The transition to a decentralized universe, often referred to as Web 3.0, has caused a significant increase in demand for blockchain technology. As a result, blockchain has become one of the fastest-growing technologies on the Internet today.
But what do the numbers say? According to Fortunly, an impressive 74% of technology enthusiasts have expressed their belief in the futuristic potential of blockchain technology. Moreover, a recent report by Grandviewresearch predicts that the global blockchain technology market share will reach a staggering USD 1,431.54 billion by 2030, with a remarkable compound annual growth rate (CAGR) of 85.9% from 2022 to 2030. Notably, Statista predicts that the global blockchain market will reach $163 billion by 2027.
Given the huge potential, it's no wonder that business owners are eager to launch their next blockchain project. However, determining the cost of developing blockchain projects is not an easy task. Valuation is critical for blockchain projects as return on investment (ROI) becomes more complicated in the blockchain application development field. It requires not only expertise and knowledge, but also detailed organization, including building a development team, implementing marketing strategies, creating a project plan, conducting market research, and ensuring proper auditing.
It is important to emphasise that the complexity of the tools used in a project often correlates with increased development costs. As with any other project, blockchain costs can vary depending on the functionality of the application to be developed, the level of effort required and the goals of the project.
In addition to discussing the cost of blockchain projects, this article will also cover the following topics:
- An overview of blockchain technology and its unique characteristics;
- Factors influencing the cost of blockchain app development;
- Different types of blockchain projects and their associated costs;
- How do develop blockchain projects at Peiko?
Without further ado, let's dive into our comprehensive study!
What is blockchain and what are its specifics?
To begin our discussion, let's delve into the concept of "blockchain" because it has become as one of the most significant technological advancements of the last 10 years. While the topic of blockchain is too actual, there is still a lack of clarity about what blockchain truly means and how it works. Despite its apparent complexity, the fundamental idea behind blockchain is quite clear, and it has enormous potential to revolutionize various industries from the very beginning.
In essence, a blockchain refers to a decentralized and public digital ledger, or a distributed database, that maintains a continuously expanding list of ordered records known as blocks. These blocks are connected through cryptographic techniques. Each block consists of a cryptographic hash of the previous block, a timestamp, and transaction data. Essentially, blockchain serves as a shared database across a network of participants, facilitating the availability of real-time information to all participants simultaneously, enabling the permanent, unchangeable, and transparent recording of data and transactions. This is a feature which allows for the exchange of anything possessing value, whether it be tangible assets like houses, cars, cash, or land, or intangible assets such as intellectual property, patents, copyrights, and branding.
Now, why is blockchain so important? The foundation of business relies on information and the faster and more accurate it can be obtained, the better. Blockchain is an ideal solution for the rapid delivery of information, as it provides instant access to shared data that only authorized members of the network can access. A blockchain network has the capability to track various elements such as orders, payments, accounts, production, and more. That is why a broad view of end-to-end transaction details can be obtained, instilling greater confidence.
In conclusion, blockchain technology offers transformative possibilities by combining decentralized consensus, cryptographic security, and transparent record-keeping. Its potential to revolutionize industries lies in its ability to provide real-time, tamper-proof data and facilitate secure transactions, thereby enhancing trust, efficiency, and collaboration across diverse sectors.
Factors affecting the blockchain app development cost
Gaining an understanding of the various factors that can impact the overall development budget requires you to first identify the type of blockchain app you require. Additionally, it's important to have a clear comprehension of the app's purpose, the problems faced by end-users, and how your blockchain solution can address those issues and bring about transformation. Taking all these factors into consideration, here are the key considerations when you building a specific blockchain app:
When examining the mobile app development industry and its cost structure, you'll find variations among three categories: large companies, medium-sized blockchain app development agencies, and small-cap agencies.
Smaller agencies typically charge less than medium and large companies as they aim to build their portfolio. On the other hand, large companies are selective with their projects, often due to managing a large team or maintaining a specific standard for their portfolio.
Considering these scenarios, businesses planning to enter the blockchain sector often prefer medium-sized blockchain app development companies like Peiko company
The cost differences between the three sizes of blockchain app development companies can be summarised as follows:
2. Industry-specific Blockchain App Development Cost
The industry to which your blockchain app belongs also significantly influences the development cost. Several factors impact the prices, including the complexity of the decentralized app (dApp), the number of stakeholders interacting with the app, and industry compliance requirements, among others.
