According to a report, the international blockchain market was valued at around 10.02 billion USD in 2022. It is forecasted to reach 17.46 billion USD in the year 2023. This value is further expected to grow at a compound annual growth rate (CAGR) of 87.7% during the forecast period 2023 - 2030. This way it can reach 1,431.54 billion USD by 2030.
Needless to say, companies can profit from decentralized services in a centralized way via a private blockchain network. One of the reasons why most companies worldwide are turning toward building their own networks.
And why not when businesses can exercise complete control over their network, which can improve security and performance and make it easier for them to run their operations?
Well, if you are planning to build a secure private blockchain, this blog is for you. It will provide you with a step-by-step procedure for creating your own private blockchains.
Before diving into the topic, it is crucial to understand what private blockchain is all about and how it works.
Well, in simple words, a private blockchain is similar to a private asset owned by an individual or business. A private blockchain, in contrast to a public blockchain, has an administrator who oversees crucial tasks and controls access to read or block access. Because of the limitations on who can take part in transactions and validations, it is also known as a Permissioned Blockchain.
While blockchain app development, the relevant authority and blockchain developers select the entities that would make up this network. Companies don’t want the public to have access to this blockchain as they want to use it for internal purposes only.
The good thing about private blockchain is, that only a small number of users who have been given authorization by the network administrators can access them. Here are the following important details about how private blockchains function:
When it comes to the advantages of private blockchain over the public blockchain, the list is large. Here we will be discussing the major ones.
As opposed to public blockchains, private blockchains offer greater privacy. They enable businesses to safeguard private information and guarantee that only those with permission can access data on the network. This is especially crucial for companies handling sensitive data, including financial institutions, healthcare providers, and governmental organizations.
Due to their ability to incorporate strict security measures, private blockchains are more secure than public blockchains. A trusted group of users can be excluded from the network, lowering the possibility of hostile assaults or hacks. In order to further increase the security of the network, private blockchains can be built with specific security features like access restriction and encryption.
Because private blockchains are often smaller and have fewer participants than public blockchains, they can be more efficient. As a result, transaction fees can be reduced and transaction times can be sped up. Private blockchains can also be tailored to a company’s unique requirements, which can increase efficiency even further.
Private blockchains offer more network control to companies. They have the authority to establish their own governance frameworks, rules, and modifications to the network as needed. As a result, businesses can modify the network to suit their specific requirements.
Compared to public blockchains, private blockchains can be lesser complex. They can use a simpler consensus process and use less computer power to maintain the network. Smaller firms will have easier access to the network as a result of the lower maintenance costs.
After understanding in detail what private blockchains are all about and what they are capable of, it’s time to dive into the step-by-step and easy-to-understand private blockchain development process.
Step 1 :Be Specific With Use Case
Establishing the use case is the first stage in creating a private blockchain network. You must pinpoint the exact issue you are attempting to resolve or the business procedure you wish to streamline. Blockchain can be used, for instance, to strengthen consumer loyalty programs, streamline the settlement process for securities trading, improve supply chain management, and for many other purposes.
Establishing the use case is crucial because it enables you to identify the particular features and specifications your blockchain network will require. You may then use this to select the best private blockchain platform and development tools.
Step 2 :Select The Blockchain Platform
Once the use case has been specified, the next step is to select the ideal blockchain network. There are numerous blockchains accessible with their own advantages and disadvantages. The most usable platforms are Corda, Hyperledger Fabric, and Ethereum.
Smart contracts and decentralized apps (DApps) can be created on the decentralized Ethereum platform. It’s a well-liked option for developing private blockchain networks as it provides excellent flexibility.
A blockchain platform with permissions called Hyperledger Fabric is best suited for business use cases. Because of its modular and adaptable nature, businesses can tailor their blockchain network to suit their unique requirements.
The distributed ledger platform Corda was created exclusively for the banking industry. Businesses that want to simplify the settlement process for stock trading or other financial transactions can consider this option.
Well, the thing is you must take into account elements like scalability, security, and simplicity of development while selecting a private blockchain platform. The platform’s supported programming languages and development tools must also be taken into account.
