How to Create a Private Blockchain to Elevate Business Security?

Blockchain technology has gone through a rapid evolution in its functionalities as well as applications, resulting in increased demand in various areas. Organizations are also increasingly exploring blockchain applications and how the technology can help in solving advanced business problems. 

Even though public blockchains offer many advantages, they are more susceptible to malicious users as they are on a shared network. On the other hand, private blockchains provide additional security to the stored data, making it a driving factor for many choosing to develop this network. 

In this comprehensive blog, we will understand the private blockchain application development services in business, the key differences between public and private blockchain, and the steps to develop a private blockchain to enhance security. 

What is a Private Blockchain?

Blockchain is a distributed ledger technology for maintaining transparency and immutable records of digital assets. The emerging technology has drawn lots of attention as it can efficiently reduce fraud and risks. According to the reports, the overall market size of blockchain technology is expected to reach $94 billion by 2027. 

Blockchain technology is primarily divided into two categories- public and private. A private blockchain is a decentralized ledger that is only accessible to a selected group of individuals or organizations. These are similar to public blockchains but are managed centrally. 

It has a single operator or entity that controls who can access the network, view information, and create data on the blockchain. To gain access to this network, the individuals must receive an invitation and verify their identity. 

How Private and Public Blockchain Networks Are Different From Each Other?

Before diving further to understand this network, let’s understand the key differences between the two major types of blockchains. 

How to Create a Private Blockchain Platform?

Let’s go through the process of creating a private blockchain platform.

Step 1: Understand Your Business Goals

Knowing the purpose of creating a network for your business can help you strategize your plans to achieve your business goals. 

It is important to identify your target audience and understand what features and functionalities should be added to the network to make it worthwhile for the consumers. Analyzing your goals before developing a private blockchain will also help you determine the blockchain app development cost. 

Step 2: Hiring Blockchain Developers

Hire blockchain developers to build your platform, starting from scratch. It is without any doubt that creating a private blockchain requires advanced skills that only blockchain developers can have. 

While hiring the blockchain developers, you can check whether they can:

• Comprehend how to integrate advanced technologies such as artificial intelligence development services, AR, and machine learning services. 
• Knowing the latest blockchain trends that are relevant in a decentralized world. 
• Are able to integrate wallets into the blockchain platforms. 
• Can easily overcome challenges when developing blockchain platforms, such as implementing your preferred consensus mechanisms. 

Step 3: Building a Private Chain

Find in detail the process of building a private blockchain:

Geth Scenario

In this, the developers will use the Ethereum blockchain using the GO Ethereum. They will install Geth to verify if they want to use the Homestead version of Ethereum or other Ethereum improvement proposals. The developers can create Genesis files and modify them using the Geth console. 

A skilled developer will be able to handle this task and understand the process of building a private blockchain. 

Configure Chain Parameter

In this process, you will decide the speed of your network. You can set the 0 difficulty level for the block generation. In the next step, pre-locate addresses on your chain with fake Ether balances. The reason for calling Ether fake is that you cannot transit without using the main Ethereum network. 

Create Users’ Accounts and Smart Contracts

The users’ accounts will act like crypto wallets where the participants can transact on the network. For example, users can make payments in the crypto to access services and products available on the network. 

Start Ether Mining

This process involves distributing Ether among the participants on the basis of the business model that the company has implemented in its network. The network will immediately start Ether mining, where the node will do all the calculations while adding new blockchain nodes. 

Include More Nodes

You can assume nodes as servers that are running on the networks or EVM. There will be a requirement of enough nodes for participants to execute their equal rights over the product. Moreover, there is also a possibility that the blockchain developers will offer cloud services for running your network. 

Fork Ethereum Scenario

It is another scenario where the developers will talk about copying the blockchain to create forks. 

This approach will offer you more control over how your chain will operate. Moreover, when using the Ethereum blockchain, you must also remove all the available decentralized apps that you don’t need for your network to avoid the resources and maintenance costs. 

Step 4: Planning for the Required Decentralized Apps

Creating your own private blockchain platform will not be enough and you will also need apps to fulfill your business needs. On the blockchain platform, you can create apps to enable crypto transactions, store data records, and for other different purposes. 

Two essential components that are significant to creating dApps on your network are:

• Smart Contracts (to automate transactions and other processes)
• Platform UI (allowing users to interact with your network)

Step 5: Start Prototyping

Instead of directly jumping on creating your network, you can build a prototype to check all your network features and UI functionalities. The prototype will help you understand how the private blockchain platform will look after its launch. 

Step 6: Creating the Backend Part

In the backend development part, there will be features, APIs, and other functionalities that will make your network fully functional. When working on the backend development part, you can decide on:

• Offering support to multiple crypto wallets
• Creating your native cryptocurrency
• Smart contract functionality

Step 7: Deployment of Apps to Your Blockchain

Once the dApps are ready, you can deploy their smart contracts and the rest of the required app components to your network. You should also make sure that the private blockchain developers are properly following the Agile development methodology to help you stay updated with your project, further enabling you for the app’s maintenance and upgrades after its launch. 

