Should you outsource blockchain development work?
- Oct 11, 2018
- By admin
- In Blockchain
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To quote a cliché, blockchain is a relatively new technology that is still some time off mass adoption. This is mainly because people are still trying to understand what it is and how it works. Having said that, there are companies that have recognized its potential and have started implementing it in ways that suit their business models.
Big banks & supply chain companies are testing out blockchain use cases like smart contracts & cheaper cross-border payments. Healthcare companies are working on creating a decentralized database of patient history with a view towards preventing discontinuous treatment.
Earlier, we had written an article on the kind of companies that should consider implementing blockchain in the very near future. If you realize that you are one of them, then the next question arises: how do I go about implementing blockchain?
Before that, let’s consider the scale of work you’re looking at.
-Firstly, and most obviously, you need to identify the right use case. Again, you can refer to our earlier article to see if it would make sense to you.
-You’ll then need to identify the best consensus algorithm for your use case. This will decide what kind of a consensus would approve a new block on the chain. Bitcoin’s blockchain uses the proof-of-work algorithm, while those of Dash & NEO use the proof-of-stake algorithm. Ethereum began migrating towards the PoS mechanism. You’ll need to understand the pros & cons of each such algorithm, compare that with your use case, and zero-in on one.
-Once this is done, you’ll need to decide which platform you’ll build the actual blockchain on. Again, this will tie-in closely with the type of consensus algorithm you have chosen to go with. There are platforms that are designed for specific types of consensus, so you should choose accordingly. To give you an example, Ether (Ethereum’s coin) is the most popular for companies getting into ICOs.
-Next, you’ll need to setup your database & infrastructure, and decide what kind of blockchain yours is going to be (private/public, permissioned/permissionless).
-The next step would involve deciding on essential parameters of your blockchain, like your address formats, key format, signature for individual blocks and so on. This will be given to, and used by, everyone on your blockchain, so it’s better to be sure of this from the start.
-Only once you have all of this in place, can you start the real development of the blockchain.
As you can see, this is a lot of work. It’s also the kind of work that requires a lot of know-how. And a lot of specialist talent. Combine this with the fact that it’s still a nascent tech, and we know what’s in store: precious few resources who are too expensive. This was the case when data science & machine learning resources were rare, and available only at a premium. It’s still not easy to hire ML experts, but they are far more attainable than blockchain experts today.
To put it bluntly, there simply isn’t a big enough talent pool of blockchain engineers to choose from. Hiring one can take months, and even then you could end up making a mediocre hire due to lack of options.
Moreover, just as it was with ML engineers, the big companies are best placed to attract the top talent. They have the resources and the will to see their blockchain initiatives shine. That leaves you with developers who at best would have played around with a couple of blockchain platforms or cryptos. Nowhere near the calibre required to oversee blockchain migration.
With this being the current scenario, blockchain consulting companies have emerged as the best option for companies looking to enter the field, at least in the short term. Not only do they solve the immediate personnel problem, they also come with the adequate level of competence to get your blockchain going. Here’s a case for companies to make use of blockchain consultants.
Case for working with blockchain consultants
Let’s try and picture what goes on inside a consulting company, with regards to adopting new tech. For these tech companies, adopting new tech is a way of opening new business opportunities. And founders of these companies generally stick to around 3-4 technologies that they’re comfortable with. As new ones emerge, they contemplate deeply to take a call on the feasibility of adoption. For example, when React gained prominence, companies that were already offering Angular would have had less trouble making the adjustment.
Blockchain, on the other hand, is not so straightforward. There are entirely new concepts to learn, and they’d be using other concepts like cryptography which they wouldn’t have encountered too often. Not every company can just start offering blockchain services. Generally, the best teams have a strong founder who has built a strong tech team. And since they’re in this field, they would have heard of ‘blockchain’ a lot earlier than you. Which in turn means they’re more than capable of delivering blockchain products by now. It is with these companies that you should look to engage.
Another advantage they have is a readily available pool of developers within their company who can be successfully re-trained for blockchain. And if they already offer C++, JS or Python, it can happen that much quicker. This negates the time and effort you’d spend trying to hire from the market, or even retrain your own employees. You can get started almost immediately.
Cost is another factor. The average pay for blockchain engineers across America is upwards of $100,00, going up to even $200k in places like San Francisco & New York. But with some careful searching, you could spend that money on outsourcing to get started. And when you outsource, you’re not limited to any geography. If the going rates in America are too much for your budget, you can look at markets like Asia & Eastern Europe. Both markets have high-calibre, low-cost options that you can source from (we’ve put together an initial list of blockchain consultants).
In short, consulting companies provide several plus points:
-The talent is already there, and so is the calibre
– You can find the team to suit your budget without compromising on quality
– You can start off you blockchain project quickly, as opposed to waiting for the right hire
Blockchain consultants are the best option for you to jump-start your initiative. Over time, you could train your in-house team to learn, or even be patient while hiring from the market. Time will be saved, and you would actually have a production-ready project out there.
ContractIQ has launched a listing of top blockchain consultants from across the world. ContractIQ’s experts have a thumb on the latest trends in blockchain, including rising platforms, use case practicality and the going rates for blockchain development. Drop us a line at firstname.lastname@example.org and our team will get back to you asap.