Step 3 :Choose the Network Architecture
After selecting the blockchain network you must determine the network architecture. Choosing the network’s size, the functions played by each node, and the communication protocols to be applied, all fall under this category.
Each node in a private blockchain network is owned by a dependable member, like a business or organization. Nodes can play a variety of roles, including validator nodes, which examine transactions, and miner nodes, which build new blocks.
Security and effectiveness should be built into the network architecture. This includes deciding on the network topology, the communication protocols, and the consensus mechanism that will be used to verify transactions.
Step 4 :Smart Contract Development
Smart contracts are self-executing condition-based programs on the blockchain. They enable automated, secure transactions without the need for middlemen. Smart contracts can economize on transaction costs and streamline business processes in a private blockchain development solution.
Programming languages like Java (for Hyperledger Fabric) or Solidity (for Ethereum) are used to create smart contracts. In order to make sure they work properly and securely, they must be carefully tested and audited.
Step 5 :Node Setup
The setup of the nodes comes after the smart contracts have been created. To function effectively in the network, each node must be set up with the necessary hardware and software. This includes installing blockchain client software, such as Fabric or Geth for Hyperledger Fabric or Ethereum.
Nodes must also be wired up to the network and set up with the proper firewalls and encryption protocols, among other security features. By doing this, the network is guaranteed to be safe and secure from potential threats.
Step 6 :Testing and Deployment
Once the nodes are configured, you must test the network. Running simulations and scenarios during testing verifies that the network operates properly and satisfies the criteria outlined in the use case. Prior to the deployment of the network, testing also aids in finding any defects or problems that need to be fixed.
The network can be deployed once testing is done. The network is launched during deployment and made accessible to authorized users. To ensure that only authorized users can access the network, participants may be given access keys or credentials.
Step 7 :Maintenance &; Upgradation
The process of creating a private blockchain network is ongoing. To keep the network secure and effective, it needs regular maintenance and improvements. This entails keeping an eye out for any security risks on the network and routinely updating the hardware and software to reflect the most recent developments in blockchain technology.
Organizations or consortiums who need a high level of control over their blockchain network and data, and who want to make sure that only authorized parties can participate in the network, generally utilize private blockchains. Some applications for private blockchains include
Private blockchains can be used to monitor the flow of commodities via a supply chain, offering a safe and transparent record of each transaction. This can boost productivity, lower costs, and improve supply chain visibility.
Various financial applications, including cross-border payments, trade finance, and settlement systems, can be employed with private blockchains. Compared to conventional financial systems, private blockchains can provide faster transaction rates, reduced costs, and greater transparency.
Private blockchains can be used to safely store and distribute patient data across healthcare providers, guaranteeing that only authorized parties have access to that data. This can lower expenditures related to unnecessary testing and treatments and increase the quality of care.
Private blockchains can be used by governments for a range of purposes, including land registries, voting systems, and identity verification. Records that are safe against fraud and manipulation can be provided via private blockchains.
With the use of private blockchains, gaming platforms can be made that are transparent, safe, and where participants can be sure that the games are fair and that their winnings will be paid out securely and on time.
Private blockchain businesses are designed for the real estate industry. The market actually has to contend with excessive costs, insufficient liquidity, and accessibility. The only people who currently have access to real estate properties are those in the upper class. But for those from the lower or middle class, it seems to spiral out of control.
However, this sector can thrive with the use of private networks. It can ultimately provide people with fractional ownership, which they may then exploit to their advantage. In addition to securing the payment process, blockchain for real estate also eliminates any underlying criminal issues.
Blocktunix is a well-known private blockchain development company with a focus on offering complete solutions that assemble elite teams to develop and build a wide range of blockchain systems.
While considerably raising security requirements, our private blockchain development services help startups, scale-ups, and businesses meet the growing need for decentralized apps. We create ready-to-deploy private blockchains as well as proofs-of-concept for other blockchain networks, such as Hyperedger, Ethereum, and Polkadot.
Our team of talented engineers is perfectly equipped to assess your needs, work with you to harness the potential of blockchain technology, and customize it to satisfy your particular business objectives.
By utilizing our knowledge, we can assist you in navigating the complexities of blockchain and discover the myriad opportunities it presents to improve your company.
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