It’s more common than we believe. In the US alone, around 1 in 3 Americans have experienced identity theft, and according to the FBI, over 100,000 identity theft and personal data breaches occur every year.

The US Government’s Plan around Digital Identity Protection

In developing nations with small economies, experimenting with and implementing blockchain solutions for digital identity, also known as Self-Sovereign Identity (SSI) is easier since the scale of implementation is small. It was believed, however, that the same won’t work for the US or EU.

Proving the assumption wrong, The U.S. Senate Homeland Security and Governmental Affairs Committee recently passed a bill, the ‘Improving Digital Identity Act’, which is soon to move to the full Senate for debate. When the bill is passed, a task force – Improving Digital Identity Task Force – will be built to ensure citizens’ security and privacy and support “reliable, interoperable digital identity verification in the public and private sectors,”.

Since the goal of the act is to guarantee users’ data security and privacy, we are positive that it would include the implementation of emerging technologies, like biometric technology, artificial intelligence, or blockchain for digital identity verification.

The situation we’re finding ourselves in on the front of digital identity raises questions about what is lacking in the current system, leading to a situation where no one is safe from identity theft.

What are the Problems in Current Digital Identity?

Though often unnoticed by users who have accepted them, the shortcomings in legacy digital identity systems are both harmful and omnipresent. Even after being a critical element in every software that the user relies on for their everyday operations, nearly every stage – data collection, storage, and usage of data – is filled with privacy, security, and some ethical concerns.

Centralized Data Management Systems

Centralized data management is when a single authority gathers and stores users’ data. While it doesn’t look so bad on a high level, let us look at the realistic ground-level scenario.

There might be platforms that have more strict fill-up criteria than others, for example, a social media site might only need an email ID to sign users in but a banking or income tax application would require a complete financial or personal history before they provide you access to their services and portal.

Because of this, the users are forced to provide similar information (to different extents) across multiple platforms. With each platform having its database, each storing critical user information, the attack surface on a user’s data dramatically increases.

Expensive and Time-Consuming KYC/AML

Know Your Customers and Anti Money Laundering laws are considered highly significant by global regulation authorities. It was introduced in 2001 as an element of the Patriot Act. The root idea here is that businesses need to know their customers (i.e., verify identity, ensure they are real, and confirm that they are not on prohibited lists).

These policies help create and verify customers’ identities by using independent and reliable sources of information. On the other side though, these procedures can be extremely manual, complex and expensive for the entities involved in implementing them. Fenergo’s research finds that large FIs spend up to $30 million annually in guaranteeing adherence to the KYC and AML checks.

[Also Read: Blockchain technology for KYC: The Solution to Inefficient KYC Process]

Lack of Data Ownership and Control

The problem with having your data stored in multiple places is that you lose control over it. Every time you press the button saying, “remember my credentials” or something in the same tune, while there is a lot of convenience involved with not having to remember the credentials, there is also the issue of lost data ownership.

When you save or store data on the internet platforms, they use it to give you a better browsing experience – all good, until you realize that you don’t want to see personalized ads which feel too intrusive. Traditional or centralized identification systems don’t give users a way out if they don’t want companies to use their data for personal scale-ups.

Where Does Blockchain for Identity Management Fit in the System?

Driven by these obvious flaws, the digital identity management domain is ripe for blockchain’s entry. By combining digital identity and blockchain, a majority of these and other issues can be resolved while a range of use cases can be introduced.

The key elements of an identity as a service blockchain would comprise the users’ ability to monetize the data they create when browsing the digital platforms and then even track how the information is being utilized. It would also give them the ability to consciously and easily share their digital identity information; and keep their data secure on the way.

Here’s how digital identity on blockchain works today:

• • Zero-knowledge proof – It is a mathematical model that makes it possible for a party to prove they have insights about something without actually revealing any details about the thing.

• Embedded encryption – With digital identities on blockchain, users are able to benefit from émbedded encryption. It entails data is encrypted directly on the blockchain, making it impossible for other parties to read or view it in the absence of cryptographic keys.
• Revocation – Blockchain identity technology gives users a choice in terms of the amount of data they wish to make public. They are also given the right to revoke the access whenever they decide.

There are several other unique use cases towards achieving these objectives and making identity management blockchain mainstream. Before diving into them, let us look into what makes it possible.

Components of Blockchain for Digital Identity Management

Expanding the scope of blockchain for identity verification would require businesses to gather a complete understanding of how the different decentralization-focused elements come together.

Decentralized Identity

In sharp contrast to the traditional models, the decentralized approach gives control in users’ hands. It enables users to manage the outcome of their identity-sharing process – deciding what information to share with whom and for what duration.

A blockchain-based identity model, in addition to being completely transparent and immutable, also removes the reliance on third-party intermediaries, thus eliminating the potential risks and vulnerabilities linked with centralized architectures.

Self-Sovereign Identity

Self-sovereign identity is one of the key aspects of identity management blockchain. The model suggests that the sole authority to control the identity should remain with the users. It enables users to verify, manage, and modify their data without depending on any centralized authority or third-party intermediary.

With the help of the blockchain identity management approach, the risk of data breaches gets eliminated since they now decide whom to share their information and to what extent.

Identity Verification Mechanisms

These models work towards the verification of digital identity authenticity. Powered by the principles of cryptography, the mechanisms comprise generating keys for every identity, guaranteeing secure interaction and access.

In a typical blockchain identity verification setup, the validation process makes use of consensus algorithms through which it is ensured that no single entity controls the verification process, thus enhancing the system’s trustworthiness.

Powered by the components, several benefits of blockchain for identity management have been witnessed by the identity-reliant industries.

Benefits of Blockchain Identity Management

Blockchain digital identity solutions come with several benefits for businesses, governments, and individuals. Let us explore some of the top ones.

Identity Syncing

Identity synchronization is a primary blockchain offering. It allows users to share their identity/credentials across multiple platforms without the need for different logins and passwords, thereby lowering the risk of account hacks and collisions. All you have to do is control your private keys, this way, no centralized service provider owns your identity: instead, it is 100% yours. This model is a lot more convenient than handling different profiles across platforms.

Zero Redundancy

With blockchain, digital identity can be measured against the previous versions of themselves. So, every time you edit a credential the changes can be traced to you – this becomes possible through the immutable nature of blockchain, which makes it impossible to remove the recorded data until you (the author) allow it. The benefit makes digital identity blockchain a preferred solution for non-repudiable timestamping.

Sybil-ing Identification

Blockchain for identity and access management gives no incentive to users to create multiple identities. Moreover, a credential system can also be built where the identity’s past endorsements are recorded in every subsequent endorsement. This implies that as long as the original credentials are verified – maybe through security stages – all future actions will have been marked with your identity.

Proof of Existence

Blockchain offers authentic proof of existence by handling transactions linked with the associated document’s hash. This offers non-repudiation, which gets strengthened further by adding a digital signature built with the originator’s identity private key. Identity management with blockchain offers the following benefits over the current solutions:

• It is permanent
• It is public
• Control is centralized

Cost and Efficiency Optimization

Blockchain digital identity comes with great efficiency – both in terms of effectiveness and costs. By removing intermediaries, streamlining verification, and through reusable digital identities, the operational costs get significantly lowered. Moreover, the amount of resources that the IT infrastructure needs to manage also gets minimized, thus lowering the instances of fraud.

Enhanced Security

By giving users complete control over their data, blockchain identity solutions significantly lower the risk of data breaches which is otherwise very common in centralized systems. The cryptographic measure along with the self-sovereign identity model adds a layer of security in the identity mechanisms. Additionally, blockchain’s decentralized nature removes a single point of failure so in any event of a security breach, only a portion of the data comes at risk instead of the entire database.

KYC Revolutionized

Blockchain digital identity solutions can revolutionize traditional, expensive, and slow processes. By using decentralization-based identities, businesses can verify customer information cost-effectively and easily. All they have to do is read the blockchain where users have shared their data for public access. These identities are not just secure but are also reusable around multiple platforms, removing the need for customers to perform the same KYC processes again.

Up until this point, we have covered many facets of blockchain identity management but it has mostly been textual or rather high-level. For an entrepreneur, it is important to understand what the benefits would translate into in the real world.

Use Cases of Blockchain in Digital Identity Management

Blockchain-powered digital identities can transform multiple industries, right from traditional sectors including healthcare, financial services, and government offices, to comparatively new domains such as online marketplaces.

Healthcare

Blockchain identity solutions enable the secure transfer of medical records, bettering privacy and streamlining healthcare offerings. With decentralized identifiers, patients control their health data, giving access to healthcare providers as and when needed – all this while ensuring privacy and security of sensitive information.

[Also Read: How Blockchain Is Revolutionizing Healthcare]

Financial Services

In the financial sector, digital identity management using blockchain has shown the biggest impact. It can facilitate secure and real-time transactions, lowering identity theft and fraud. By using blockchain technology for identity verification, financial products can not just shorten customer onboarding processes but also streamline compliance processes, and improve the overall trust and security in the financial space.

[Also Read: Blockchain in Fintech: A Catalyst for Disruption in Finance World]

Government Services

Blockchain based identity can streamline users’ access to government services, easing tasks like voting and public benefits access. By using blockchain’s security and transparency features, governments can embed trust, lower their administrative burdens, and ensure the integrity of citizen information.

Decentralization also solves one of the biggest challenges governments face – data redundancy. With blockchain, every time a user updates their identity data it automatically gets reflected to all the parties who can read their information.

[Also Read: What Are the Benefits of Blockchain for Government Services?]

Retail

Blockchain identity verification can be used in the retail or eCommerce sector to establish proof of authenticity, ensuring compliance with industry-level regulations. By applying blockchain-based digital identities, businesses can enhance trust and security in online transactions, lowering fraud and offering a seamless customer experience.

[Also Read: How Can Blockchain Make B2B Retail More Profitable?]

These are only surface-level use cases of blockchain for digital identity, the entirety of the scope is yet to be explored by the digital space. However, if you came to us, a blockchain software development company trusted by brands like TaxiCoin, CoFi, MyMetaFi, etc. and asked for a walkthrough of a decentralized identifier, here’s what we would share –

Basic User Flow of a Digital Identity Blockchain

In the current user flow, the distributed nature of blockchain ensures that there’s no single point of failure, making it more resilient to hacks or data breaches. Additionally, cryptography ensures data security, with private keys enabling users to securely access and manage their digital identities.

Please note that this is a very basic user flow describing how blockchain for digital identity would work when a solution is built around it. We have worked on self-sovereign identity-backed decentralized identifier solutions encompassing smart contracts and cryptocurrency while solving several critical challenges like –

• Probability of threat actors creating a new branch that could overwrite and reverse all of the transactions on the public blockchain.
• Trust mapping physical identity with digital identity.
• Complex account recovery mechanisms

The blockchain identity solutions you have envisioned might need an entirely other user flow or challenges identification than the ones mentioned here. The best way to know would be by talking to our blockchain experts. Get in touch with them today.

FAQs

Q. How to use blockchain for identity management?

A. To use blockchain for identity management, one can implement a system where each individual’s identity information is stored as a unique digital record on the blockchain network. This information can include personal details encrypted to ensure privacy and security.

Through cryptographic techniques like hashing and digital signatures, users can maintain control over their identity data while still allowing authorized parties to verify its authenticity. Moreover, smart contracts can be employed to automate identity verification processes, enabling seamless interactions between individuals and organizations while reducing the risk of identity theft and fraud.

Q. What are some top blockchain for identity verification use cases?

A. Some top blockchain identity management use cases include:

• Self-sovereign identity: Empowering individuals to have full control over their digital identities, allowing them to manage and share their personal information securely.
• Know Your Customer verification: Streamlining the process of verifying customer identities for financial institutions and other regulated industries while ensuring data privacy and compliance.
• Supply chain management: Enhancing transparency and traceability by securely recording and tracking identities of products and participants across the supply chain.
• Healthcare records management: Safeguarding patient privacy and enabling seamless sharing of medical records among healthcare providers while maintaining data integrity.
• Voting systems: Improving the integrity and security of voting processes by enabling secure and verifiable digital identities for voters, reducing the risk of fraud and manipulation.

Q. How does identity management with blockchain work?

A. Identity management with blockchain works by storing identity information securely on a decentralized ledger. Each individual’s identity data is encrypted and stored as a unique digital record on the blockchain network. Through cryptographic techniques like hashing and digital signatures, users maintain control over their identity data while allowing authorized parties to verify its authenticity.

Additionally, smart contracts can automate identity verification processes, ensuring secure and efficient interactions between individuals and organizations while reducing the risk of identity theft and fraud. The immutable nature of blockchain for digital identity management ensures that once information is recorded, it cannot be altered or tampered with, enhancing trust and transparency in identity management systems.

In response to this demand, the reliance is growing again on the technology they have already used for data storage and transmission: Blockchain.

Since blockchain works on a time-stamped, immutable chain of data and information, it fits perfectly in the process of tracing. This has not been unnoticed by IP registries and government agencies like the European Union Intellectual Property Office (EUIPO), which is looking into the potential of blockchain IP protection.

In this article, we will dive into the role of blockchain technology and intellectual property, focusing on how the technology can be used by industries aiming to protect their work, data, and ideas.

Blockchain Applications to Protect Intellectual Property

The applications of blockchain in intellectual property management are wide-ranging and can be seen across patents, trademarks, and every other form of IP rights. Let us look at some of the key use cases.

Proof of Ownership

If the creator wishes to secure their rights, they can register the IP to the patent office. Additionally, if it is copyright, they would have to get their own evidence as a proof of ownership. The fact that in the internet era, anyone can download pre-created content and state it as their own makes exercising copyright very challenging.

To solve this, the Bitcoin protocol can be used for assessing IP ownership through three elements of ownership. First, there are the assets’ antecedents. Considering that blockchain offers an immutable record, it is used to list the “original” products that can be differentiated from counterfeit. The second is using blockchain to create IP ownership certificates. The last is using blockchain to dispute a later claim. This can be achieved by showing the earlier claim’s timestamp.

Establish an IP Marketplace

Another application of blockchain intellectual property can be seen in a marketplace where the creators can list the inventions in the form of ledgers with basic descriptions. This marketplace can also be used to find licensees for invention know-how.

Here’s an overview of what the intellectual property blockchain marketplace would look like with its three major functionalities –

• IP registries – IP offices can use blockchain to register IP assets and create a record of the assets’ lives.
• IP exchange – Blockchain can be used to transfer IP assets and as a means to attest, authenticate, and validate the properties’ transfer.
• IP payments – The technology can also be used for executing payments for the transfer or exchange of assets.

Evidence of IP Rights Usage

The patent data are generally distributed among national and international authorities operating at different efficiency levels and policies. This, in turn, makes working with global patent data cumbersome.

