How to Create a Blockchain - Guide to Building a Main Blockchain Network

In 2023, 606 billion rubles were spent on blockchain solutions, and interest in this technology continues to grow. It is no longer just the technology underlying Bitcoin and other cryptocurrencies. No, given how many industries are already successfully using blockchain and the many ways this technology can help businesses worldwide, blockchain is poised to revolutionize. For example, 52% of experts believe that in the future, blockchain will play an important role in verifying customer identities and detecting fraudulent transactions or actions. Blockchain will also be indispensable for transforming our current highly centralized financial system into a much faster and more secure decentralized one (DeFi - decentralized finance).

However, how do you create a blockchain network on your own? With a large number of platforms, there are several different ways, depending on which solution you choose.

In this article, we will explain how to launch your own network using the Corda platform as an example, and why you should consider creating your new application on blockchain.

What are the Benefits of Creating a Blockchain?

Banking, healthcare, agriculture, software development, and many other industries are either already using blockchain or plan to use it in the future. According to experts, the use of blockchain could increase global GDP by 176 trillion rubles by 2030.

How Exactly Can Blockchain Help Businesses?

• Increased security and speed of transactions by storing data not in a single database but in a decentralized blockchain network
• Reduced operational costs and simplified processes (e.g., in logistics and supply chains)
• Ensuring much greater data transparency than ever before, thanks to data being immediately updated and shared across all nodes
• Protecting business data from manipulation since ledger nodes cannot be edited after being added to the blockchain

Because blockchain operates as a trustless environment (i.e., a place where trust is not required since every network participant can verify every transaction and the ledger network), it is a much safer place to store sensitive business information.
Software developers are also leveraging blockchain technology to solve a number of issues related to mobile and IoT application development, such as data security. In blockchain applications (so-called decentralized applications or Dapps), all data is encrypted with a cryptographic hash, and all changes are visible to all network participants, making the applications much more secure. And since every node in the network has an exact copy of the stored information and any changes must be confirmed by consensus, the entire system is virtually immune to hacking and resilient to failures.

Enhanced security is just one of the advantages that companies can use to stay ahead of competitors and attract more users to their products. Today, many applications also allow users to pay for goods and services using cryptocurrency or platform-specific tokens, and interest in such payment methods is growing, as 39% of consumers believe that cryptocurrencies should be used for payments, not just investments.

How to Choose a Blockchain Platform

If you want to add cryptocurrency payments to your new application or start storing data on the blockchain, you first need to choose one of the main blockchain solutions. And this can be a bit tricky.

If you have already started exploring platforms, you have undoubtedly noticed the vast number of options. Earthweb claims there are at least 1000 blockchain platforms on the market—Ethereum, Ripple, Stellar, or Corda, to name a few. Which one should you choose?

With so many options, it is wise to first study and write down your goals, plans, and expectations from a blockchain solution, as this will help compare the capabilities of each platform. In particular, consider the following:

• Whether you are comfortable with a public blockchain network (open to all users) or need a private (invitation-only) network created just for your company.
• What features you need for your business network (for example, not all blockchain platforms currently offer smart contracts, so if that is necessary, ensure the chosen platform supports them).
• The number of transactions that will pass through the blockchain (the more transactions required from the blockchain, the higher the TPS (transactions per second) rate should be).

Further complicating the decision is that most platforms differ in their capabilities and features, and some have been developed with specific industries in mind. We covered the main factors to pay special attention to when choosing blockchain solutions in our other article, “Choosing the Ideal Blockchain Platform – A Must-Know List of Blockchain Platforms.” In that article, we also added a brief description of the most popular platforms to give you an idea of what to look for when comparing blockchain solutions to ensure you choose the best one.

How to Build a Blockchain Network – Corda Example

Now we will look at some technical details about what is needed to create a new network and how you can create a new blockchain network on your own. For this guide, we chose the Corda platform because it is well-documented and relatively easy to extend, so it should give you a good understanding of how to create a blockchain network.

Corda is a permissioned peer-to-peer (P2P) distributed ledger technology originally developed mainly for financial organizations to help them reduce operational costs and speed up transaction processing. However, the platform has proven equally valuable for other industries. For example, in healthcare, Corda is used to connect various medical institution databases and create a single, updatable patient profile. And because records are stored in blocks with timestamps, encrypted and immutable, the risk of unauthorized access or alteration of data is minimal.

Corda is also gaining popularity in various industries, including digital assets, authentication, and the public sector.

We chose this platform for this guide for several reasons:

• Thanks to its P2P architecture and “building block” application architecture, it is easy to scale.
• Corda operates as a private network (only those you invite can join), making it great for hosting sensitive business data.
• The Corda platform is very flexible and agile, so companies can build their applications and networks exactly as they want.
• With its integration features designed for enterprise systems, the blockchain network can be easily connected to a company’s core tools.
• Because there is a large community around the Corda platform, it regularly receives updates, additions, and improvements.

