Building with blockchain: the first steps

By Lisa Froelings

25 June 2018

Blockchain isn’t a disruptive technology, but a foundational one. Innovative technologies will be built upon it, just as bitcoin, the first cryptocurrency was. With blockchain we could build better supply chains, create better health care systems, and make more efficient payment systems.

Blockchain is changing how some businesses do their transactions. Before blockchain, we relied mainly on double-entry bookkeeping to track transfers of money, goods, and services.

In double-entry bookkeeping, we operate on the idea that for every transaction there is an equal and opposite effect on the accounts involved, and that we should see this recorded on at least two seperate accounts. This is an obvious idea today, that assets are composed of both liabilities and of equity, and that for every gain, there is an equal loss.

Blockchain improves upon the double-entry bookkeeping model. In modern accounting, a trusted third party is needed to authenticate valid transactions. The clever engineering of blockchain eliminates this need. The ledger is global, public, and peer-to-peer. Individuals can transact without another institution organizing and validating data -- the platform performs all of these functions for them.

Blockchain is a distributed database that records transactions without any central authority. In order to verify each transaction, each network node stores a copy of the existing blockchain. A hash table that maps a new block to previous transactions is coded within the block itself, making transactions, and the order of transactions, unchangeable.

Blockchain transactions can be validated through two different types of mathematical proofs. A proof of work and a proof of stake.

Bitcoin uses proof of work, in which users race to solve complex cryptographic puzzles. The first user that successfully works through this proof, which validates a series of transactions on the block. is awarded with bitcoin, and a new block is placed on the unending, immutable chain.

For Bitcoin, all transactions are public, but this doesn’t have to be the case for all blockchain technologies.

Bitcoin’s code is completely open-source, which means, any person, institution, or organization can use, edit, customize, and distribute their own versions of blockchain. Blockchain development requires then minimal financial investment, Blockchain development guide, and just a bit of your time.

Starting blockchain development: Must-reads

Because blockchain has an open source nature, beginning your own developer journey with the platform is relatively easy. While you may be tempted to jump right in, it’s best to get in your suggested reading first.

To learn the about blockchain in a more broad way, you may want to begin with Blockchain Revolution by Don and Alex Tapscott. In simple terms, the Tapscotts explain how blockchain works and the incredible implications of the new technology. They also mention some applications being developed outside of cryptocurrency, which may help you with your own ideas for your blockchain project.

More technical books, such as the simply-titled Blockchain: Blueprint for a New Economy by Melanie Swan will allow you to better understand smart contracts, decentralized autonomous organizations, and the economic implications of blockchain.

Lastly, you’ll want to get an in-depth blockchain manual to prepare your coding and development journey. The O’Reilly programming books are often a wonderful resource for developers looking to learn a new skill. Mastering Bitcoin: Unlocking Digital Cryptocurrencies by Andreas Antonopoulos. This gets into the nuts and bolts of the technology behind Bitcoin, from the protocol, the payment system, to the source code that powers it all.

Blockchain development: learning guides

After you’ve done some research, some reading, and have dabbled with some bits of code, you’ll be ready to enroll in Blockchain courses on Udemy and Coursera. There are many blockchain bootcamps and paid courses you can attend, but there are also some wonderful free resources at your disposal.

You can build you own blockchain application on the Hyperledger Fabric using IBM’s Hyperledger Composer, for example. On IBM’s developerWorks site, you’ll be able to find guides that detail how to build a blockchain network, how to execute blockchain smart contracts, and effectively record transactions along the chain.

Learning to build applications in blockchain is one that will require some existing programming knowledge and a great deal of patience, but it’s well worth your time to jump into such a promising technology.

Lisa Froelings is a business and productivity consultant with over 4 years of experience in human resources working for a major retailer in the country before she decided to build her own business. Her interests include technology, mindfulness as well as time management.

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