To simplify the process, a blockchain protecting intellectual property is brought to use. Technology makes it possible to develop ownership records to track ownership status and the usage of rights.

For example, every time a trademark gets used, the action can get registered in the blockchain, and the IP office can be notified in real-time. This can provide time-stamped, solid evidence of the trademark usage throughout its life.

Version Control in IP of assets

As the copyrights and patents evolve in their lifetime, digital assets also produce several versions of themselves.

To store all the information immutably, businesses can utilize another use case of blockchain intellectual property protection. The technology can link all the versions like an  “end-to-end” lifecycle maintenance of the asset.

For example, at present, defensive publications are used to prevent the patent of innovations by disclosing all the assets at an earlier date. Here, blockchain could also serve a similar function by giving every file a unique fingerprint, removing duplicates, versioning every upload, and indexing them so that the information can be easily traced.

Unregistered IP rights

The combination of blockchain and intellectual property can also assist with registering unregistered IP rights as it can easily offer evidence of the rights management information, time of creation, and jurisdictional requirements. A careful consideration, however, should be given to the platform’s design.

A blockchain property rights platform where any member can upload rights management information in the form of a time-stamped entry would be useful only when an authoritative third party like an IP office or a Collective Management Organization is involved. Moreover, the right holders might also be account holders, meaning that the Registry will not only record but also enable IP rights transactions. Ultimately, for blockchain IP protection to reach its full potential, a huge number of owners will need to use it and will have to cover a sufficient amount of copyright work.

These use cases of blockchain intellectual property protection are a sign of how big and impactful the technology can be for the industries focused on protecting innovations and creators’ rights. To understand blockchain for copyright protection better, let’s look into the working of a patent platform based on the technology.

Also Read: An Entrepreneur’s Guide on the Blockchain Technology and Its Uses

How Does a Platform Around Blockchain Technology Patents Work?

Before we get to the working of a platform that combines blockchain and intellectual property, let us look at the key users.

• Patent Creators: Users having the ownership of original data, for example – researchers, writers, artists, musicians, photographers, etc.
• Patent Consumers: Users who are looking to consume the content and support the creator’s work.
• Copyright Managing Entities: Users in control of protecting the Intellectual Property.

Step 1: Creators Sign Up on the Platform

Creators sign up on the intellectual property blockchain platform to patent their work. They then add the following information to register their profile.

• Name
• Address
• Contact No.
• Date of Birth
• Designation

The fact that their patent and personal information is going on the blockchain, their personal data security is assured with the guarantee of zero data disclosures.

Step 2: Creators Upload Their IP on the Blockchain Network

Once the blockchain platform sign-up is complete, an intellectual property is added, to which the patent application will be added. The creator can then easily apply and upload all the information related to IP on the network.

• Name of creator
• Name of owner
• Title
• Keywords
• Abstract
• Classification

After the data is saved on the network, blockchain protecting intellectual property ensures complete auditability and traceability to prevent data from getting duplicated or manipulated. After the patent gets added to the blockchain, it can also be made visible to every network member.

Step 3: Consumers Raise a Request to Use the Work

Consumers looking to use the content also register themselves on the blockchain IP protection platform. Once their profile is created and verified, they can request the creators to give them access to their patented content.

Before approving the request, a Smart Contract gets created that enables the consumers to access information in return for a fee or tokens.  So, once the creator approves their request, an NDA gets generated and signed along with the smart contract that ensures all the terms and conditions are read and will be filled.

Step 4: Patent Management Entities Enter the Blockchain Network

After the transaction has taken place, there can be a situation where disputes might arise, such as –

• Confidential information gets shared
• Proof of authorship is questioned
• IP rights get transferred
• Defensive publications are made, etc.

In these cases, the creator can report the issue to the patent office or consult a lawyer in the same blockchain network. Both the patent office and lawyers will be able to use the blockchain intellectual property protection platform to see the time-stamped auditable records and prove the provenance and originality of the content.

Now that we know the role of blockchain and intellectual property, along with a high-level view of what a technology-based IP protection platform would look like, let us see how similar applications are being used across the globe.

How Do Different Countries Use Blockchain for Copyright Protection?

In Europe, several government agencies and IP registries, like the European Union Intellectual Property Office (EUIPO), are involved in the research and promotion of blockchain capabilities within the sector.

In India, IPO (Indian Patent Office) is working on blockchain and innovative technologies like IoT and AI to power a  smooth patent process. The country is planning to build a Blockchain-AI-powered ecosystem for managing IP protection, intending to build an efficient, streamlined, and faster procedure.

A legal architecture for blockchain IP registry to safeguard and commercialize ideas is one of the earliest initiatives the IPO is taking for the Indian IP sector.

In the US, blockchain is being used to protect American businesses from IPR theft by testing the imports. The U.S. Customs and Border Protection (CBP) and the Department of Homeland Security’s Science & Technology Directorate have recently built a proof-of-concept (PoC) of a blockchain platform to test imports. It is planned that the trade secrets and personal data will be kept safe through encrypted keys, and the blockchain digital intellectual property protection platform will operate as an immutable ledger that will record all the trade transactions.

In Thailand, the Ministry of Commerce launched a feasibility study to explore the applications of blockchain in IP registration. The Thai Trade Policy and Strategy Office (TPSO) worked in sync with the British Embassy to analyze the study and then translate it into action plans for further development.

Real World Example of Companies Using Blockchain to Protect Intellectual Property

Still unsure about the importance of blockchain intellectual property protection? Seek inspiration from the companies leveraging blockchain for copyright protection.

Blockai

Blockai, a blockchain-based company catering to the diverse needs of writers and artists, utilizes timestamps to document the creation of new works and prevent copyright infringements.

Mediachain Lab

Mediachain Lab uses blockchain for its stock photo service. Users can find photos or upload their own to see who made them, where they’re from, and what they’re about. The best part is when you use these photos, the original creators get credit automatically.

Ujo Music

Ujo Music, a London company, leverages blockchain technology to empower musicians to self-publish their music online without relying on large labels or music publishers. Blockchain facilitates the creation of an internet infrastructure where artists can manage their marketing and data independently.

You may like reading: Business Benefits of Permissioned Blockchains

How Can Appinventiv Help Protect Your IP Rights?

Appinventiv is a leading blockchain software development company, helping businesses across industries develop, deploy, and upgrade dApps and blockchain networks for various purposes.

We have run multiple hypothesis tests around blockchain and intellectual property in our R&D department that focuses on exploring the multitude of applications of blockchain software development. Along with this, we are also working with a patent agency to set up their IP marketplace where creators can upload their work, and users can request to commercialize it in return for a fee.

Looking for a similar situation or wish to transform the patent industry with your revolutionary idea? Get in touch with us today and learn how we can help you protect your IP rights. With a team of 1200+ tech evangelists who understand the nitty-gritty of blockchain intellectual property protection, we can be a one-stop solution for all your blockchain needs.

FAQs

Q. What is the future of Blockchain for copyright protection?

A. Given the security, transparency, and immutability of blockchain, the technology can protect digital assets. Across the globe, legislative bodies and governments are already gradually recognizing and integrating blockchain as a compelling proof of evidence in the realm of intellectual property.

Going forward, blockchain could be embraced as a foundational technology by a majority of governments. This shift has the transformative power to unify the entire intellectual property system.

Since Blockchain development is still in its initial stage, we will witness more evolved use cases of Blockchain for IP protection in the near future.

Q. What are the benefits of blockchain intellectual property protection?

A. There are several benefits of using blockchain to protect intellectual property. Some of the most remarkable benefits of blockchain intellectual property protection are:

• Artists can quickly upload their works to blockchain platforms, unlike the Copyright Office registration process, which may take weeks or even months.
• Blockchain offers copyright holders greater control over their works, especially for digital creations.
• Creators can manage and protect their intellectual property worldwide without relying on centralized authorities.

Q. How can blockchain protect intellectual property?

A. Blockchain can protect intellectual property by providing a decentralized, transparent, and tamper-resistant platform for recording and verifying ownership of creative works. Blockchain establishes indisputable proof of creation and ownership through features like immutable ledgers and smart contracts. It enables instantaneous and global registration of intellectual property, eliminating the risk of unauthorized use or disputes.

However, while on one hand, the finance industry is becoming digital-first, trade finance remains a paper-heavy domain with some deep-rooted issues:

• Unstructured Data: All the trade documents come with huge unstructured data collections.
• Document Volume: 400 to 500 transactions are recorded every day, each with over 20 sub-documents.
• Compliance Checks on a Massive Scale: On average, more than 32 compliance checks are to be done across multiple documents.
• Eroding Manual Accuracy: Consistent increase in the number of errors resulting in low-risk compliance.

To solve this, the finance sector is once again turning towards the technology that brought in a new era of revolution. Blockchain.

Blockchain in trade finance is being explored in multiple capacities to solve not just the above-mentioned microscopic issues but also the gaps present in the sector as a whole.

But before we dive into the role and outcome of blockchain and trade finance, let us look at why the current gap is more than one company’s problem.

What Makes a Lack of Decentralization in Trade Finance a Geoeconomics Issue?

Trade financing is usually taken for granted by developed countries since both importers and exporters are supported by mature financial industries. Still, even in these geographies, small and medium-sized enterprises (SMEs) face challenges in getting financed because they come with less collateral, credit history, and guarantees, compared to large companies.

The SMEs of developing countries also face similar obstacles as their counterparts in the developed countries, such as verification of creditworthiness, but they also face other challenges, like smaller, selective, and less advanced local financial instruments. A key challenge in many developing countries is also a lack of access to the knowledge required for handling trade finance.

Here’s a graph representing the challenges US manufacturing SMEs face when engaging in global trade.

For over a century, the trade finance process has been run on a massive amount of paperwork and to make matters worse, banks and their corporate clients continue to use manual systems for tracking the trade activities – leading to an absence of transparency and excess expenditures.

It’s time to change that by bringing trade finance on blockchain.

Performing Trade Finance Using Blockchain: The Core Outcomes

Modern-day trade finance can benefit immensely from the utilization of blockchain. Through a strategic implementation of blockchain technology in trade finance, the stakeholders can cut down processing time and heighten security, transparency, and trust in the transactions. Moreover, there are zero instances of manipulation when the intermediaries get removed from the system.

Here are some key benefits of blockchain-based trade finance.

Efficiency

One of the primary trade finance blockchain use cases can be seen in the process of becoming efficient through the completion of a transaction between the appropriate parties without the presence of an intermediary. Using the smart contract functionality, both parties can build contracts that can automatically initiate commercial transactions, leading to the entire industry becoming streamlined and speedy.

Traceability

Through the integration of blockchain technology in trade finance, both exporters and importers can see the location of their assets and goods in real-time. Moreover, owners can pass down relevant information to the stakeholders for timely action. This leads to a situation that defines a perfect transaction outcome.

Auditability

Blockchain technology in trade finance makes it possible, and even easier, to audit every single transaction sequentially, indefinitely. On top of giving a permanent audit trail of the traded asset, the technology also lowers the overall compliance expenses and betters the capability to authenticate the assets.

Transparency

Trade finance on blockchain makes it possible to record multiple transaction details in sync with the business agreements. When placed in a decentralized network, it becomes easy to share the data between the participants with the assurance of immutability. As a result, the change of data tampering gets reduced to almost null.

Now that we have had a high-level view of blockchain in trade finance, let us look into its use cases by studying its inclusion across some of the most used trade finance instruments.

Applications of Blockchain-Based Trade Finance – A Look at Instruments

Blockchain in trade finance and supply chain can have an impact across most of the trade finance instruments, as for the rest, we are sure that an application is underway. For this article, let us keep the discussion of how blockchain technology in trade finance leaves an impact across different instruments limited to three.

Blockchain and Letter of Credit (LC)

A letter of credit can be defined as a letter issued by a bank to another bank (especially one in a different country) that serves as a guarantee of payments that will be made to a specific person under specific conditions.

Here’s how this otherwise document-heavy process works on blockchain-based trade finance.

1. The Applicant and Beneficiary enter into a trade agreement stored on the blockchain network.
2. The Applicant then issues a ‘purchase order’ for The Beneficiary in their Billing System, which acts as the contract for LC.
3. The Applicant, next, gathers the LC Application details through their system, which is also on the Blockchain Network. The system then interacts with ‘The Issuing Bank’ and requests his bank to issue an LC. ‘The Applicant’ gives all the information for LC, consisting of the purchase order in digitized form to the bank.
4. The LC details are received by the bank and it processes the same before sending it to the Advising Bank.
5. ‘The Advising Bank’ gets the LC and advises it to ‘The Beneficiary’ in digital form – all through the blockchain network.
6. The Beneficiary provides the digital acceptance/rejection of ‘The Advising Bank’ through the blockchain network.

At the end of this six-stage process, a contract is built between the exporter and importer, stating that the exporter will give goods as specified in the LC, and the importer will make payment against the goods received as per the LC terms.

Blockchain and Forfaiting

The next application of blockchain and trade finance can be seen in the role it plays in forfaiting. The instrument allows exporters to get cash by selling their medium and long-term foreign accounts receivable at a discounted rate on a “without recourse” basis.

A real-world application of banks using blockchain for trade finance through the way of forfaiting can be seen through the transaction between HSBC and the Bank of Communications on the China Trade Finance Union blockchain platform.

Under the transaction, a Bank of Communications client selling paper products received an undertaking to pay in 180 days from their buyer’s bank. The Bank of Communications after purchasing the payment obligation from the client sold the undertaking to HSBC through the blockchain technology trade finance platform. Every document from confirmation letter, offer letter, and transfer of rights was created and transmitted digitally only in a matter of a few hours.

Blockchain and Invoice Factoring

Factoring is a finance type where businesses sell their accounts receivable (invoices) to a third party to meet their short-term liquidity requirements. Under this transaction, the factor pays the invoices’ due amount after deducting their fees and commission.

The problem with this setup is that the process is dependent on traditional lending organizations like private entities or banks, who in turn, charge expensive interest rates that too only when they are given the guarantee of additional collateral.

In a blockchain and trade finance world, the invoices are tokenized under a non-fungible model, which makes them easy to transfer and store. Now the payment of these tokens is usually performed through smart contracts having invoices in the face of NFTs. Additionally, companies can also trade their invoices through a distributed ledger platform which records all the transactions between parties.

This particular use case of blockchain in trade finance highlights the scope of a platform that would connect companies and investors in a way to counter the monopoly of a few entities in the trade financing instrument. To make the platform even more powerful, you can plan on adding a credit-scoring algorithm and a strong KYC model to ensure that the platform becomes truly useful on a mass adoption level.