The blockchain app development cost can vary based on the industry:
3. The Complexity of the Blockchain App
To determine the complexity of your specific blockchain application, consider the following:
Aim: Clearly define the purpose of your app, the problems faced by end-users, the need for blockchain application development, and how your app can offer enhanced and improved services. These considerations will help determine the type of blockchain app development services you should invest in. For enterprises, it's essential to address these questions before implementing blockchain technology.
Consensus Mechanism: Each blockchain system utilizes a specific consensus algorithm, such as Bitcoin's Proof of Work. Evaluate which mechanism is ideal based on your requirements. Additionally, consider other crucial elements such as user permissions, re-issuance mechanism, asset issuance, key management and structure, signatures, and address formats. It is advisable to consult with a blockchain app development company if you are new to this field.
Platform: There are many platforms available for building a blockchain app without starting from scratch, including Ethereum, Hyperledger Fabric, BigChainDB, and Quorum. Consider which platforms fit with your app's goals before proceeding.
Stack: Each platform has its own set of blockchain programming languages and tools. Familiarize yourself with the different stacks and their respective benefits and limitations to ensure effective development.
An application programming interface (APIs)
While there are pre-built APIs available in the market for development purposes, there may be instances where you need to create a specific API for tasks like data authentication and auditing, generating key pairs and addresses, storing and retrieving data, and more.
Once the backend decisions are made, the next step is to create a user interface (UI) and an admin console. This involves choosing the appropriate front-end programming language, servers, and external databases for your app development process.
Developing a complete blockchain app from scratch can significantly increase your development budget at the initial stage. It is advisable to adopt a Minimum Viable Product (MVP) development approach instead. This means creating a working solution with the core features of the planned application and testing it before launching the complete solution.
Now, when considering all these factors, the complexity of a blockchain app is determined. The cost structure based on the complexity of the decentralized app (dApp) would look like this:
4. Blockchain App Services
These are secure digital wallets used for storing, sending, and receiving cryptocurrencies like Bitcoins.
Crypto exchanges allow users to convert and trade Bitcoins and other cryptocurrencies in a centralized, decentralized, or hybrid environment.
An initial coin offering (ICO)
ICO refers to the process of generating and selling cryptocurrencies. For ICO development, the cost of creating an ICO website, tokens, and a crowd sale smart contract typically ranges from $10,000 to $15,000, depending on the website features, admin panels, and investor features.
Decentralized applications (dApps) and Distributed Ledger Technology (DLT) based solutions
dApps are a kind of application that performs without the control of a single entity. They work in a Peer-to-Peer (P2P) network, not on a single computer.
The expense of creating a decentralized blockchain app and an app based on DLT (distributed ledger technology) directly depends on the amount of effort invested, which includes:
Nature of the Blockchain Network: Do you choose a public or private blockchain development approach? This decision significantly affects the cost of blockchain app development. For instance, a private blockchain network is a permission-based system where all permissions are centralized in an organization. This means you need to get approval from the central authority for every transaction. On the other hand, a public blockchain network operates on a permissionless basis, allowing anyone to participate in the consensus process without compromising security.
Level of Decentralization: The degree of decentralization chosen for effective content placement also impacts the app's cost.
If the level of decentralization is low, the process will be relatively easier and cheaper. However, implementing a higher degree of decentralization for pure decentralization will be more complicated and costly.
Block Explorer: A block explorer is an online browser for exploring blockchain, where you can view the contents of individual blocks and transactions, transaction histories, and address balances.
Smart Contract Development: Smart contracts allow dApps to interact with blockchain systems. Therefore, the cost of developing smart contracts also contributes to the overall dApp development cost.
The end-to-end development of a dApp, including the mentioned features, can range from a minimum of $75,000 to $150 or even higher, depending on the complexity of the project.
An NFT marketplace is a blockchain-based platform that enables users to buy and sell non-fungible tokens (NFTs) online. NFTs are stored on a public blockchain and contain information such as the creator, creation date, buyer, purchase date, and the purchase price of an asset, as well as real-time ownership.
Deciding the exact cost of blockchain app development is a difficult task that requires analyzing and deciding the specific type of blockchain app you want for your business. Let us provide you with an estimated cost and time frame for developing various types of blockchain applications:
By carefully considering these factors, you can make informed decisions when it comes to budgeting and developing your blockchain app.
Types of Blockchain Projects and Their Cost
Below we offer you to consider the cost of the following types of blockchain projects:
How much does it cost to start a cryptocurrency
Over 2000 different cryptocurrencies are available today. Gaining trust for a new form of money requires significant effort to convince that the new crypto coin is a worthwhile investment.
