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Jan 24, 2020 | 6 min read

Blockchain for Business: Outsourcing Blockchain Development

Pavel Kaplunou , Marketing Communications

Blockchain development is proclaimed to be the most demanded skill for 2020, according to LinkedIn research. High demand rarely means available human resources though. The information technology industry is experiencing a shortage of talent that knows its way around distributed ledger technology. So is it worth the effort to assemble a team in-house? Can, perhaps, the process be outsourced to a company offering blockchain development services instead?

Blockchain development basics

Any entrepreneur or techie, who has half a mind to develop anything whatsoever related to the blockchain, should probably be aware of at least a few things to start. The entry-level threshold implies knowledge of the principles of cryptography and distributed computing. Oftentimes, finding the talent with the right experience is one of the major problems that business owners face.

They should also probably factor in the difference between developing a blockchain platform (from scratch) and building something on an existing one. If the former is the case, this is where things might get tricky. The latter, however, is more feasible, given the team is familiar with the nuances of the particular blockchain they will be working with. 

On a different note, though, businesses have yet to fully justify why they would implement the technology to solve their business needs.

Why build in-house? 

Despite examples of blockchains that have been operational for well over a decade, the technology remains relatively unexplored and under-developed. Few tools, such as development frameworks or SDKs, and an overall lack of standartization makes projects hard to approach and evaluate in terms of investment, time spend and resources required. Simply put, owners should understand their clientele and why they would utilize a blockchain-based product, as well as how that product will help them better meet their business goals.

Any such undertaking will inadvertently run into the issue of finding people with the relevant experience. If they are lucky to cobble together a team, which can rise up to the challenge, there are plenty more unavoidable pitfalls down the road. Therefore anyone who endeavours a project of this scope should at the very least aim to find developers with a broad portfolio, extensive enough to encompass web, mobile and blockchain development.

Why outsource?

Truth be told, there is no short answer when it comes to outsourcing the development of a blockchain platform from scratch, as building up the codebase for an entirely new platform can turn out to be an insurmountable problem. From a business point of view, it is hard to say how a new platform can hold a candle to existing ones and how they cannot be used to commercialize ideas. 

The general tendency is that startups tend not to rely on outsourcing services to manage the core of their project. However, what they do count on is leveraging additional expertise for second layer solutions. In other words, solutions that are off-chain or part of a sidechain, and therefore do not imply working with the first layer protocol of the blockchain. Some businesses even build their entire suite of products and services around the second layer (as exemplified in the case study below). This is exactly where an outsourced team could be especially handy.

Dedicated or scaled remote teams and the experience they possess means they can tackle fairly complex issues around integrations with the primary protocol and nodes, crypto wallet integrations, smart contract configuration, ICO management and work related to using specific software development kits and APIs. to build a fully-functional infrastructure.

Public vs private blockchain

There are other things to consider when building a business using a distributed ledger – will it be based on a public or private blockchain?

Public blockchains are those that power the majority of today’s cryptocurrencies (XRP is not part of that). One of their main characteristics is that they are completely open to anyone who wants to check a transaction or become part of the mining network. Many crypto-businesses rely on these networks to power crypto processing and payment services. These typically employ second layer or off-chain solutions to make use of the high security and the trustless nature of the network.

Private blockchains on the other hand are usually a centralized network that assigns different roles and functions to participants of its network. Such networks can be utilized by large corporations, financial institutions or hierarchical organizations to serve specific business processes or manage complex processes with greater speed and scalability.

To avoid missed deadlines and unforeseen pitfalls, business owners must seek to build teams with skillsets that align with their objectives.

Smart IT, for example, participated in the development of the backend of crypto wallet that powered a gaming site and mobile application. The wallet processed tokens issued on the Ethereum blockchain and allowed players to make bets using these custom tokens. It connected to the primary blockchain through synchronization with a node. Enabling the stability of that node was one of the main challenges that were addressed and resolved as part of the work.

Does it make sense to outsource blockchain?

Smart IT CTO, Michael Astashkevich, says, “Not every developer will have the skills to match the many challenges that need to be addressed. Blockchain development projects can vary in complexity and only previous experience will be any kind of guarantee that tasks will be completed. The project will not be sustainable on enthusiasm alone”.

“Blockchain development in-house or outsourced is neither bad or good. If anything is certain, it is that having a reliable partner when it comes to IT needs can make or break your project. Blockchain consulting and development happen to be something we have experience and we are happy to share that knowledge”, quotes Denis Shugaev, Head of Business Development at Smart IT.

The key takeaways from the above all point to the fact that a skill gap is imminent, but not unresolvable. Moreover, entrepreneurs and business owners will need to have a crystal clear understanding of their aims and the results they wish to obtain from going into blockchain. The market has already eliminated players that wanted to ride the wave of hype, as users have converged to the established and tried platforms with definable and transparent processes. 

More and more developers partake in projects in and around the blockchain. This serves to narrow the existing skill gap and lack of experienced human resources across the industry. Yet, it is still hard to pinpoint exactly when the number of job offerings will start to equal the number of available blockchain developers. For now that figure stands at 14 job openings for ever one available developer.

24 January 2020


Pavel Kaplunou, Marketing Communications

Pavel is Smart IT's Marketing Communication Manager. He oversees content creation and is in charge of the official Smart IT blog. Contact Pavel to learn about potential media and content collaborations. [email protected]