Blockchain and Trade Credit Insurance

Several commercial buyers ask for credit to make large purchases, but lending them puts the supplier at risk that it will not get repaid. This is especially true for unsecured debts, where creditors do not have collateral for the loan.

Trade credit insurance eliminates the risk by compensating the policyholders for unpaid debt as allowed by their applicable coverage limits.

Where does a blockchain trade finance platform fit into this? Through the technology, companies can build an immutable record of the policy by first generating a cryptographic hash of the signed contract and then recording it on the blockchain to then be checked again as immutable evidence.

In addition to playing a role in all the major trade finance instruments that companies opt for when doing international transactions, blockchain impacts some other areas as well.

• Trade chain – This is where all the trade-related events starting with the issuing of the letter of credit to the final delivery of all trade documents happen over blockchain DLT. The benefits of this approach can be seen in shorter trade documents’ delivery time, reduction of efforts needed to create and share documents, and increased transparency.

A real-world example of this can be seen in the trade transaction that Japanese conglomerate Marubeni Corporation and Sompo Japan Nipponkoa were involved in.

• Supply chain – Many companies are exploring blockchain’s capabilities to digitize the supply chain for their network of freight forwarders, shippers, ports, ocean carriers, and customs authorities. With the technology’s help, they are aiming to lower errors and frauds, reduce transit and shipping time, improve inventory management, and bring transparency to the goods authentication process.

Now that we have looked into the multi-faceted role of blockchain and trade finance, it is time to address a situation that is rarely vocalized by the technology’s enthusiasts – several platforms that were pushing trade finance on blockchain never moved beyond the pilot stage.

Based on our observations of Marco Polo Network, MonetaGo, and Komgo, especially their failures, we found that business models and less corporate uptake were the biggest hurdles. With a majority of these and other platforms, the issue was that they were made with banks in focus, instead of creating a new class of users. The issue with banks is that they are not willing to digitalize and the moment a nationwide or global instance like COVID-19 or the Ukraine war happens, they shift their entire focus to them.

How Can Appinventiv Help You Adopt Blockchain in Trade Finance?

At Appinventiv, we make market research and analysis a continued activity – one that doesn’t start with a project. And we have ideas on how to make your trade finance blockchain use case click.

Our strong portfolio of blockchain and fintech software development projects in our nearly decade long experience, along with a competent team of over 1,200 professionals further make us the ideal fit for your blockchain and trade finance needs.

Get in touch with our blockchain application development service team to access the knowledge set.

FAQs

Q. How does blockchain impact trade and finance?

A. Blockchain technology in trade finance makes inter-geography transactions and goods movement a streamlined, simplified, and secure journey with its decentralization capabilities. By bringing the entire sector on an immutable platform using the powers of smart contracts, DLT, NFTs, etc., blockchain makes it easy for inter-country businesses to work with the confidence of assured payments and delivery.

Q. What are the benefits of blockchain in trade finance?

A. The advantages of combining blockchain and trade finance range from high efficiency and auditability to secure transparency and immutable traceability.

Q. What are some of the banks performing trade finance on blockchain?

A. According to Trade Finance Global, several banks are exploring the applications of blockchain technology in trade finance. Some of the top names include – Bangkok Bank, BNP Paribas, CTBC, Citi, ING, HSBC, SEB, and Standard Chartered.

Consequently, the world’s leading brands like Starbucks and Gucci accept cryptocurrencies as a legitimate payment method. In fact, Elon Musk once tweeted, “You can now buy a Tesla with Bitcoin”. This visionary concept has turned into a transforming reality, signaling a profound change in the landscape of online payments.

According to Statista, cryptocurrency payments are projected to grow at a CAGR of 17% from 2022 to 2029, reaching a market value of $4.12 billion during the period.

However, the number of platforms providing crypto payment services is limited. BitPay, among CoinPayments, CoinGate, BitcoinPay, and SpicePay is one of the most popular payment gateways capturing the limelight in the crypto sphere. 

The immense popularity of the platform provides entrepreneurs, CTOs, and CIOs with a lucrative idea to capitalize on this growing trend. Accordingly, emerging startups and enterprises are increasingly investing in crypto payment gateway development like BitPay to ensure safe and secure transactions.

When it comes to development, companies often grapple with the question, ‘How much does it cost to develop a crypto payment gateway like BitPay?’ Well, coming straight to the answer, a BitPay crypto payment gateway development cost can range from $30,000 to $300,000 or more, depending on the project’s overall complexity. The costs include not only developing the platform but also the ongoing expenses of keeping the app functional, secure, and appealing to its users.

In the subsequent sections below, let’s gain an in-depth understanding of the various crypto payment app development cost contributing factors. However, before delving into that, let us first explore the major reasons behind the massive popularity of BitPay as one of the prominent cryptocurrency payment gateways.  

Understanding BitPay- An Exemplary Crypto Payment Gateway

Founded in 2011 in Atlanta, Georgia, BitPay currently ranks at the top position in the crypto world, processing all payments with 16+ cryptocurrencies, including Bitcoin, Ripple, Ethereum, EOS, etc., and operating in 200+ countries with support to over 20,000 businesses. It is certainly a lucrative number that any business wishing to launch its own crypto payment platform would admire.

With BitPay, the conversion of currencies is so easy that you will barely look for any alternatives. The system effortlessly converts all currencies to Bitcoin or other cryptocurrencies, enabling global transactions for both payers and receivers. This straightforward method offers a convenient alternative to dealing with fiat money. Although fees are applicable, the quantity varies based on the chosen plan, with four tariff options ranging in cost from $0 to $3,000.

By establishing individual client networks, the platform delivers exceptional results to users, implements effective traffic control measures, and drives business growth with reduced fees and flexible tariff plans. 

Some Interesting Facts about BitPay 

• Accepts 16+ cryptocurrencies, accounting for 70% of the global crypto market cap.
• Has processed more than $10 million transactions.
• Access 229 countries and territories worldwide.
• Bank deposits in 38 countries are settled in euros, GBP, US dollars, and more.

In essence, this platform functions as a service that fortifies your networks, facilitating expansion without hindrances. By providing a user-friendly platform for processing crypto transactions, BitPay has become synonymous with efficiency, reliability, and security in the crypto payment ecosystem, leading to many businesses aspiring to build a payment gateway similar to it.

Related Article: An Ultimate Guide to Blockchain Wallets

Factors Affecting the BitPay-like App Development Cost

Building a crypto payment gateway like BitPay involves a myriad of factors that collectively contribute to the overall cost of development. Understanding these key elements is crucial for businesses considering such a venture. Here are the factors that significantly influence the BitPay-like cost of payment gateway development:

Platform Complexity

The platform complexity and set of features required to bring your product idea to life is one of the most significant factors affecting the BitPay-like app development cost. A platform like BitPay encompasses intricate functionalities such as transaction processing and real-time updates. Each element adds layers of intricacy to the development process, necessitating a proportional commitment of financial resources, time, and skilled personnel. The more intricate the functionalities and feature set, the higher the investment required for successful development.

Here is an approximate cost breakdown based on the platform’s level of complexity:

Location of Developers

The geographical location of the development team has a direct impact on Web3 crypto payment gateway development costs. Hourly rates for app development companies vary widely depending on the geographic location. For instance, a company in the US or UK will substantially charge more compared to an organization in Asian or African regions.

Here is a breakdown of the crypto payment app development cost based on the developers’ location.

Security Level

Building trust in a crypto payment gateway necessitates robust security measures. The implementation of encryption standards, the incorporation of multi-factor authentication, and compliance with regulatory requirements all play vital roles in defining the cost of payment gateway development.

Also Read: FinTech Cybersecurity – How to Build a Financial App with Proactive Security Measures?

UI/UX Design

BitPay’s intuitive interface, visually appealing design, and mobile responsiveness are the driving forces behind its unparalleled success. While these aspects contribute to user satisfaction, they also add to the development cost. Thus, the cost to develop a crypto payment gateway like BitPay can vary based on the complexity of its UI/UX design.

Payment Processor Integration

As mentioned above, BitPay accepts 16 cryptocurrencies, which account for 70% of the global crypto market cap. Compatibility with a variety of cryptocurrencies requires seamless integration with diverse payment processors. The integration of APIs and the consideration of transaction speed significantly impact development complexity and associated costs.

Legal and Compliance Costs

Building a crypto payment gateway like BitPay requires compliance with regulatory frameworks like anti-money laundering (AML) and know-your-customer (KYC). This involves engaging with the ongoing efforts of skilled developers to comply with industry regulations, ensuring seamless transaction processing. It adds to the overall cost of web3 crypto payment gateway development.

Testing and Quality Assurance

As said above, a crypto payment gateway like BitPay often has stringent security and compliance requirements. Thus, investing in robust testing tools and software is crucial for ensuring quality, security, and reliability of the Web3 crypto payment solutions. While these efforts contribute to development costs, they are indispensable for a stable and secure platform.

Maintenance and Updates

Ongoing maintenance, including bug fixes, security updates, and new feature implementation, plays a vital role in ensuring the seamless operation and prolonged viability of the crypto payment gateway. This continuous upkeep constitutes an ongoing expenditure that contributes to the overall crypto payment gateway development cost.

Essential Features to Make a Crypto Payment Gateway like BitPay

Features are the fuel that infuses life into a crypto payment app, making it successful and profit-driven. Thus, businesses must ponder over the essential features when considering building a crypto payment gateway like BitPay. If you are wondering which features are the best suited for your crypto payment gateway, we have compiled a detailed list below. Just refer to them and make your app stand out from the crowd.

Multi-Cryptocurrency Support

It is one of the most important features of BitPay-like platforms that allows users to transact in various cryptocurrencies, providing flexibility and accommodating different user preferences. It expands the utility of the payment gateway and appeals to a broader audience engaged in various digital assets.

Conversion to Fiat Currency

The feature of converting cryptocurrency payments into fiat currency provides merchants with flexibility. It accommodates those who may prefer traditional currencies, facilitating a more seamless integration of crypto payments into existing financial systems.

Secure Wallet Integration

Security is the most integral feature of a crypto payment gateway like BitPay, empowering users to store and manage their cryptocurrencies with confidence. This feature is crucial for protecting users’ digital assets, employing advanced encryption techniques and secure storage protocols.

Also Read: Cost to Make A Crypto Wallet App on Blockchain

API Integration

API integration allows businesses to connect their crypto gateways easily with other platforms, such as eCommerce websites like IKEA, Amazon, Walmart, Adidas, and so on. This feature streamlines the integration process for businesses, enhancing the overall accessibility and usability of the payment gateway.

Real-Time Transaction Monitoring

Real-time monitoring allows users and merchants to track transactions instantly. This transparency enhances trust, enabling users to stay informed about the status of their payments and facilitating quick responses to any issues that may arise.

User Authentication and Security

Integrating the features of robust security measures like two-factor authentication, KYC verification, and data encryption fortifies the payment gateway against unauthorized access and protects user accounts from cybercrime.

Dashboard

A comprehensive dashboard serves as the central hub for users, offering an at-a-glance overview of account activity, transaction statuses, and relevant information. Intuitive data visualization, detailed transaction logs, search functionalities, and categorization enhance transparency and user control over their financial data.

Ticket Generation

Efficient ticket generation mechanisms empower users to seek assistance or report issues promptly. User-friendly interfaces for creating tickets, and real-time tracking of their status help enhance user satisfaction and increase trust in the customer service ecosystem.

Merchant Tools

Merchant tools provide businesses with the necessary infrastructure to manage transactions efficiently. This includes features for tracking payments, analyzing sales data, customizing payment options, and empowering merchants to optimize their payment processes.

You can connect with a fintech app development company like Appinventiv to add these features when considering building a crypto payment gateway like BitPay for your business. These professionals possess better knowledge, skills, and experience to create a crypto payment gateway.

How to Make a Crypto Payment Gateway like BitPay?

When planning to make a crypto payment gateway like BitPay, a comprehensive understanding of the crypto payment gateway development process can help the venture run smoothly. So, whether you are developing a gateway like BitPay, considering white label crypto payment gateway development, or exploring platforms such as PayPal, CoinPayments, CoinGate, BitcoinPay, and SpicePay, an understanding of the process serves as a valuable reference.

Market Research and Planning

Conduct thorough research to identify market demand, competition, and target audience. Having gained an in-depth understanding of the market, create a framework for your white label crypto payment gateway development project.

Choose Blockchain Integration

Select the blockchain(s) network to integrate, focusing on major cryptocurrencies like Bitcoin and Ethereum. Establish secure API connections with blockchain networks to enable seamless transactions.

Hire a Blockchain Development Company

Outsource a reliable team of skilled developers, designers, and project managers with experience in blockchain technology. They are skilled professionals who will bring your project idea to life, ensuring the quality, functionality, reliability, and security of the solution.

Design UI/UX

Craft a visually appealing and user-friendly interface for both merchants and users. Design a smooth user flow to ensure intuitive transactions and effective account management.

Security Implementation

Prioritize security measures, including data encryption and secure user authentication. Implement fraud prevention measures to safeguard against unauthorized access.

Integrate Payment Processing

Integrate payment processing APIs to facilitate cryptocurrency transactions. Provide merchants with tools for easy integration into their platforms.

Merchant Integration Tools

Create plugins, APIs, or SDKs for merchants to easily integrate your payment gateway. Offer solutions compatible with various eCommerce platforms to broaden your user base.

Testing and Deployment

Conduct comprehensive testing to ensure the functionality, security, and usability of the platform. Once done with the testing and iteration phase, it is time to launch your crypto payment gateway for end users. 

Ongoing Maintenance and Updates

Monitor the performance of your payment gateway to promptly address any issues. Release updates to enhance functionality and address user feedback for continuous improvement.

These steps form the foundational framework for constructing robust and reliable payment gateways. To ensure the seamless and successful development of a crypto payment gateway like BitPay, partnering with a reliable blockchain and fintech app development company like Appinventiv can be a strategic choice.

Whether your objective is to build a white label crypto payment gateway to cater to businesses seeking off-the-shelf solutions or create a custom solution for your enterprise and its merchant facilitation needs, our seasoned blockchain developers stand by you throughout the process.

Why is Appinventiv a Strategic Choice for Crypto Payment App Development?

Appinventiv is a leading fintech app development company, accelerating digital innovation and driving growth for businesses worldwide. We have been engaged in delivering next-gen blockchain development services for a very long time and have never failed to deliver the desired results to our clients.

With a proven track record of building 500+ custom FinTech solutions, we guarantee the seamless development and sustained success of your crypto payment gateways. Our team of 350+ FinTech professionals is well-versed with the latest technologies and best practices required to create a crypto payment gateway like BitPay. This expertise extends to integrating these gateways with cryptocurrency exchanges, ensuring that your platform can handle secure, efficient transactions across different crypto ecosystems.