What are CorDapps?

CorDapps (Corda Distributed Applications) are applications that run on the Corda platform, allowing Corda network nodes to interact and perform actions. To work, they must be installed on Corda nodes.

Applications can be written in any JVM-compatible language, so if you are familiar with Javascript or the Kotlin programming language, you should not have much trouble creating your own applications. What further simplifies Dapp creation is that applications can be built faster using available application templates that users can customize, and later developers can quickly add new features using a modular API.

A CordApp consists of three main elements:

1. States: A state is an immutable object that stores a fact known to one or more Corda nodes. They can contain any data – from identity information to KYC data, stocks, etc. States are also immutable, meaning none of the previous blocks can be edited – instead, all changes are added as new blocks.
2. Contracts: Corda contracts are written in Java or Kotlin and define the criteria for verifying transactions or data. If both the input state and the output state confirm the correctness of the transaction, the transaction is accepted and added to the ledger. If not, the transaction is rejected. A single CorDapp can store one or more contracts related to one or more network states.
3. Flows: A Corda flow is a sequence of steps that tells a node how to add data to the ledger, for example, when issuing an asset or settling a trade. But instead of forcing users to perform these steps manually, flows can automate these tasks. Corda also provides developers with a ready-made library of flows for the most common tasks, meaning developers do not have to write them from scratch.

Joining the Corda Network

Now that we have looked inside Corda, let’s talk about the network and how you can join it yourself. The Corda network consists of nodes, i.e., users who have been invited to join the network. Each node runs an instance of Corda and one or more CorDapps installed on it.

A difference between Corda and other distributed ledgers is that communication between nodes is point-to-point, and data is exchanged only when necessary. Since nodes in the network can send messages directly to each other, there is no need to share data across all network nodes. And if the recipient is offline, the message will wait in a queue until they come back online – much like email.

The consensus algorithm also differs from other blockchains, as Corda uses two algorithms: one to ensure the uniqueness of ledger updates, and another to verify the validity of the update. This means Corda does not need to use proof-of-work or proof-of-stake algorithms like other blockchains.

As for the network itself, there are four categories of nodes that perform different roles within the network. These include:

• Network Map: The network map node allows nodes to discover and connect to other compatible nodes.
• Notary: The notary node is responsible for verifying the input state in each transaction and either signs or rejects the transaction. The notary also acts as a timestamping authority.
• Oracle: A node that supplies external information to smart contracts and acts as a bridge between the ledger and the outside world. Essentially, it collects requested external information, confirms or denies it, and passes it back to the node. If the obtained information meets the smart contract conditions, the Oracle can automatically execute it. Importantly, the oracle does not need to see the content of the entire contract – only the part it needs to confirm.
• Regular Nodes: Individual users who can communicate with other nodes, notaries, and oracles, and accept updates to the ledger.

Each node in the network has an identifying name (in the form of an X.500 name) and a public address through which the node can communicate with other network nodes. To do this, nodes use the network map service, which stores and publishes a list of nodes and their services, along with information about them.

Joining the Corda Platform

To start using Corda, you first need to register on the R3 network. If you do not yet have an R3 account, you first need to fill out the Contact Us form, answering the following questions:

• Are you planning to create a new Corda application, do you already have a ready application, or do you want to use an existing blockchain application?
• If you already have a ready application, provide its name and purpose.
• Do you plan to use Corda Open Source or Enterprise version?

After this, an R3 representative will contact you to discuss your needs and pricing for using the platform and help you through the registration process.

After that, you can register on the network – remember, since Corda is a permissioned blockchain network, your registration must first be approved.

Then you need to fulfill some technical requirements, such as setting up and deploying a node, and then registering it with the service – all requirements and steps can be found in the Corda registration guide.

When to Hire a Blockchain Development Specialist?

If you are well-versed in Java or Kotlin, you can create your own application

If you do not have time to code yourself or want to speed up the development of a new application, it is best to contact blockchain developers who can help you with network design and setup.

If you do not fully understand how this technology works and want someone with experience in fintech/crypto/blockchain to join your team, seeking help from someone with experience in blockchain-based application development will save you a lot of time (and money) in the long run.

Since we have worked on numerous applications involving creating a blockchain network or adding cryptocurrency support (for iGaming, sports betting, MedTech, and fintech industries), we know this sector inside out.

Therefore, if you are considering building a blockchain application or creating a private network for your company, we can very likely help you.

Conclusion

Given the many possibilities that blockchain technology enables, we can be sure that this technology will only grow in popularity in the future. Whether you work in business, finance, or healthcare, implementing a blockchain network can give you a host of advantages, from unprecedented data security to much faster transactions with full transparency.

Our guide should help you a bit in introducing your business to the blockchain industry. And if you have doubts or questions, we are ready to answer them – or help you advance your new blockchain project.