There are several key aspects to consider: assembling a team of experts, developing and marketing the crypto coin and ensuring legal compliance.
The team of experts of course is crucial. To successfully launch a coin in the market, you'll need advisors specializing in marketing, software development, cybersecurity, PR management, and more. These professionals will help attract investors and lend credibility to the project.
Understanding how to promote the new cryptocurrency and generate profits is essential. It's necessary to address the needs of your target audience, communicate the main benefits of your coin, and highlight your competitive edge.
Another critical aspect is ensuring the legal compliance of your cryptocurrency. Therefore, the guidance of a legal advisor is essential for any blockchain project.
So, how much does it cost to create a cryptocurrency? Once the marketing strategy is determined, you can proceed with developing the blockchain network. It typically takes about a month for developers to build the network from scratch. The cost can range from $15,000 to $50,000, depending on various technical factors.
Ultimately, the cost to create a cryptocurrency is around $150,000 to $200,000, excluding marketing expenses.
Creating of cryptocurrency wallet
This means we need to work on both the client side for mobile devices and the web, as well as the server side with the REST API (for example, CoinAPI). Alternatively, you can opt to develop a standalone application.
To create a custom cryptocurrency wallet, you will require a dedicated team comprising several experienced developers, a business analyst, a project manager, and a QA engineer.
The estimated cost for developing a Minimum Viable Product (MVP) of a cryptocurrency wallet that supports the three major cryptocurrencies (Bitcoin, Litecoin, Ethereum) is approximately $40,000.
How to create a Blockchain commercial project
In recent years, blockchain technology has evolved from a complex tool to a scalable one, decentralized platform suitable for industry-specific apps. Nowadays, both small startups and large corporations utilize these blockchain-based applications.
The versatility of blockchain allows it to be applied across various industries, including cybersecurity, healthcare, manufacturing, legal and government, charity, retail, real estate, tourism, media, and many others. This wide range of applications demonstrates that blockchain is not limited to financial transactions; it can effectively support almost every sector.
However, determining the exact development possibilities and associated costs of implementing blockchain is not straightforward. The price of blockchain implementation varies depending on the specific project requirements since blockchain is a technology that relies on its features.
It is important to note that the cost of developing a blockchain application can start from around $5,000 and can range up to $450,000, depending on the complexity and scope of the project.
How Does Peiko Develop Blockchain Projects:
At Peiko we follow the following steps on how to make a blockchain project: market analysis, Interface development, software development, testing, and deployment.
Now, we would like to present the cases that the Peiko company has successfully worked on.
One of the vivid examples of the creation of a crypto wallet by a company is the Bitcoin Additional case.
Bitcoin Additional is a user-friendly and feature-rich mobile cryptocurrency wallet. It offers seamless transfers to contacts, supports multiple coins, and even provides an offline payment feature.
However, if we are talking about the project's initial stages, the primary concern revolved around the application's security. To address this, we proposed incorporating industry-leading practices to ensure a high level of bank-grade security. As a result, we made the decision to implement robust processes in the application's lifecycle that enable efficient detection and elimination of vulnerabilities. Additionally, we established regular monitoring of the source code's security to maintain a secure environment.
Please refer to the complete case study
for further details.
Another illustrative instance of showcasing the building a blockchain project at Peiko is the Quan2um case.
The Peiko team encountered the task of developing a trading platform that enables traders to monitor real-time market conditions while ensuring the price of currency pairs remains within the average market range.
A resource management system with flexible settings was implemented to effectively manage roles and facilitate the straightforward administration of coins and trading pairs. A key component of the project involved the development of a matching system that facilitated bidding between users, accommodating various types of buy and sell orders. Emphasizing liquidity and swift currency transactions were vital aspects, alongside prioritizing the safety and security of user funds. Lastly, the website was optimized and indexed by search engines to enhance its visibility and accessibility.
The outcome was Quan2um stands as a reliable cryptocurrency exchange platform where individuals can engage in the trading of popular listed coins. It upholds a robust security infrastructure in alignment with European standards.
For a comprehensive understanding of the project, we encourage you to explore the detailed case study.
We really hope that this article has provided you with the necessary insights to comprehend the expenses associated with developing blockchain applications. It is crucial to recognize the increasing popularity of these apps and the advantages they can bring to your business ensuring optimal ROI.
At Peiko, we are a committed blockchain app development company that can deliver top-notch solutions tailored to your specific business needs, integrating cutting-edge technologies.
If you are interested in incorporating blockchain into your business, feel free to reach out to our team.
We would be delighted to assist you with all your questions and hope for future cooperation.