With us, your journey to BitPay crypto payment gateway development will be an easy road free from barriers and errors, leading to a destination that gives a competitive edge to your business. So, if you are looking for a company for a secure crypto payment gateway development like BitPay, contact us now.

FAQs

Q. How much time does it take to make a crypto payment gateway like BitPay?

A. The time it takes to make a crypto payment gateway like BitPay can vary based on various factors such as the project’s complexity, development team efficiency, features, and so on.

On average, BitPay crypto payment gateway development can take 3 to 9 months or more. However, the precise timeline depends on your specific project requirements and the allocated resources.

You can connect with our blockchain experts and discuss your project requirements to get an accurate idea of the timeframe required to bring your project to life.

Q. How much does it cost to develop a crypto payment gateway?

A. The cost to develop a crypto payment gateway like BitPay can vary depending on multiple elements like the features and functionalities of the gateways, its UI/UX design, the location of the app developers, and so on.

On average, crypto payment app development costs range between $30,000 to $300,000 or more, based on your unique project requirements. 

Discuss your project idea with us and get an accurate estimate for your crypto gateway platform development.

Q. What are the benefits of web3 crypto payment gateway development?

A. The development of a crypto payment gateway offers numerous advantages. Here is a list of some of the most common benefits of crypto payment gateway development:

• Crypto payment gateways provide a secure transaction environment, reducing the risk of fraud and unauthorized access.
• Such platforms allow businesses to reach a global audience without the constraints of traditional banking systems or currency exchange rates.
• Cryptocurrency payment gateways can significantly reduce transaction fees by eliminating intermediaries such as banks, making it more cost-effective for merchants and customers.
• Since crypto platforms operate 24/7, they facilitate faster transactions, enhancing the speed and efficiency of each transaction.
• The irreversible nature of cryptocurrency transactions reduces the risk of chargebacks, providing merchants with greater assurance and reducing disputes.

Q. What are the essential features to add during white label crypto payment gateway development?

A. The essential features in a white label crypto payment gateway include robust security measures such as encryption and two-factor authentication, support for multiple cryptocurrencies, seamless integration options for merchants, customizable branding and user interface, comprehensive reporting and analytics tools, compliance with regulatory standards, and scalable infrastructure to accommodate business growth.

Also Read: The Pros and Cons of White Label App Development

Deploying a blockchain application on the web or even mobile comes laced with multiple complications ranging from high costs, continued maintenance, and expensive, technically-intensive scaling. To solve these challenges, the blockchain sector expanded itself to a phenomenon called BaaS – Blockchain as a Service.

Like other offerings of the everything-as-a-service sector, BaaS provides an external service platform for businesses to set up the necessary blockchain infrastructure and technology in exchange for a fee. Once set up, the provider takes charge of handling complex back-end operations for the client.

Typically, the BaaS operator provides support activities, like bandwidth management, allocation of resources, hosting needs, and data security. This frees businesses to focus on the primary job: strengthening the blockchain functionality.

Now, when we talk about BaaS platforms, AWS-managed blockchain usually tops the list, and as we delve into the article further, you will know how it’s for the right reasons.

What is AWS Managed Blockchain (AMB)?

Amazon blockchain, or AWS managed blockchain, is an end-to-end managed service offered by Amazon Web Services. The platform enables developers to create and deploy scalable blockchain networks – on Hyperledger Fabric and Ethereum – easily and quickly while eliminating the need for manual configuration, setup, and even the management of blockchain infrastructure.

In order to truly understand what AMB is, it is important to know the Amazon-managed components it is built upon.

1. Ordering Service

The default ordering service that Hyperledger Fabric uses is Apache Kafka. While it meets the requirements of a messaging platform that delivers transactions sequentially, it is not optimized for storing a complete transaction data history. Amazon-managed blockchain comes with its own ordering service known as QLDB technology which comes with an immutable change log and manages the entire record of the uncommitted transactions in the network.

2. Fabric CA and AWS Key Management Service (AWS KMS)

Hyperledger Fabric CA is a Certificate Authority (CA) used by Hyperledger Fabric.

Based on the AWS key management service, it comes loaded with features like:

• Registration of identities
• Issuance of Enrollment Certificates (ECerts)
• Revocation or renewal of certificates.

AWS Key Management Service enables developers to create, manage, and even control cryptographic keys all across their AWS services and applications.

3. Analytics

In order to divert the pressure from blockchain resources, AMB has planned on allowing network activity data from the Managed Blockchain network to get sent to the QLDB, which the developers own. Through the platform, a deep-level analysis can be performed through QLDB and other specialized analytics tools.

Now that we have looked into the basics of Amazon-managed blockchain in a way that explains its core elements, let us get down to the core benefits of AWS-managed blockchain by dissecting their feature sets.

The Benefits of AWS Managed Blockchain

The reasons why businesses choose AWS managed blockchain is partially because of the fact that the platform is being used by a range of companies across enterprise and consumer ends, such as AT&T, Depository Trust & Clearing Corporation, Guardian, Nestle, etc., and partially because of the useful AWS managed components.

Mentioned below are some remarkable benefits of AWS Managed Blockchain:

Fully Managed

• Few-clicks network setup – Starting with Amazon Managed Blockchain is extremely easy for any business – one can launch a blockchain network within minutes without the need of any additional configuration. Following this, you can easily configure the network membership and launch blockchain peer nodes through the AWS Management Console.
• New members addition – Amazon blockchain comes with a voting API that enables a blockchain network’s members to quickly vote on proposals around removing or adding new members.
• Public network joining –  You can select the public network you wish to join and provision a peer node with AWS Management Console. Blockchain on AWS offers secure networking, fast and reliable linking with the blockchain network, elastic storage for the ledger data, complete data encryption at rest and transport, and safe access to open-source APIs.

Choice of Frameworks

• Ethereum  – AWS Managed Blockchain supports Ethereum, providing a decentralized platform for smart contracts and decentralized applications (DApps). With scalable and secure infrastructure, it ensures efficient deployment and management of Ethereum-based networks.
• Hyperledger Fabric – For enterprise-level applications, AWS Managed Blockchain offers support for Hyperledger Fabric, delivering a permissioned blockchain network. This choice empowers businesses with a flexible and modular framework, ideal for building tailored, scalable solutions with enhanced privacy and control.

Scalability and Security

• Easy scalability – If you have to scale up a blockchain application, implementing AWS-managed blockchain can help add peer nodes for processing transactions at a much faster rate. AWS blockchain architecture offers APIs that enable the quick creation of new nodes that meet the fluctuating demands of the application.
• Safe interactions with VPC endpoints – You can also securely interact with the Hyperledger Fabric components managed by Amazon Managed Blockchain via Amazon VPC (Virtual Private Cloud) endpoints. Moreover, one can securely interact with the blockchain peer nodes from other network members through the endpoint for endorsing transactions.

Reliability

• Amazon QLDB technology comes with an immutable change log and maintains the entire history of the uncommitted transactions of the blockchain network.

What Are the Uses of Amazon-Managed Blockchain?

Across industries, blockchain enthusiast startups and established businesses use AWS-managed components to find applications specific to their sector. Let us look into the industries that are enjoying the benefits of Amazon-managed blockchain.

Supply Chain Management

AWS-managed blockchain implementation can lead to a decentralized supply chain management system. One that would offer transparency and end-to-end visibility across the supply chain while enabling secure goods tracking, verification of items’ authenticity, and an efficient inventory management process. It offers complete trust and lowers the chances of counterfeit or fraudulent products.

Related Article: How is Blockchain Disrupting Supply Chain Management

Financial Services

The financial industry can also benefit greatly by implementing AWS-managed blockchain. The platform can help them create decentralized applications that promise safe, effective transaction settlement, authenticated trade finance, and identity management. All of this helps streamline processes, lower costs, and enhance trust and transparency in financial transactions.

Also Read: Blockchain in Fintech: A Catalyst for Disruption in Finance World

Healthcare

AWS-managed blockchain implementation can be applied in healthcare to maintain immutable and secure patient data records. The process is valuable in powering data privacy and integrity while enabling interoperability between multiple healthcare providers. The service can also improve data sharing efficiency and enhance patient care coordination, ultimately leading to improved healthcare outcomes.

You may like to know: Will Blockchain Revolutionize Healthcare? The Truth or A Hype

Voting Systems

By using the AWS service offerings, voting architectures can be built to provide transparent and change-resistant vote records. The functionality elevates the integrity and security of the voting process, prevents fraud, and ensures trust in a democratic system. It also simplifies the process where voter eligibility is verified, and accurate voter records are maintained.

Digital Identity Management

Implementing AWS-managed blockchain can secure and decentralize Digital Identity Management systems. This software would provide a reliable platform for individuals to control and take care of their digital identities, lowering the probability of identity theft and unauthorized access. This functionality ensures that the identities’ security and privacy remain intact through blockchain-focused immutability and integrity.

Supply Chain Traceability

With Blockchain in AWS, businesses can establish end-to-end traceability in complex supply chains. This enables tracking and verification of product origins, certifications, and compliance with regulatory standards. The service enhances transparency, reduces counterfeiting risks, and builds consumer trust.

Intellectual Property (IP) Protection

Blockchain in AWS can be utilized to protect Intellectual Property (IP) rights. It enables the creation of a decentralized registry for patents, copyrights, and trademarks, ensuring immutability and provenance of ownership. The service facilitates the secure sharing of Intellectual Property information and simplifies the process of ownership verification.

Energy Trading and Grid Management

When you build a blockchain on AWS, it can enable the onset of decentralized energy trading platforms. One that allows the participants to safely trade energy, measure the generation and consumption of renewable energy, and power transparency in energy transactions. The functionality can also power Grid Management through an optimization of energy distribution and enhanced energy efficiency.

Gaming

AWS-managed blockchain implementation also comes in handy for gaming companies that can use the platform to build a decentralized network for gaming products where the players can safely trade in-game assets and currencies. Moreover, the game can also be built to add other functionalities like secure in-game messaging, a smart contract enabling guaranteed transfer of monetary or assets transfer, etc.

The different uses of Amazon-managed blockchain mentioned here are in a high growth mode and constantly expanding into more industries. However, a successful AWS blockchain service offering is highly dependent on how well it is implemented.

What is the Process for AWS-Managed Blockchain Implementation?

While Amazon has launched an extremely detailed guide, presentation, and video pointing out how to use Amazon-managed blockchain by connecting multiple platforms like AWS, GitHub, Amazon QLDB technology, etc., here is a quick high-level walkthrough of what to expect.

a) Sign up for AWS: If you don’t have an account on AWS, sign up on the AWS website. You will need a valid payment mechanism and email address to create the account.

b) Access the AWS Management Console: Once you have the AWS account, open the AWS Management Console. This console is the central platform for managing all AWS services and resources.

c) Navigate: In the AWS Management Console, look for the AWS Blockchain service section. You can either search for “AWS Blockchain” in the search bar or find it under the “Blockchain” category on the page.

d) Create a blockchain network: Click “Create network” to start building the blockchain network. Follow the prompts on the interface and configure the network settings, like the name, type, and membership category.

e) Deploy smart contracts: After building the network, you can deploy your smart or intelligent contracts. These elements are self-executing contracts with the terms directly written in the code.

f) Monitor and secure the network: It is critical to ensure that AWS blockchain architecture is performing and safe – something that can be achieved when you use the monitoring and security features provided by the platform. Implementing AWS-managed blockchain also sets up alerts and notifications that inform businesses about potential security threats and network activities.

g) Integrate with other AWS services: Blockchain in AWS can be seamlessly integrated with other AWS services, leading to the development of applications that come with next-gen capabilities. Businesses can also use services like AWS Identity, Amazon EC2, Access Management (IAM), and AWS CloudFormation to optimize their application’s functionality.

Leverage AWS Blockchain with Appinventiv

As we navigate through the benefits and features of AWS Managed Blockchain, it becomes clear why it stands out as the first choice for businesses venturing into Blockchain as a Service (BaaS). Its seamless integration with popular frameworks like Ethereum and Hyperledger Fabric, coupled with robust security measures and simplified management, positions it as a reliable and scalable solution.

However, the journey to leverage the full potential of AWS Managed Blockchain starts with partnering with a reliable development partner like Appinventiv.

We, as a leading blockchain software development company, have proven expertise working with Amazon blockchain, assisting businesses on this transformative path.

Together with AWS Managed Blockchain and Appinventiv as your app development partner, businesses can unlock a future where blockchain will take them to new heights of efficiency, security, and success.

Get in touch with our team today to get on the path of quick, effective AWS-managed blockchain implementation.

FAQs

Q. How to use Amazon-managed blockchain?

A. Using Amazon-managed blockchain is a streamlined process designed for ease and efficiency. To get started, users can follow the below steps:

• Sign up for AWS
• Access the AWS management console
• Navigate
• Create a blockchain network
• Deploy smart contracts
• Monitor and secure the network
• Integrate with other AWS services

Q. What are the benefits of using blockchain solutions using Amazon Managed Blockchain?

A. Blockchain solutions using Amazon-managed blockchain offer many benefits, including enhanced security through decentralized and tamper-resistant ledgers, increased efficiency in data management and transactions, improved transparency, and streamlined collaboration among network participants. It is a robust choice for businesses seeking scalable, secure, and innovative blockchain solutions.

Q. How does AWS-managed blockchain ensure data integrity and security in blockchain applications?

A. AWS-managed blockchain ensures data integrity and security by leveraging the decentralized and tamper-resistant nature of blockchain. Through features like consensus mechanisms and cryptographic techniques, it protects the immutability of transaction records, providing a secure foundation for building transparent and secure blockchain applications.

At the forefront of this technological renaissance, permissioned blockchain emerges as a revolutionary approach. The benefits of permissioned blockchains lie not just in the promise of efficient operations and heightened security but also in the transformative shift toward a collaborative ecosystem.

Imagine a digital scenario where trust is not just earned but ingrained, where security is not just an application but a proactive shield, and where collaboration is not a lofty goal but an inherent advantage. Permissioned blockchains emerge as the architects of this vision, reshaping how enterprises conduct their affairs in an ever-evolving and digitally charged world.

Let’s delve deeper to understand the multifarious benefits of permissioned blockchains for businesses. Before we embark on the journey through the advantages, let’s first understand what is permissioned blockchain.

Understanding Permissioned Blockchains

Permissioned blockchain, a subset of blockchain, is a distributed ledger technology (DLC) that is not open to the public and needs ‘permission’ to access. The heightened level of security and access control ensures that only users with permission can execute specified actions.

