If you’re a current or aspiring developer, you probably would’ve seen the headlines about the recent events from the blockchain projects. From Beeple selling a $69 million jpeg to an anonymous hacker stealing half a billion dollars ‘for fun’ and returning the lot, the tech media can’t get enough of the crypto world. Statistics have shown that the whole blockchain market has grown from $1.2 billion to $12.7 billion from 2018 to today – it is indeed an exciting journey.
Maybe you want in on the action yourself, but where could you start?
In amongst all this excitement and noise, it can be hard to figure out what’s really worth working on and what’s just hype and empty vessel making noises. Not doing enough research is one of several dangerous innovation mistakes that a novice in the industry can make.
The easiest way would be to sit back and wait for the space to calm down, as regulators catch up and start laying down some rules. However, if we were to accept that these ‘unstoppable’ technologies are here to stay – we’d be missing out on the opportunity to get in on the opportunity a flourishing new scene.
The value of blockchain for developers
In layman’s terms, the blockchain world can be split into the Bitcoin and Ethereum blockchains. While Bitcoin is just one speculative bubble or store of value (depending on who you ask), the Ethereum (or “Web3”) ecosystem has all kinds of projects going on at a rapid pace. Bitcoin payments might be a fine addition to an app, but Ethereum or a neighboring “Layer 2” blockchain, like Polkadot is what you’ll build it on.
Unlike a big tech company where teams are siloed into specialist disciplines, Web3’s composable tools enable a multidisciplinary DevOps team structure focused on putting a whole project together.
In 2021, ConstitutionDAO attempted to collectively buy and preserve an original copy of the United States constitution at auction. Ownership and governance would be distributed among the thousands of people who contributed funds.
In the end, they were outbid, but what was impressive was that the whole system and organization was set up by a handful of developers just a few days before the auction began.
With that in mind, let’s get the lie of the land and look at five main types of blockchain projects you could get involved with.
1. Privacy and control
Over the past 10-15 years, your online life has moved to a cluster of cloud-based platforms like Facebook, Amazon, and Google. This is convenient for users and very profitable for the companies harvesting their data. However, with users increasingly concerned about privacy, and cyberattacks on these servers on the rise, a range of projects look to give users digital sovereignty.
Crypto wallets like Metamask don’t just store money. They also function as digital identities which are owned by the user, and not the platform itself. This one identity can be used across Web3, which is convenient in an era where people are struggling to remember so many passwords.
If the governments were to get on board, we could possibly see a world where your information like ID, tax numbers, birth certificates, and health records are all stored on one digital identity you own outright. This would be a convenient single source of truth, and it would mean your most sensitive data isn’t stored on a server for hackers to target.
That’s an interesting future, but as of 2022, a lot of digital ID solutions still rely on centralized services -: popular APIs like OpenSea’s, or Apple’s App Store. This essentially means that you’ll still need to get a good app store review score.
And while the future of digital ID is convenient, onboarding new users is still a huge issue in the space. New users are confused by “hot” and “cold” wallets, public and private keys, seed phrases, and so on. This means developers with some UI/UX experience would be considered are a huge asset -. If you know how customer empathy maps elevate CX, you could be the person who builds the onboarding flow everyone else looks up to.
The exciting thing about blockchain for developers is that it’s a frontier, and lots of fundamental problems have yet to be solved yet. A great product could play a huge role in shaping the future of space.
2. Permissionless data sharing
Many people are finding their social lives split across five or six messaging apps these days, unlike previously whereby Facebook was suffice to fulfill our social needs.
Useful data like your contacts and messages are siloed across different services who’ll do everything to avoid co-operating, fighting EU legislation demanding they interoperate.
If data-sharing is this bad for chatting, imagine how bad is the situation for the services managing the world’s supply chains. With supply chains more complex than ever, companies like Maersk and DHL can see that they need to start sharing data in a ‘trustless’ and automated way.
For example, many eCommerce retailers would benefit from something like a Shopify integration with ERP, which would enable their Enterprise Resource Planning software to take in data directly from their online store running on Shopify.
The API integrations that enable thisare great, but they don’t scale. For businesses, this would mean that sharing data between the services they rely on involves bespoke development following negotiations between companies.
For blockchain developers, the whole blockchain ecosystem is a world of ‘permissionless’ and interoperable tools. Since all on-chain data is public, there’s nothing stopping you from whipping something up to read some supply chain data and use it to inform your company’s operations.
With so many blockchain projects running on ‘tokens’ and, their own little currencies, there are always new projects coming online to exchange value between these mini-economies.
Often these exchanges often have their own tokens, such as Uniswap’s UNI token or Binance’s BNB. These tokens are handed out to ‘liquidity providers’, people who would deposit an equivalent amount of, for example, ETH and BTC, so the exchange has a pool of those tokens to hand out.
Since the liquidity provider wants their UNI or BNB to increase in value over time, the exchange is encouraged to grow the value of that token by providing a good service to customers. Coinbase, for example, has expanded beyond just swapping USD for crypto. They now provide services like a wallet, private clients for family offices, and a credit card-like rewards program.
These exchanges are such valuable targets for hackers – Coinbase Wallet solves the onboarding problem by handling the user’s crypto wallet for them – that they’re always hiring developers to enhance their security. But with a simple smart contract being capable of holding liquidity pools, it’s not so hard to start one of your own.
Since crypto started with Bitcoin – an attempt to create sound money that couldn’t be tampered with, much of the crypto space still has some connection to finance in general.
The international payments infrastructure is extremely outdated if you were to look into it – systems are still running on technologies like SWIFT which have beenaround since the 1970s. With many people in the global south depending on international payments from developed countries for their livelihoods, there’s a huge opportunity for fintech companies to streamline those processes.
Stripe recently announced that they’re providing their services to crypto-native businesses, which means they can now benefit from the anti-fraud and KYC technology that businesses have had available for years. Crypto is still mostly unregulated, so there’s a swathe of FfinTtech businesses trying to provide these kinds of protections now before regulators make them mandatory.
For developers, this is an opportunity to get in on the ground floor before the market explodes.
5. Decentralized computing
One of the most interesting types of blockchain projects is decentralized computing projects, such as DAOs (Decentralized Autonomous Organizations) or dApps (Decentralized Apps). A DAO is an organization or business managed democratically using the blockchain. Votes are held either among shareholders or the community involved. Similarly, a dApp refers to any app that runs without a central provider once it’s been released into the world.
On a decentralized infrastructure, you’re no longer worried about the firewall monitoring to keeping a cloud server safe from attacks. Remember: all data on the blockchain is public, the security profile isn’t about who can read your data, but who can write more of it.
Because dApps run on ‘unstoppable code’, it’s even more important that you follow practices like automated regression testing in a test environment. Once your dApp is out in the world, there’s no way to hotfix changes if it’s already in use.
The only simple way to change a contract is to destroy it. For that reason, security auditors are paid to make sure contracts are bulletproof before they’re committed to the blockchain. Crypto moves so fast that it’s hard to keep up with. However, with big smart contract hacks guaranteed to make headlines, cybersecurity in the crypto space is going to be a profitable niche for developers in the long run.
The five types of a blockchain project
There are so many interesting projects appearing in crypto every month, from art that changes based on who buys them to social clubs running on their own currency. It is indeed a lot to take in for a developer to get into the space, but these five types can be used as a helpful starting guide to help you get acquainted.