Best Practices to Follow For Creating a Private Blockchain 

To make your own blockchain, it is important to ensure the successful implementation and operation of private blockchain services, it is important to implement industry best practices for an efficient and secure platform. 

Utilization of Smart Contracts

Self-executing smart contracts can be implemented while developing this network to automate the execution of the agreements, and to provide security and integrity for the transactions. 

Ensuring Network Resilience

While building your own blockchain, It is important to establish a strong network infrastructure that can handle the potential disruptions. This includes the implementation of a well-defined recovery plan, conducting regular backups, and having protocols to address possible attacks. 

Using a Permissioned Network 

While understanding the pillars of blockchain technology, it is important to note that while creating a personal blockchain, one of the sought-after practices is to use a permissioned network. Enhancing security and scalability, and ensuring that only authorized people with the proper credentials can participate in the network is crucial. 

Employing Strong Encryption

To safeguard the private blockchain platforms against attackers, it is important to use strong encryption techniques for the data in transit and at rest. Additionally, you should also adhere to the secured key management protocols. 

Ensuring Compliance

It is important to maintain legal compliance to create your own blockchain network as it is vital to adhere to the associated laws and regulations, including anti-money laundering and know-your-customer (KYC) requirements. 

Some of the Best Features of Private Blockchain

There is no doubt that this network helps in securing the company’s essential data and information. However, what makes it advanced are its features that help increase its efficiency. Some of the essential features are listed below:

High Efficiency

The network provides high efficiency and works better than the public blockchain. In private blockchain, only the pre-authorized nodes get an entry, hence they can only take up fewer resources than usual. In a public blockchain, there are no limits to the number of nodes that can enter the platform. 

Privacy and Confidentiality

Private blockchains are often used in situations where data privacy and confidentiality are extremely important. In this case, participants may not want their data or transactions to be visible to the public. 

Faster Transactions

Due to their controlled nature, private blockchains can process transactions more quickly than public blockchains. Developers can follow the latest blockchain trends to incorporate the latest technologies while developing the network that facilitates faster transactions. 

Centralized Control

A private blockchain is often more centralized in terms of decision-making and governance. A central authority or a consortium of trusted parties typically manages and maintains the network.

Required Tech-Stack for the Development of Private Blockchain

The advanced tech stack required for the development of private blockchain is mentioned in the table below:

How Does Private Blockchain Benefit Businesses?

There are several advantages for businesses choosing this network for their organization. Some of the important benefits are:

More Transparency

It brings more transparency to businesses by offering better coordination and verification between the companies and the members participating in the particular network. 

Great Security

By opting for private blockchain for business, organizations can restrict their networks to verified users and staff to improve their security. Moreover, the companies can also get exact details about all the participants involved in their network and take quick action in case they catch any malicious activity. 

Better Performance

A private blockchain network consists of fewer members than a public network resulting in limited activities such as transactions and verifications, Moreover, all the transactions are also motivated with smart contracts, further helping companies to get fast performance for business-related transactions. 

Data Privacy

As a company’s network consists of authorized users, companies can also ensure that their data is secure and shared only among trusted sources. 

Use Cases of Private Blockchain

Private blockchain has become a powerful tool for businesses seeking secure and efficient data management. The below-mentioned private blockchain use cases further explain how blockchain development can provide customized solutions:

Financial Services

The integration of this network into financial services, such as blockchain in banking has altered the landscape of the industry. This network in financial services helps streamline cross-border payments, expedite the settlement process, and ensure secured data sharing among financial institutions. 

Real Estate

Real estate is another one of the private blockchain examples where the network enhances property transaction transparency and also streamlines transfers that can mitigate fraud and ensure efficient property management. 

Healthcare

The incorporation of private blockchain in healthcare plays a crucial role in the secured sharing of patient data, thereby improving the interoperability, and ensuring compliance with data privacy regulations. 

Insurance

In the insurance sector, private blockchain facilitates automated claims processing, further improving data accuracy and fraud detection. 

Supply Chain Management

Private blockchain in supply chain management has revolutionized the operations of businesses. The network provides a secure and transparent platform that ensures the traceability of goods and reduces instances of fraud and counterfeit products. 

Collaborate With Appventurez to Build a Robust Private Blockchain Network

Private blockchain holds immense potential as it offers robust, scalable, and highly secure database services to various organizations. The network also provides clear visibility into the business operations, thus reducing waste and identifying defects.

Appventurez, as a private blockchain development company, has a team of developers and specialists who can help you embark on a transformative journey toward establishing a secure and efficient decentralized infrastructure. 

By leveraging cutting-edge technologies and best practices, we help empower organizations to customize and implement blockchain solutions tailored to their unique requirements. Our team will also guide you in strategizing a private blockchain network that will be capable of enhancing transparency and maintaining data integrity.