Additionally, participants are required to digitally identify themselves or provide certificates. This meticulous control mechanism allows the blockchain to record and maintain a comprehensive ledger of all individuals involved in the transactions transpiring on the network.

This controlled access, governed by predefined rules, imparts a level of security and privacy that makes permissioned blockchains highly valuable for modern enterprises.

In this blockchain, a group of trusted individuals works together to maintain and validate the transactions. This collaborative effort involves deciding the network’s rules and governance, encompassing crucial aspects like member selection, transaction verification, and the execution of smart contracts. Consequently, permissioned blockchains provide heightened privacy, enhanced efficiency, and increased scalability.

Private vs. Permissioned vs. Permissionless Blockchains

As we dig deeper to explore the advantages and challenges of permissioned blockchains for businesses, it is essential to know the key attributes of permissioned blockchains that set them apart from their permissionless counterparts and private blockchains.

Here’s a concise table highlighting the differences between private, permissioned, and permissionless blockchains.

Why Permissioned Blockchains are Ideal for Business Applications

Permissioned blockchains offer several benefits that make them highly preferable for various business and enterprise applications. To help you gain a better understanding of its endless advantages, we have categorized them under three core sections: efficiency, security, and collaboration. Let’s explore each category of advantages in detail:

Efficiency in Business Operations

Reduced Transaction Costs

One of the most remarkable benefits of permissioned blockchain, enticing businesses across industries, is the promise of reduced transaction costs. By eliminating intermediaries, these blockchains pave the way for more direct, cost-effective transactions. The automation of processes further streamlines operations, offering a glimpse into a future where business transactions are secure and swift.

Faster Transaction Processing

Real-time settlement becomes a reality with permissioned blockchains. It eliminates traditional delays associated with intermediary verifications, allowing seamless, instantaneous transaction processing. This advances operational processes and positions businesses to respond quickly to changing market needs.

Custom Governance Structure

Permissioned blockchains are characterized by a well-defined governance structure, ensuring a more organized system. It allows organizations to choose consensus mechanisms that align with their specific needs, balancing decentralization and control.

Enhanced Security Measures

Access Control and Identity Management

Security is at the heart of permissioned blockchains. With heightened access control mechanisms and identity management protocols, this subset of blockchain ensures that only authorized members can access and act in the network. Role-based permissions and multi-level authentication add additional layers of security, preventing potential threats.

Data Encryption and Privacy

The secure transmission of data and protection against unauthorized access are the prime concerns for businesses in the digital age. Permissioned blockchains address these concerns through robust data encryption, protecting sensitive information against cyber threats or data breaches. The result is a private and trusted environment for secure business transactions.

Immutability and Auditability

Tamper-resistant record-keeping is one of the most significant benefits of permissioned blockchain for businesses. It means no one can alter, edit, or delete the data or transaction records stored in these blockchains. The immutability of transactions ensures an invulnerable audit trail, promoting transparency and accountability.

Collaboration and Interoperability

Fortified Partnerships

Permissioned blockchain is a promising solution for lasting collaboration and partnerships, providing a trusted, transparent, and secure way for numerous parties to interact and transact securely without any intermediaries.

Facilitating Trust Among Participants

Trust is the cornerstone of successful business partnerships, and permissioned blockchains provide a technological framework that fosters just that. By establishing a secure and transparent environment, these blockchains facilitate trust among participants, paving the way for collaborative ventures.

Interoperability with Existing Systems

The integration of permissioned blockchains with existing systems is a testament to their adaptability. Businesses need not overhaul their existing infrastructure as these blockchains can seamlessly integrate with legacy systems, ensuring a smooth data exchange between partners.

Also Read: What is Blockchain-as-a-Service & its Business Benefits?

Challenges in Adopting Permissioned Blockchains

While the business benefits of permissioned blockchains are compelling, they also have some drawbacks. Here is a list of permissioned blockchain challenges businesses may encounter on this transformative journey.

Security Considerations

When it comes to data security, both public and private blockchains provide better protection as all the participating nodes work together to agree on what’s recorded on the blockchain. The security of permissioned blockchains largely depends on its members’ integrity. This suggests that even a small group of authorized users could collaborate to alter stored data, risking the integrity of the system.

To avoid this, it is crucial to set up the system in a way that stops any bad factors from teaming up and causing trouble.

Regulatory Challenges

Understanding and complying with industry regulations is already a complex endeavor for businesses, and when it comes to using permissioned blockchains, things become even more challenging.

Hence, businesses must match their adoption of permissioned blockchains with the ever-changing rules and guidelines set by regulators. This careful approach is crucial to ensure the seamless integration of these blockchains into the operations.

Scalability Concerns

As businesses grow and transaction volumes increase, scalability becomes a critical consideration. To resolve it, businesses must ensure that the infrastructure can support the expanding needs of the network to succeed in the long run.

You may like reading: 10 Ways to Embrace Blockchain for Business Transformation

Examples of Permissioned Blockchain Platforms

Quorum, Corda, and  Hyperledger Fabric are some of the most common examples of private permissioned blockchain platforms. Each of these platforms has its own characteristics, tailored to suit the specific business requirements. Let’s look briefly into each of these platforms:

Quorum

Quorum is an open-source enterprise blockchain platform developed by JPMorgan Chase. It is built on the Ethereum blockchain but includes modifications to address the specific needs of businesses, particularly in the finance sector.

Corda

Corda is an open-source blockchain platform developed by R3. It is specifically designed to be used in finance and other industries where privacy, scalability, and interoperability are essential.

Hyperledger Fabric

Hyperledger Fabric is a modular, permissioned blockchain platform hosted by the Linux Foundation. It is a part of the Hyperledger project and is designed for developing enterprise-grade applications in various industries.

Characteristics of Permissioned Blockchains

Permissioned blockchains, sometimes also referred to as private or consortium blockchains, possess distinct characteristics that differentiate them from permissionless blockchains. Here are the key features of permissioned blockchains:

Access Control

Participation in the network is limited to the users with permission. Users often need to meet certain criteria or authentication processes to join the network, ensuring a controlled and trusted environment.

Centralized Governance

In permissioned blockchain platforms, private entities or organizations control decision-making processes. This centralization allows for faster consensus and development.

Identity Management

Users who participate in the network must have verified identities. It ensures that only known and trusted entities can act in the consensus and validation processes.

Data Privacy

Permissioned blockchains allow for selective data visibility, ensuring that the information is only accessible to only authorized participants. This feature is highly valuable in healthcare and finance industries, where data privacy is paramount.

Immutability

Permissioned blockchains maintain the immutability of records. Once a block is added to the chain, it is nearly impossible to alter previous transactions, enabling easy traceability of transactions.

Flexibility and Scalability

Permissioned blockchains can be customized to suit specific business needs. This flexibility allows organizations to design blockchain solutions that align with their particular requirements.

Use Cases of Permissioned Blockchains across Industries

Based on the features and characteristics of permissioned blockchains, there are several industry use cases that make them preferable for businesses of all sizes.

Finance and Banking

In the financial sector, where security and efficiency are paramount, the use cases of permissioned blockchains are paramount. From streamlined cross-border transactions to secure trade settlements, financial institutions leverage the security benefits of permissioned blockchains to fortify their operations.

Related Article: Blockchain in Fintech: A Catalyst for Disruption in Finance World

Healthcare

Healthcare is witnessing the transformative power of permissioned blockchains, especially in the context of compliance with regulations such as HIPAA (Health Insurance Portability and Accountability Act). This innovation is instrumental in building robust Electronic Health Record (EHR) platforms, securing sensitive patient data, and navigating the complexities of the healthcare ecosystem. The features of data integrity, secure patient records, tractility, and interoperability have emerged as a game changer for medical and pharmaceutical companies.

Related Article: Will Blockchain Revolutionize Healthcare? The Truth or A Hype

Supply Chain Management

Supply chains, with their intricate processes and various stakeholders, embrace permissioned blockchains to optimize operations. They help automate processes, manage inventory levels, and enhance supply chain visibility. From tracing the location of goods to reducing the risk of fraud, the potential of these blockchains is reshaping the future of supply chain management, ensuring authenticity and compliance with regulations.

Get an in-depth view of How is Blockchain Disrupting Supply Chain Management

Government Sector

One of the most significant applications of permissioned blockchains is the creation of secure and transparent electronic voting systems, thereby minimizing the risk of fraud. Furthermore, governments can harness blockchains for identity verification, elevating security measures in the issuance of passports and control areas at national borders.

Education

Educational institutions find permissioned blockchains highly valuable to verify and share academic credentials. This application helps mitigate fraud in the hiring process, providing a reliable and transparent medium for validating individuals’ educational qualifications.

To leverage the maximum potential of permissioned blockchain in education, read its top use cases and potential pitfalls

The Future of Permissioned Blockchains

The future of permissioned blockchains for businesses is highly promising and holds immense possibilities. As businesses embrace the era of digital transformation, the integration of permissioned blockchains with other emerging technologies like artificial intelligence (AI) and the Internet of Things (IoT) will become a strategic imperative.

This synergy of technologies will unlock new trends, promising a future where smart contracts, decentralized applications, and enhanced automation will be on the horizon. It will shape a future where businesses can harness the full potential of a connected, secure, and intelligent ecosystem.

Enter the World of Permissioned Blockchain with Appinventiv

As we enter the dynamic landscape of blockchain, exploring the realms of permissioned blockchains has been rewarding. In this exciting journey, Appinventiv stands by your side as a trusted tech partner, widening the scope of possibilities.

With a wealth of experience in blockchain, we don’t just understand the pulse of innovations but also provide technical solutions, bridging the gap between idea and implementation.

Our team of 1200+ tech evangelists has delivered 3000+ successful projects for businesses across industries, empowering them to adapt and thrive in the evolving digital age.

Partner with us to leverage our next-gen permissioned blockchain software development services and see your business thrive in the digital paradigms.

FAQs

Q. What are the different types of blockchains?

A. There are primarily three types of blockchains: public blockchains, private blockchains, and consortium/permissioned blockchains. Each type serves different purposes and caters to distinct use cases.

Q. What are permissioned blockchains?

A. Permissioned blockchains are the most preferred type of blockchain for businesses looking to add an additional layer of security, permission management features, and identity maintenance. While they are not as popular as private or public blockchains, they are often the middle way between private and public infrastructure.

Q. What is Ethereum permissioned blockchain?

A. Ethereum is traditionally known for its public and permissionless blockchain, where anyone can participate, validate transactions, and deploy smart contracts. However, there have been efforts to adapt Ethereum for permissioned use cases, leading to the development of frameworks and solutions that incorporate permissioned features. One notable example of an Ethereum-permitted blockchain is Quorum, which is an open-source blockchain platform.

So, Ethereum permissioned blockchains bring the familiarity and robustness of the Ethereum platform to enterprise settings. These solutions help bridge the gap between the decentralized nature of public blockchains and the specific requirements of businesses operating in a permissioned environment.

But with great promise comes great responsibility, and the increasing popularity of digital investments has raised significant security concerns. It is safe to say that dealing with digital assets and safeguarding your hard-earned money is one’s top priority. Thus, enters the hero of the story – the private blockchain.

A private blockchain is a decentralized distributed ledger operated by a single entity or a group of participants that can control access to the network. It has the power to determine who can view and create data on the blockchain, ensuring higher privacy and control compared to public blockchains. More details on the subject will be discussed later in the blog.

Well, these private blockchains are gaining instant popularity among businesses, all thanks to their capability to provide a solution for data security, copyright violation and infringement, streamlined operations, and improved transparency. These decentralized ledgers offer numerous benefits, allowing organizations to leverage blockchain technology while controlling their data and access. Furthermore, they provide enhanced security, privacy, efficiency, and cost savings, making them a valuable tool for driving innovation and unlocking new business opportunities.

The private blockchain is like a strong entity that provides top-notch security and control. It creates a safe space for digital assets with encrypted walls and limited access. You can create a private blockchain and personalize it according to your requirements while ensuring maximum protection for your investment and data.

According to the MarketsandMarkets report, the overall blockchain technology market size was valued at $7.4 billion in 2022 and is expected to reach $94 billion by 2027, witnessing a CAGR of 66.2% from 2022 to 2027. The increasing market share can be attributed to businesses’ increasing adoption of blockchain solutions for applications such as payments, smart contracts, documentation, digital identities, and more. As per the reports, the most popular sector for investment in the blockchain ecosystem was Web3, followed by DeFi.

This blog will help you understand the nitty-gritty of how to create a private blockchain, its benefits for the business, and its multiple use cases. So, let’s explore the world of private blockchain in detail and discover what advantages it can bring to your business.

But before diving into all the details, let us shed a brief light on what exactly is a private blockchain and how it works.

What is a Private Blockchain?

A private blockchain is a decentralized and distributed digital ledger that operates within a restricted ecosystem, accessible only to trusted participants. Unlike public blockchains, private blockchains offer a more exclusive and secure environment, ideal for businesses and organizations seeking confidentiality and control over their data.

In a private blockchain for businesses, access to the network is confidential, and all the participants must be granted explicit authorization to contribute to it. This access control safeguards sensitive information from unauthorized access and manipulation from external malware practices and thefts.

Private blockchains are widely used in industries prioritizing data privacy and security, including finance, healthcare, supply chain management, and government sectors. For instance, financial institutions employ private blockchains to enable secure and efficient cross-border transactions among authorized parties, improving operational efficiency while complying with regulations.

How to Build a Private Blockchain Platform?

Creating a private blockchain is a sure-shot way of offering businesses and organizations a secure and efficient way to manage their private data and transactions. Here is the stepwise process to build a private blockchain. It is essential to understand that partnering with a blockchain development firm can help you put things into perspective while making way for optimized resource management.

Define the Purpose

This step of private blockchain development involves determining the specific use case and objectives. This allows the development team to tailor the blockchain solution per your unique business requirements and effectively comprehend the intended application’s challenges.

Select the Consensus Algorithm

During this stage, the private blockchain developers choose a consensus algorithm suitable for your requirements, such as Proof of Authority (PoA), Practical Byzantine Fault Tolerance (PBFT), or Delegated Proof of Stake (DPoS).

Set Up the Network

A permissioned network will be established in this phase with authorized participants who will serve as nodes and validate transactions.

Choose the Blockchain Platform

In order to create a private blockchain solution, this crucial step includes choosing a suitable blockchain platform like Hyperledger Fabric, Corda, or Quorum that aligns with your business needs and offers the desired features.

Design the Smart Contracts

After choosing the desired blockchain platform, it is now time to create and deploy smart contracts that will automate agreements and processes within the private blockchain network.

