain developers or software development firms to help you design your application if your enterprises aren’t in the IT sector.

To begin with, there are two distinct categories of blockchain developers:

A typical commercial blockchain solution’s architects and security designers are known as core blockchain developers.

Blockchain software developers build decentralized applications (dapps) and smart contracts using the architecture and foundation established by the primary blockchain developer.

As we’ve said in previous blog posts, blockchain developers are among the most in-demand IT specialists in the US market alone. According to indeed.com, their average yearly salaries vary from about $79,583 for engineers to $107,851 for software engineers.

Additionally, according to Toptal.com, talented independent blockchain coders often charge $55 per hour, translating to an annual salary of $100,100.

Since many businesses compete for the same talent in the local market, hiring professional blockchain developers is expensive and difficult.

Because of this, many businesses in the US and other Western markets now outsource their blockchain projects to foreign software firms in an effort to cut costs. Vietnam, India, and other nations in Eastern Europe, such as Ukraine and Poland, are among the most sought-after locations for outsourcing blockchain development.

6. Cost of Different Processes

The actual price of deploying blockchain primarily depends on a variety of initiatives or phases of the development cycle:

  • Design: Multiple design components, including wireframes, UI/UX structures, and low-fidelity prototypes, determine the app navigation.
  • Development: The entire code setup and testing its effectiveness
  • Deployment: Deploying a blockchain solution requires efficient delivery and correct usage of Cloud platforms.
  • Maintenance: Keeping up with the new updates is essential to ensure that the app runs successfully across all platforms.
  • Upgrade: Changes in Smart Contracts, New features,
  • Third-Party Tools: Notification System, Collaboration, Hosting, Storage.

In addition to the costs incurred by blockchain designers and developers, many tools and technologies also incur costs during the blockchain development process.

7. Project Management

9. Continuous Integration

Each developer should write and validate code in a shared code repository to ensure that it integrates neatly with everyone else’s code. A quality software pipeline needs to be managed carefully.

The most effective method to confirm this is using an automated procedure. Because Bitbucket and GitHub are used for source code management, the cost of the blockchain app has gone up.

10. Maintenance

New platforms are entering the market every day, and blockchain technology is still in its infancy and is relatively new. Because of this, it should be transferred to various platforms based purely on their ability to scale, be flexible, and maintain privacy.

Additionally, Apple, Google, and a number of blockchain platforms also issue new OS versions annually. The cost of maintaining a blockchain app often ranges between 30 and 35 percent of the total project cost, depending on the complexity of the app.

This leads us to conclude that when compared to alternative options like hiring a freelancer or developing the app internally, working with an agency is the most cost-effective approach to producing your blockchain app.

Wrapping Up

Depending on the project’s complexity, different blockchain applications will cost different amounts to develop. It is important to remember that blockchain development is expensive; therefore, companies should be ready to commit a considerable sum of money to the venture.

In light of this, using open-source technologies that are already in existence, like Ethereum and Hyperledger Fabric, can help you save money. You can also work with a reputable Blockchain development firm.

Building a blockchain application is generally expensive, but for some businesses, the advantages the technology offers may outweigh the expenses.

Blockchain technology is still developing, moving beyond its original goal of enabling digital transactions in the form of cryptocurrencies to become a highly scalable distributed platform that can address a variety of problems unique to particular industries.

There are numerous use cases for blockchain applications, and every solution will need a unique, specialized technological approach and method of implementation.

Despite the promising figures, it is essential to remember that developing a blockchain takes money. Simple blockchain application development starts at $15,000 and can cost up to $1,30,000 for a complicated enterprise.

Before moving on to a full-scale solution, which can cost up to $100,000, you might want to start by developing an MVP for your blockchain solution, which can be done for as little as $5000.

The entire cost of creating a blockchain, however, may vary according to the requirements of each specific project, such as the number and complexity of capabilities that must be incorporated into the finished product.

If you are looking for a dedicated blockchain development company to get you started with an effective blockchain solution, we at RV Technologies have covered you. We bring vast development experience to the table while our technical experts guide us throughout the process.

Get in touch with our professionals today!

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