Implement Data Encryption and Test the Blockchain

Strong encryption is crucial for safeguarding data in transit and at rest, ensuring the integrity and privacy of information. Furthermore, conducting audits to test the blockchain network for vulnerabilities is essential while ensuring proper functionality and compliance.

Deploy and Maintain the Network

During this stage of private blockchain development, the private blockchain network will be deployed and protocols will be established for ongoing maintenance, updates, and backup procedures.

How do Private Blockchains Operate?

Private blockchains usually act as decentralized and distributed digital ledgers, just as public blockchains do. However, they are limited to a specific group of authorized participants and are not open to the public. Only a certain group of participants are given permission to access and contribute to the blockchain network.

Private blockchains utilize an access control mechanism to restrict participation in the consensus process to trusted entities. This mechanism validates transactions and adds them to the blockchain, thereby enhancing overall security and privacy. As a result, private blockchains are particularly well-suited for industries that require protecting sensitive data from public access.

Private blockchains for businesses utilize a consensus algorithm to ensure agreement among authorized nodes regarding transaction validity and order, resulting in streamlined and efficient consensus processes. This leads to faster transaction confirmation times and increased data processing throughput compared to public blockchains.

By offering a permissioned network, faster transaction processing, and customizable governance, private blockchains enable enterprises in diverse industries to leverage distributed ledger technology while safeguarding sensitive information.

Advantages of Private Blockchain Development for Businesses

By leveraging private blockchain technology, businesses can enhance data security, privacy, and collaboration while facilitating scalability. Let us look at the multiple benefits offered by private blockchain development for businesses:

Enhanced Security

Private blockchains provide enhanced security compared to public blockchains by limiting participation to authorized entities, thereby minimizing the risk of unauthorized access, data tampering, and malicious activities. These blockchains use permissioned networks that make the participants undergo verification and validation, thereby establishing high trust within the network. Private blockchains are ideal solutions for safeguarding sensitive information considering their use of various cryptographic techniques like digital signatures, capable of ensuring data integrity.

Cost Savings and Boosted Efficiency

One of the most sought-after advantages of private blockchain is cost savings. Private blockchains simplify business operations by removing intermediaries and automating trust. This makes transactions faster, reduces mistakes, and minimizes delays. It also helps optimize cost by cutting out intermediary fees and time-consuming processes. These benefits are especially important in industries like supply chain management and finance, where accuracy and speed are paramount.

Increased Transparency

A shared ledger is created by private blockchains that cannot be tampered with. Furthermore, the transactions are time-stamped and linked to create an unchangeable record. This transparency ensures that everyone on the network has the same information, reducing the chance of disagreements. In industries like healthcare and finance, private blockchains make it easier to follow regulations and undergo audits, which builds trust and ensures compliance.

Enhanced Data Privacy

One of the most sought-after benefits of private blockchain development is enhanced data privacy. Enterprise Private blockchains offer selective disclosure, allowing blockchain development companies and other companies to choose what information to share with specific participants while maintaining confidentiality. This level of privacy ensures that sensitive information is only shared with authorized parties, reducing the risk of unauthorized access or data breaches. This allows organizations to mitigate concerns about data misuse and ensure compliance with privacy regulations like GDPR or HIPAA.

Streamlined Collaboration

Private blockchains facilitate secure and efficient collaboration by offering organizations a trusted and shared infrastructure for data exchange. They allow businesses to create a secure network of trusted participants that removes the need for intermediaries. Furthermore, real-time tracking of transactions builds trust among stakeholders and improves collaboration.

Scalability and Customization

Private blockchains provide scalability and flexibility to meet the expanding requirements of businesses. These blockchains are optimized for handling high transaction volumes, ensuring business performance is not compromised. Companies can customize and implement smart contracts tailored to their operations, improving operational efficiency. Furthermore, the seamless integration with existing systems facilitates a smooth transition to blockchain technology without disrupting ongoing operations.

Examples of Private Blockchain

Many examples highlight the uses of private blockchains across various industrial sectors. It provides secure and authorized access to trusted participants, enabling companies to improve data sharing, streamline operations, and build stakeholder trust. As blockchain technology evolves, more industries may explore and create a private blockchain to meet specific business needs and improve efficiency and security.

Hyperledger Fabric

Hyperledger Fabric is a prominent example of a private blockchain widely used for supply chain management. It allows businesses to securely share data and information, streamlining the complexities of supply chain operations.

For example, Walmart utilized Hyperledger Fabric private blockchain to increase food supply chain transparency. The private blockchain only allowed the authorized participants to securely access the shared data in a permissioned network, thereby ensuring accuracy and traceability. This implementation improved food safety and reduced tracking time from days to seconds. The transparency further facilitated the quick identification of contamination sources, enhancing supply chain efficiency and consumer trust.

Corda

Corda is another famous private blockchain example that has made it large in the industry. In the BFSI ecosystem, Corda is a notable private blockchain financial organizations use. They leverage Corda to securely and efficiently share sensitive financial information, making way for smoother transactions and improved collaboration within the industry.

Quorum

For financial transactions, Quorum has emerged as a popular permissioned private blockchain. Many large corporations use Quorum for its enhanced privacy and security features, making it an attractive alternative to traditional financial platforms.

Multiple Use Cases of Private Blockchain

Enterprise private blockchains have become a powerful solution for businesses seeking secure and efficient data management. These real-life examples demonstrate how private blockchain development can provide customized solutions to meet specific business needs and drive innovation in the digital age. Let us look at the private blockchain use cases in detail below:

Supply Chain Management

One of the most sought-after private blockchain applications is their capability to revolutionize supply chain operations for businesses. Private blockchains provide a secure and transparent platform that ensures the traceability of goods, effectively reducing instances of fraud and counterfeit products.

[Also Read: How is Blockchain Disrupting Supply Chain Management]

Financial Services

Private blockchains can streamline cross-border payments, facilitating secure data sharing among financial institutions and expediting the settlement process.

[Also Read: Blockchain in Fintech: A Catalyst for Disruption in Finance World]

Healthcare

Private blockchains play a crucial role in the secure sharing of patient data, thereby improving interoperability and ensuring compliance with data privacy regulations.

Intellectual Property Rights

Private blockchains play a crucial role in safeguarding copyrights and patents by providing a secure ownership and licensing management platform.

Identity Management

Identity management is another one of the famous  private blockchain applications that has helped businesses streamline their conducts. Private blockchains make way for a secure digital identity verification that can reduce identity theft and fraud in online transactions.

Real Estate

In real estate, private blockchains can enhance property transaction transparency and streamline transfers that can mitigate fraud and ensure efficient property management.

[Also Read: How Adoption of Blockchain in Real Estate Changing the Scenario?]

Insurance

In the insurance sector, private blockchains facilitate automated claims processing, improving data accuracy and fraud detection.

Best Practices for Using a Private Blockchain

To ensure the successful implementation and operation of private blockchains, many industry best practices are vital to implement. Let us look at them in detail:

Choose a Consensus Algorithm

When choosing an algorithm for nodes agreement, it is important to select the one as per your business requirements carefully. Some options to consider are Proof of Authority (PoA), Practical Byzantine Fault Tolerance (PBFT), and Delegated Proof of Stake (DPoS).

Use a Permissioned Network

One of the most sought-after practices to create a private blockchain is to use a permissioned network. To enhance security and scalability, ensuring that only authorized people with proper credentials can participate in the network is crucial.

Use Strong Encryption

To safeguard your blockchain against attackers, employ strong encryption techniques for data in transit and at rest. Additionally, adhere to secure key management protocols.

Ensure Network Resilience

We need to establish a strong network infrastructure that can handle potential disruptions. This includes implementing a well-defined disaster recovery plan, conducting regular backups, and having protocols to address possible attacks.

Use Smart Contracts

Self-executing smart contracts can be implemented to automate the execution of agreements, providing security and integrity for transactions.

Ensure Compliance

To maintain legal compliance in order to create a private blockchain, it is vital to adhere to associated laws and regulations, including anti-money laundering (AML) and know-your-customer (KYC) requirements.

Regularly Test and Audit

Frequent testing and audits are essential to ensure the proper functioning and security of the blockchain. It is recommended to conduct penetration testing, vulnerability scanning, and code audits before implementation.

Partner with a Dedicated Blockchain Development Firm

You should consider partnering with a specialized development firm like Appinventiv that offers private blockchain development services and has extensive experience building and deploying several projects. Our experts can create a private blockchain while addressing complex challenges and customizing them to meet your business requirements.

How Can Appinventiv Help You Build a Private Blockchain Network?

Private blockchain development offers a myriad of advantages to businesses. They enhance the overall security, efficiency, and privacy of data while facilitating collaboration and scalability. From protecting sensitive information to increasing transparency, private blockchain are the entities that can help you thrive in the digital age. Thus, evaluating your business needs and deciding if a private blockchain is the right solution to meet your goals and stay ahead of the competition is advisable.

Appinventiv is a dedicated private blockchain development company with years of expertise in the field. Our skilled blockchain developers can guide businesses through the entire process of creating a private blockchain, all the way from defining the purpose and use case to implementing and deploying the platform. Our customer-centric approach for blockchain development services ensures that the solution is tailored to meet each business’s specific needs and objectives. By prioritizing security and efficiency, we strive to utilize cutting-edge encryption techniques and consensus algorithms to create a robust and scalable network.

We recently collaborated on the blockchain-based Empire App, a mobile platform that offered guests a seamless and transparent hotel-booking experience. The immutability and transparency of the blockchain solved the double booking issue and eliminated third parties from the transactions.

Get in touch with our experts to build a private blockchain for your business venture now!

FAQs

Q. What is the difference between a private blockchain and a public blockchain?

A. Private blockchains are the digital ledgers that are restricted to a specific group of participants who have access to the network, providing businesses with more privacy and control. They are often used for internal purposes where sensitive data must be protected from public view, so they are more suitable for industries such as finance, healthcare and supply chain management. On the other hand, public blockchains are open to everyone, allowing anyone to participate, view and verify transactions, but with reduced privacy and control, making them suitable for decentralized applications and publicly available cryptocurrencies.

Q. How much does it cost to build an app on a private blockchain network?

A. The overall cost to create a private blockchain-based app can vary from $50,000 to $300,000. There are further several factors that can impact the overall cost of development such as the location of the hired app development firm, the overall complexity of the app, the consensus algorithm used, customization and security requirements, etc. Get in touch with blockchain developers to get cost estimates based on your custom business requirements.

Q. How can you secure your private blockchain?

A. Securing a private blockchain is essential to protect sensitive data and ensure the integrity of transactions. To achieve this, access control can be implemented to restrict the participation to a few limited participants, creating a permissioned network. Strong encryption techniques can be used to safeguard data during transmission and while stored on the blockchain. A robust consensus mechanism is chosen to ensure all authorized nodes agree on the validity of transactions.

In addition to these, regular security audits and vulnerability testing can be conducted to identify and address potential vulnerabilities in the network. Additionally, smart contracts that can automate agreements should be carefully designed and audited for potential weaknesses.

Fearing the efforts and costs that compliance-readiness brings, companies tend to avoid the process altogether, leading to a situation where both business cost and reputation comes at stake. Amidst these complexities, bringing and maintaining data on the blockchain gives clear benefits as they address the compliance requirements in an immutable and secure way.

In this article, we are going to dive into the role of blockchain in compliance and how the technology can help not just companies but also regulators in improving the compliance process.

The Possibilities of Blockchain for Regulatory Compliance

Blockchain has established itself as an immutable ledger which serves as a detailed record of access, change, and values. After the data gets entered on the blockchain, it cannot get amended, modified, or deleted. When these features get merged with the everyday business processes, businesses are able to prepare for their regulatory needs from the first stage of their product development or service origin.

On the other hand, navigating compliance with blockchain technology makes regulators’ lives easier as well. Blockchain’s shared architecture and security eliminates the need for manual oversight while streamlining the regulatory processes for the involved parties. By design, the blockchain architecture relieves regulators from the extensive processes of gathering, storing, reconciling, and aggregating the data themselves.

A working example of the merger of blockchain and compliance can be seen in regulatory reporting of transactions which consists of multiple parties like in case of reinsurance, the report covers insured, insurer, broker, and the regulator. Transactions handled between all these stakeholders can be complex in nature – an issue which blockchain can ease with its immutable ledger that can be viewed by all the parties, enabling them to meet the reporting obligations more speedily.

Strengthening the hold of blockchain for regulatory compliance, specially on the reporting end, the European Commission in 2017 started researching the application of blockchain to create a distributed record of financial reports across the EU, which can then be shared with the regulators and other interested stakeholders. While the project is still waiting for a time when GDPR laws will be replaced with complete decentralization, it has opened avenues for extensive hypothesis building.

The detailing of blockchain compliance often remains incomplete without looking at the blockchain solutions for regulatory compliance on a molecular level. Through its different facets that we will cover next, blockchain is disrupting the once traditional process to new digital and decentralized frontier.

Also Read- Compliance Management Software Development – Benefits, Use Cases, Process and Costs

The Different Dimensions of Blockchain Technology and Regulatory Compliance

Regulators and businesses alike are looking for more efficient ways to ease the complex compliance readiness process. And they are turning towards blockchain for this. Here are some ways blockchain for enterprises are now being incorporated on the regulatory compliance front.

1. Know Your Customers (KYC) and Anti Money Laundering (AML)

Companies should collect customer information before they initiate their journey together as a part of the KYC and AML processes.

Modern-day KYC systems tend to depend heavily on third-party verification tools for establishing user identity, which comes with a massive amount of security risks. In a decentralized world, with blockchain-based KYC, the data gathered can be compared with the current data, and smart contracts can get automatically executed and verified in real time.

2. Transaction Monitoring and Screening

The capability to scan and monitor users in real time helps in catching financial crimes as and when they are happening. The fact that blockchain and regulatory risk management enables these transaction tracking activities to run in real-time, helps the compliance team find red flags or suspicious activities.

Noting the rising adoption of virtual currencies in enterprises, blockchain is also being used to raise the security and speed of automated transaction monitoring, while offering better traceability and faster analysis.

3. Record Storage

The adoption of big data analytics in enterprises is on a rise. However, the problem with the technology is that it creates a lot of unstructured and underutilized data whose storing and retrieving can become challenging for operational and audit uses.

Blockchain and regulatory risk management combination enables companies to access updated information, irrespective of the format and even secure the information in real time. As a result, a quick access to necessary data to complete the regulation and compliance processes can be provided.

4. Fraud Prevention

While regulation is often associated with data storage and user identities, it also plays a critical part in helping prevent fraud.

On that end, blockchain for enterprises are used to create encrypted data blocks to prevent hackers from viewing and accessing sensitive business data. Blockchain regulatory compliance calls for exact data matches from one block to another, meaning the hackers will have to do the impossible task of configuring their systems in a way that it receives alerts when the synthetic artifacts are employed for transactions and account creation.

The four use cases of navigating compliance with blockchain technology are only surface-level exploration of how far the technology can go in the regulation space. Understanding the depth of the application is still underway and Appinventiv is a part of that journey. We are helping enterprises, across domains, eliminate the implications of non-compliance by integrating blockchain with technologies like AI and IoT into the regulation preparedness journey.

We recently worked on a pilot project where a mHealth app was being prepared for regulation compliances. As part of the proof of concept creation process, we worked around several challenges and their experiment-based solutions.

Here’s a brief of those regulatory challenges for enterprises that we found a workaround for.

Scalability – Blockchain faces the inability to process multiple transactions at a reasonable rate. Now while this is a good thing as it lowers the chances of malicious conduct, the time it takes to perform transactions increases. To solve this, our enterprise blockchain consultants apply a range of techniques like lightning the network, sharding, and applying proof-of-stake consensus algorithm.

Storage – Blockchain regulatory compliance processes like app appraisal, incident reporting, and pre-certification creates a lot of data in the form of images or files. All of this leads to a situation where the blockchain network runs out of storage space. To tackle this, we looked at decentralized storage systems like Filecoin and IPFS which generate the permanent hashes of the stored data.

Privacy – Ensuring patients’ data anonymity is key to regulating the medical apps. With blockchain, all the participating parties are able to see the transactions on a public blockchain and the public address of the parties can be used to identify them. Now while all the data is encrypted when you follow blockchain regulatory compliances, hackers with some information around patients’ medical histories can create a link between users’ real identity and their public address. We found a solution to this by investing in a more controlled environment, which platforms like Besu or Hyperledger Fabric offer as a part of our blockchain development services.

So here are some ways we are solving regulatory challenges for enterprises and blockchain by working with businesses that are ready to take the leap towards digitalization by investing in next-gen technologies. If you too are looking for ways to incorporate blockchain for enterprises, get in touch with us today.

FAQs

Q. How can blockchain technology help enterprises ensure compliance?

A. Blockchain aids businesses in becoming compliance-ready by bringing all the data on an immutable ledger, from where the regulators can view the transaction history and trace if the laws have been followed. The fact that the data that goes into the blockchain network is impossible to modify, the regulators can be rest assured that they won’t have to perform the manual inspection tasks.

Q. What are the benefits of leveraging blockchain in compliance processes?

A. Blockchain offers a range of benefits to enterprises when they opt for the technology for their compliance process – easy KYC/AML, fraud prevention, immutable data storage, and real-time transaction monitoring.

The aftermath of the COVID-19 pandemic has made healthcare providers dependent on technology to manage healthcare supply chains, patient data, and insurance claims. Managing data in the healthcare industry is complicated and involves many organizations providing important services every day. If data management isn’t done properly and the Protected Health Information (PHI) is not handled as per HIPAA compliance,  the supply chain can be disrupted drastically, which is bound to have adverse and long-term effects on the efficacy and security of patient data in the healthcare sector.

This is where blockchain in the medical supply chain comes in. Blockchain-based solutions prove highly effective in the healthcare sector by providing secure retrieval and storage of data, leading to improved data integrity and streamlined medical conduct. These solutions ensure data provenance, promote authenticity in meeting the demands of the healthcare sector and guarantee the immutability of multi-directional transactions.

According to Gartner, in the upcoming years, more than 40% of the Chief Supply Chain Officers (CSCOs) will integrate a real-time supply chain data exchange solution, such as an application programming interface (API) or blockchain technology. This will be strategically done to enhance the efficiency and effectiveness of their supply chain operations.

Furthermore, blockchain technology in the pharma and medical sector is expected to witness a market size of $815.65 million in 2026, witnessing a CAGR of 22.10% from 2023-2030. Thus, now is the right time to invest in the technology if you wish to improve your supply chain management, increase the overall business efficacy, enhance traceability and transparency.

This article will help you discover everything related to blockchain in the healthcare supply chain. In addition to looking at the benefits of blockchain-based medical supply chain software, we will also help you understand how medical supply chain businesses can leverage blockchain for streamlining their business.

So, without further ado, let’s start by understanding the significance of blockchain for the healthcare supply chain.

Significance of Blockchain in the Healthcare Supply Chain Industry

Blockchain technology has emerged as a promising solution to all the challenges the modern-day healthcare supply chain faces. By tackling critical issues and enhancing various aspects of the system, blockchain in healthcare has the potential to revolutionize the way we manage supply chains. Let us explain the role of blockchain in the medical supply chain in detail below:

Firstly, blockchain technology provides an advanced solution for improving traceability and provenance within the healthcare industry. Utilizing a decentralized and transparent ledger, the use of blockchain for the healthcare supply chain facilitates the comprehensive recording and tracking of each transaction and movement of healthcare products from manufacturers to end-users.

This process establishes a reliable record that affirms the product’s authenticity, quality, and integrity. Consequently, the implementation of blockchain in the healthcare supply chain serves as a crucial tool in addressing the issues related to counterfeit or substandard healthcare products, thereby working towards a single objective of ensuring patient safety.

Secondly, blockchain technology can strengthen supply chain integrity considering its distributed and tamper-resistant nature. The decentralized essence of blockchain ensures that data cannot be modified or tampered with without any proper user authorization. By leveraging blockchain’s immutable ledger to record transactions, healthcare organizations can establish a robust system for effectively tracking and managing products, thereby mitigating the risks associated with fraud or data manipulation.

Furthermore, blockchain technology in the healthcare supply chain contributes to improved efficiency and cost reduction within the healthcare industry. Through automation and streamlining of critical processes like inventory management, procurement, and logistics, using blockchain for healthcare supply chain eliminates the need for cumbersome manual paperwork and reduces the administrative overheads. By optimizing the utilization of resources, blockchain enhances operational efficiency, eventually leading to substantial cost savings.

These efficiency gains and cost reductions make way for improved patient care, as healthcare organizations can allocate resources more effectively and redirect saved funds toward patient-centric initiatives and services.

Blockchain-Based Medical Supply Chain Software Features

Blockchain-based medical supply chain management software offers several characteristics that can increase the healthcare sector’s overall efficiency and security. These qualities include, among others:

Immutability

The blockchain-based medical supply chain management system’s immutability is crucial. Data cannot be altered after it has been stored on the blockchain. By ensuring that the data is secure, accurate, and dependable, this feature lowers the possibility of data breaches or manipulation.

Transaction History

All stakeholders may see the whole transaction history of any drug or medical device in the blockchain-based medical supply chain, which promotes transparency. This transparency keeps the supply chain free from fraud, waste, and corruption. Additionally, it enhances accountability throughout the supply chain and enables patients to confirm the legitimacy of the products they receive.

Smart Contracts

Built on the blockchain, smart contracts are self-executing contracts. Furthermore, they are based on predetermined criteria and can automate the execution of specific tasks, such as payments or product shipments. Smart contracts can be used in the medical supply chain to automate a number of processes, including confirming the legitimacy of items and guaranteeing compliance with legal standards.

Tracking

One of the major features of blockchain in the medical supply chain software is easy tracking. The location and status of the product are recorded on the blockchain as it passes through the supply chain. This tracking ensures transparency and accountability, which enables all stakeholders to see the whole transaction history of any drug or medical device.

Regulatory Compliance

Regulatory compliance is guaranteed by the blockchain-based medical supply chain, which complies with rules, including the FDA’s track-and-trace standards. These compliances such as Health Insurance Portability and Accountability Act (HIPAA), General Data Protection Regulation (GDPR), etc., enables the healthcare sector to fulfill its legal obligations and safeguard the public from fake or subpar pharmaceuticals and medical equipment.

[Also Read: How to Develop a HIPAA-Compliant Mobile Application]

Patient Verification

Blockchain in the medical supply chain can be used for identifying patient records as well. When the product is delivered, they can look up its whole transaction history on the blockchain. This openness increases patient safety and faith in the healthcare system by enabling the patient to confirm the product’s authenticity and regulatory compliance.

Record Keeping

The procedure begins with the maker of medications or medical equipment, who enters the product’s information on the blockchain, including its composition, expiration date, and batch number. The other nodes on the network then verify and save this record, ensuring the data’s security and accuracy.

Uncovering the Blockchain in Medical Supply Chain Benefits

From increased transparency to improved traceability blockchain can revolutionize healthcare logistics, thereby ensuring patient safety and operational efficiency. Let us look at multiple benefits of blockchain in the medical supply chain in detail:

Decentralization: The decentralized nature of blockchain-based medical supply chain management is one of its most important advantages. The blockchain distributes supply chain management over a network of nodes rather than relying on a single central authority. This decentralized method boosts security, lowers the possibility of fraud or manipulation, and ensures the supply chain keeps running even if one or more nodes malfunction.

Greater Security: Enhanced security is one of the most sought-after benefits of blockchain in the medical supply chain that has led to the increased adoption of the blockchain-based software. The medical supply chain’s record is made tamper-proof and secure using blockchain technology, which reduces the concerns of fraud, forgeries, and other illegal behavior. By adopting blockchain-based supply chain management, medical product producers, distributors, and patients can have more confidence in the dependability and quality of medical goods.

Enhanced Efficiency: The implementation of blockchain in the healthcare supply chain management system can automate a number of processes, including documenting transactions, monitoring product movement, and confirming regulatory compliance. The supply chain can become more efficient thanks to this automation, which can also save time and money.

Better Transparency: All stakeholders may examine the whole transaction history of any drug or medical device in the blockchain-based medical supply chain, which improves transparency. By increasing accountability and lowering the possibility of fraud, this transparency also ensures that the supply chain runs smoothly.

Increased Patient Safety: Blockchain-based medical supply chain management can increase patient safety by enhancing medical items’ authenticity, accuracy, and security. Patients can confirm the legitimacy and conformity of the items they get, lowering the possibility of negative side effects or other harm.

Improved Data Privacy: Because the blockchain is decentralized, there is less chance of data breaches or cyberattacks because sensitive data is not kept in a single area. Additionally, using encryption and other security measures ensures the protection of patient data from unauthorized access.

[Also Read: How does blockchain resolve data privacy and security issues for businesses?]

Enhanced Trust: The medical supply chain’s stakeholders can have mutual trust amongst each other, thanks to the adoption of blockchain. Blockchain-based medical supply chain management can promote confidence among producers, distributors, regulators, and patients by offering a safe, open, and effective system.

Real-World Examples of Organizations Using Blockchain for Managing their medical Supply Chain

Companies at the forefront of adopting blockchain technology are demonstrating the vast potential it holds. By implementing the right blockchain in medical supply chain solutions, these organizations have increased their overall accountability and transparency and have established a highly efficient and precise supply chain across various industries.

Here are the few organizations that have implemented blockchain in their medical supply chain solutions:

1. DHL

DHL, the world-famous logistics organization, has launched a new prototype that utilizes blockchain technology to improve pharmaceutical supply chains. This software allows them to track and authenticate their pharmaceutical products, which helps to reduce the risk of counterfeit drugs infiltrating the supply chain.

2. Blockpharma

Blockpharma, a French startup, is combating counterfeit drugs through the use of blockchain in its medical supply chain. Their innovative solution enables consumers to easily scan unique QR codes on drug packages, thereby verifying the authenticity of the products and ensuring they remain untampered.

3. Walmart

Walmart is currently implementing a pilot project based on blockchain technology to monitor and trace food products within its supply chain. This initiative holds potential implications for medical supplies as well. By harnessing the power of blockchain, the project can enhance transparency, traceability, and overall efficiency throughout the supply chain. The primary objectives of implementing the distributed ledger include strengthening food safety measures and improving quality control mechanisms.

4. Mediledger

The Mediledger Project is a collaboration between world-famous pharmaceutical manufacturers such as Pfizer, Genentech, and AmerisourceBergen. The project is using blockchain technology to enhance the efficiency and security of the drug supply chain. It enables real-time tracking of medicines and works towards diminishing the likelihood of counterfeit products.

Blockchain-Based Medical Supply Chain Software Development Process

To ensure that the blockchain-based healthcare supply chain management software meets the custom needs of the healthcare industry, is in compliance with regulatory requirements, and seamlessly integrates with existing systems, it is important to hire a reputed blockchain and healthcare software development company like Appinventiv with years of expertise in the same. Here is an overview of the typical development process we follow:

Requirement Gathering:

Collaborating with stakeholders, such as healthcare providers, manufacturers, distributors, and regulatory authorities, the initial stage is to gather thorough requirements. The scope and functionality of the project will be more clearly defined after we are aware of their unique requirements and difficulties.

Design and Architecture:

The design and architecture of the software are created based on the requirements. Choosing the right blockchain platform (like Ethereum, Hyperledger, or Polygon), choosing the consensus method, creating the data model, and organizing the smart contracts and user interfaces are all necessary.

Development of Smart Contracts:

The essential elements of blockchain software are smart contracts. They specify the laws, reasoning, and automation governing supply chain transactions. During the blockchain-based medical supply chain software development process, smart contracts are created and deployed by seasoned blockchain engineers to control various processes such as product verification, inventory control, and payment settlements.

APIs and Integration:

Blockchain-based software must communicate with pre-existing systems, including inventory management software, ERP systems, and EHR systems. Application programming interfaces (APIs) are developed to enable frictionless data sharing and interoperability between the blockchain software and numerous external systems.

Testing and Quality Assurance:

Strict testing and quality assurance is carried out to guarantee the software’s functionality, security, and dependability. This covers end-to-end testing of the complete supply chain process, unit testing of smart contracts, and integration testing of system elements. Security audits and vulnerability assessments are performed to identify and address potential risks.

Deployment and Network Setup:

The program is installed on the selected blockchain platform, and the required network infrastructure is set up. This entails setting up nodes, configuring network settings, and assuring the blockchain network’s connectivity and accessibility to authorized participants.

Ongoing Maintenance and Upgrades:

The last step involved in the medical supply chain management software development process is offering proper post-deployment maintenance and upgrades to the software. To keep the software secure, up-to-date and compliant with shifting regulatory requirements, regular maintenance and updates are necessary. User comments and changing industry standards are used to guide ongoing monitoring and improvements.

Understanding the Medical Supply Chain Software Development Cost

To give you a brief idea, the blockchain-based medical supply chain software development cost can vary from around $40,000 to $200,000, depending on several features. For instance, the overall complexity of the software is the most vital factor that impacts the overall development budget. Simply put, highly complex software with an extensive feature list will cost you more than simple software with minimal features.

To gain a competitive business edge, it is vital to understand that full-fledged software with modern features capable of enhancing the overall productivity of the medical supply chain is rather the need of the hour.

Other vital factors that impact the cost to build blockchain-based medical supply chain software, includes:

• UI/UX design of the software
• The location of the software development agency
• The tech stack used for implementing the software
• The coding process
• The team size of the hired development agency
• Quality assurance
• Maintenance and upgrades

How Can Appinventiv Help You Gain Medical Supply Chain Supremacy?

The main objective of blockchain in the medical supply chain is to ensure the continuous availability of essential medical resources such as drugs, medical equipment, and healthcare services. An effective digitally transformed supply chain must efficiently manage the connections between suppliers and customers to achieve optimal customer satisfaction while maintaining cost efficiency. This entails procuring resources, effectively managing supplies, and delivering products and services to patients and healthcare professionals.

One significant benefit of these distributed systems is their ability to address challenges related to disclosure and accountability in scenarios where the interests of individuals and institutions may not align. Thus, blockchain technology offers a viable solution to enhance the overall accountability, transparency, confidentiality, efficiency, and reliability in medical supply chains.

A blockchain-based software development company like Appinventiv can play a pivotal role in ensuring your business’s efficient development of blockchain-based medical supply chain software. Our in-depth technical expertise of implementing blockchain in the healthcare supply chain enables us to design and implement a secure and scalable solution.

Our expert blockchain development solutions can enhance transparency, traceability, and efficiency in the healthcare supply chain. We conduct thorough requirement analysis, understand the specific business requirements, and tailor the custom software, keeping in mind the HIPAA compliance.

We can leverage AI and IoT in our blockchain for medical supply chain solutions, which further guarantees effective inventory management, streamline logistics, prevent infiltration of counterfeit products, enhances data security and improve the overall supply chain efficiency in the healthcare industry

We can implement robust smart contracts and encryption techniques to enhance the security and privacy of sensitive medical data. Our medical supply chain software development services further guarantees effective collaboration and project management, ensuring timely delivery and seamless integration of the software into existing systems.

Contact our experts to develop a blockchain-based medical supply chain management software capable of enhancing your business efficacy.

FAQs

Q. What are the benefits of using blockchain in the medical supply chain?

A. The implementation of blockchain technology in the medical supply chain offers a multitude of advantages. Firstly, it increases traceability and transparency by generating an unalterable record of every transaction and movement of medical products, guaranteeing authenticity and quality.

Secondly, blockchain fortifies supply chain integrity by preventing unauthorized modifications or data tampering, which mitigates the risk of fraudulent activity. Furthermore, it facilitates secure and efficient data sharing among stakeholders, ensuring precise and timely information exchange.

Q. How can blockchain enhance the efficiency of medical supply chain operations?

A. Blockchain technology offers several benefits to the medical supply chain industry. Blockchain can significantly reduce administrative overheads and optimize resource utilization by streamlining and automating processes such as inventory management, procurement, and logistics.

In addition to this, real-time tracking of products ensures efficient inventory management and reduction in overall wastage. Furthermore, another blockchain use in the healthcare supply chain is facilitating secure and instant information sharing among stakeholders, enabling faster decision-making and streamlined collaboration.

Q. What are the prospects for blockchain in the medical supply chain industry?

A. Blockchain technology holds great promise for the future of the medical supply chain industry. It can potentially transform the healthcare sector by addressing major data transparency, traceability, and security issues. By providing a decentralized ledger, blockchain in the pharma supply chain can securely track and verify the movement of medical products, preventing counterfeit drugs and ensuring authenticity.

Blockchain-based solutions powered by AI and IoT can enable interoperability and data exchange in the upcoming years, further improving supply chain operations.

Q. How much does it cost to develop a blockchain-based medical supply chain management software?

A. The cost of developing a blockchain-based medical supply chain management software can vary between $40,000 to $250,000. There are several factors that further impacts the overall development budget such as:

• Location of the software development firm
• The UI/UX design of the software
• The features and technology stack
• Post-deployment maintenance and upgrades

What is WEB 3.0?

Web 3.0 is an evolving version of the internet where users can view, write, and interact with content. To answer the question of what is Web 3.0, the brief answer is, it is the “read-write-execute” phase. It includes machine-to-machine communication and dynamic applications. This version connects decentralized data sources for a quicker and more individualized user experience. This is also where the metaverse is being built. 

In this version, computers can understand data similarly to humans and intelligently deliver relevant content following user requirements. Web 3 is a decentralized internet that uses blockchain technology to protect your data. Instead of computer giants dominating the platforms, it will give consumers ownership stakes in the platforms and applications. Artificial intelligence (AI), machine learning (ML), and the semantic web will all be used in Web 3 technology and enable the execution of this phase. Computer systems will benefit from the semantic web’s aid in comprehending and interpreting the context and meaning of the material. As a result, the end user receives the most relevant and precise result. Although platforms like Facebook and Twitter powered web 2.0, web 3.0 tech companies feature artificial intelligence services or DApps. These DApps run on cryptocurrency tokens, such as Web3 tokens.

Web 3.0 vs Web 2.0 – Which is better for your business?

Superficially, both web versions are similar as the latter is taken as the base, and the newer version is a step ahead. Having said that, the nature of your business will lead to the right version adoption of the web. Let us look at it in a comparative manner to analyze it better, which can help you make an informed decision.

User Interface

Web2 offers a dynamic user interface providing excellent user experience with real-time updation of the information. The information being shared is controlled by the tech giants. Web3, on the other hand, provides data control to the user making it more secure. However, as it is in the nascent stage, it might be slower than web2.

Ownership

This is the biggest change that Web3 has brought. The data in the web2 version is controlled by the centralized authority that helps provide a personalized user experience. The web3 version works on a decentralized principle offering complete control to the user.

Security & Privacy

All the web2 applications are, though, controlled by the centralized authority, and the owner decides the security protocols of the data. Whereas the web3 applications do not require your personal information making it secure and safe. The information is provided in the form of tokens. However, this does restrict the opportunity to scale and would require a lot of maneuvering in case you wish to scale your operations.

Technologies

Application development on web2 entails the tech stack with various databases and languages like JavaScript, Ajax, and many more. Web3 application development predominantly leverages AI, ML, Blockchain, etc.

Transparency

Based on the control of the data, the transparency level with web3 is automatically enhanced. Blockchain technology helps create immutable entries that are easily accessible to users. Searches for products and services can be made more direct with increased trust.

Operations

The operation on the web2 versions demands time and dedicated focus for streamlining the business operations. Web3 facilitates smart contracts enabling transaction ledger availability to everyone involved while providing real-time status and data.

Web 3.0 vs Web 2.0

Let’s compare and understand the difference between web 2.0 and web 3.0 based on specific criteria. Web 2.0 is primarily about read and write-level interactions. The web 2 vs web 3 comparison can be easily made by taking their distinct features and detailed impressions of the user experience they provide. For instance, you can see that web 3.0 places more of an emphasis on the semantic web. 

Definition

The first criterion is the meaning of the two web versions. The second generation of internet services, often known as Web 2.0, allows for read-and-write functionalities and is thus called the read-write phase. Web 3.0, on the other hand, encourages the development of smart applications by enabling them to use ML and AI characteristics. Web 3.0 applications that stand out include integrated gaming, 3D portals, and multi-user virtual environments. Web3 game development services cater to applications that stand out, including those with integrated gaming, 3D portals, and multi-user virtual environments.

Focus:

The following crucial criteria for differentiating between web 2.0 and web 3.0 would undoubtedly bring attention to the main objectives of the two generations. The main goal of Web 2.0 was to make it possible for users to engage with online information. On the other hand, Web 3.0 encourages participation so that users can fully immerse themselves in online content. Web 3.0 wants to connect knowledge, whereas Web 2.0 wants to connect people. On a larger scale, web 2.0 concentrated mainly on tagging and end-user experiences. Web 3.0 emphasized empowering users by enabling better trust, privacy, and security. So, it is evident that the target area is an important consideration when comparing web 2.0 with web 3.0. Web 3.0 aims to empower people, while Web 2.0 focuses primarily on community building.

 Technologies:

The underlying technology is the third key differentiator between web 2.0 and web 3.0. Several innovative technologies have aided in the development of both. AJAX and JavaScript are two significant technologies that have contributed to the development of web 2.0. Also, you’ll see that among the technologies underpinning Web 2.0, CSS3 and HTML5 dominate. Then comes web 3.0, which is supported by cutting-edge technologies. The leading technologies supporting the foundation of web 3.0 are decentralized protocols, semantic web, and artificial intelligence. Knowledge bases and ontologies are also vital technologies supporting the development of the latest version.

Types of Applications:

The following criteria would be the kind of applications connected to the two versions. Web 2.0 is characterized by web apps. Web 2.0 applications include two-way websites, video websites, podcasts, and individual blogs. Web 3.0, on the other hand, encourages the development of smart applications by enabling them to use ML and AI characteristics. Web 3.0 applications that stand out include integrated gaming, 3D portals, and multi-user virtual environments.

State of Data:

Another significant element in the outline of web 2.0 and web 3.0 distinctions is the status of the data. The network assumes ownership of the data in web 2.0. But Web 3.0, on the other hand, suggests that data should be owned by an entity and shared freely throughout the network. 

Features:

The features are undoubtedly the last point of comparison between web 2.0 and web 3.0. Web 2.0 introduces a wide variety of web apps and social media apps while enabling improved engagement. It also makes use of interactive advertising. Conversely, web 3.0 offers intelligent, web-based functionalities and applications and relies on behavioral marketing. In reality, web 3.0 provides a beautiful illustration of web technology and information fusion.

Now that we know the difference between web 2.0 and web 3.0 and the upgrades in Web 3.0, let’s see how it will benefit the industrial sector.

Web 3.0 vs Web 2.0 – How will it be Different for Businesses?

Users can better control their data with Web 3.0 using decentralized networks. Privacy and security of the data have always been a concern for businesses that are better addressed in the latter version of the web. Based on these principles, businesses get the following listed benefits with Web 3.0 compared to Web 2.0. 

Lack of Third-Party Intermediaries

Internet usage has already transformed how businesses operate. Much more significant changes are coming with the advent of Web 3 technology. The increased ability to share and collaborate on data will probably lead to new business models based on these activities. Small businesses will be able to lower operating costs and improve their ability to compete. Web 3.0 business opportunities will be powered by decentralized blockchain technology, in contrast to Web 2.0. Information may be processed across multiple devices rather than a central server. Companies will be better equipped to manage and use their data to improve their products and services. Data-driven companies will be able to create new recommendations and offer services that were previously unfeasible. Also, increased data utilization would help businesses better understand their customers’ needs and build products and services appropriately.

Customer Relationship Management

The advent of Web 3.0 companies will radically alter how small businesses interact with customers and respond to their inquiries. Customer relationship management (CRM) has historically been important to businesses. A detailed grasp of the demands and preferences of the customer is necessary to deliver customized services and offers that will increase sales and customer loyalty. Yet, employing traditional CRM techniques has proven difficult because they are frequently confined by the data, making it challenging to acquire a complete picture of the consumer.

Social media, surfing history, and other data sources enable Web 3.0 technology to help businesses understand customers’ preferences better. This will enable them to offer customized services and, eventually, a better chance of connecting with customers. Sales will rise, and customer relationships will improve. Customers will also be able to put more faith in company data. In contrast to Web 2.0, data in Web 3.0 will be kept on decentralized networks, making tampering and exploitation more difficult. Access to accurate information about their transactions would be available to customers. They can see real-time supply chains. Consumers will be given reliable updates on the status of their orders, which will increase the credibility of the business. Web 3.0 has the ability to change how businesses interact with their customers and how they use CRM.

Supply Chain Management:

SCM refers to planning, implementing, and managing a supply chain’s operations. It covers the movement and storage of raw materials, unfinished goods, and works in progress. Supply chains are used to produce and deliver goods and services to customers. By maximizing the flow of resources, information, and cash along the supply chain, one of SCM’s primary goals is to meet consumer demand.

Traditional supply chains have made way for increasingly decentralized Supply Chain Networks in recent years (SCNs). SCNs are networks built on information and communication technologies that include suppliers, manufacturers, distributors, retailers, and other participants.

New Marketing Outlook

Web 3.0 will fundamentally change the game regarding providing small businesses with innovative and economical marketing solutions. Local businesses can now reach customers directly with mobile advertisements. It will open up a new universe of opportunities for sophisticated segmentation and marketing research for small business owners. Businesses may target customers more successfully by creating appropriate messaging with access to increasingly sophisticated and nuanced data on customers’ online browsing behaviors. Some of the features of Web 3.0 are already utilized by apps that track real-time data.

How can Appinventiv Assist you in Transitioning into a Web 3.0 Business?

Whether you are a startup or a well-established company trying to integrate the features of Web 3.0 and use it to maximize your growth, the essentials you need to integrate and implement the right AI and ML tools to take your organization to the next level can be achieved by partnering with  

• A company that you can rely on
• A company with the right technology resources
• A company with experience in what they are doing

We at Appinventiv provide you with it all. We’ve worked with multiple companies providing them with various digital assistance and upgrading their technical aspects. 

For instance, we have created a transparent system in the hotel industry with our Empire app. The app enables our client with real-time guest information and smooth booking services while enabling crypto transactions. This enabled the client to get rid of the intermediaries, thus increasing better customer service and increased profits.

We can assist you with a smooth web 2 vs web 3 transition. We look forward to being helpful to you as well. We love listening carefully to each problem and curbing them with the help of innovative technologies combined with our experienced and knowledgeable staff.

As a leading blockchain software development company and dapp development company, we excel in what we do. Try our services and ease your company’s transformation to a Web 3.0 business version!

FAQs

Q. How does Web 3.0 affect businesses?

A. With virtual shops and monetized digital assets, Web3 will promote more incredible innovation and entrepreneurship. By creating a blockchain-based, tamper-proof record of transactions, Web 3.0 technologies can assist in increasing transparency and confidence between businesses and their customers. Customers can monitor where their products are at each stage of the production process using a real-time supply chain view.

Q. How can a company use Web 3.0 technologies to gain a competitive advantage?

A. Web3 will eliminate outside data brokers who don’t often care about customer privacy. These businesses frequently collect data without telling the users and then monetize it. Companies that purchase this data later lose the trust of their clients. By taking data brokers out of the equation, Web 3.0 companies find a solution to this problem. In addition to it, it enables better customer relationship management, supply chain management, and a completely new marketing outlook.

Q. What is web2 and web3?

A. The “read-write” era of the internet, or Web 2.0, began in the latter part of the 2000s. It was an improved model that allowed for user and website interactions. A future version of the internet called Web 3.0 will enable users to view, create, and engage with content. This stage is known as “read-write-execute.” Versatile applications and machine-to-machine communication are included.