How to Create a Blockchain – A Guide for Building a Core Blockchain Network

9 August 2022
Marcin Śpiewak
Marcin Śpiewak
CTO
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Contents

  • Intro

The interest in blockchain technology still keeps growing. It’s not only the technology behind Bitcoins and other forms of cryptocurrency now. With numerous industries already using blockchains with success and miscellaneous ways the blockchain technology could help businesses worldwide, blockchains are set to revolutionize the world.

Around 52% of experts specializing in blockchain development believe blockchain will be essential to verifying customer identity in the future and spotting fraudulent transactions or activities. Blockchains will also be indispensable in transforming our currently very centralized financial system to a much faster and safer decentralized (DeFi – from decentralized finance) one.

How to create a blockchain network yourself, though? With the number of platforms out there, there are several different ways, depending on the solution you choose.

In this article, we’ll show you how to create your own blockchain network using the Corda platform as an example and why you should even consider building your new app on the blockchain.

What Is a Blockchain Network and How Does It Work?

At its core, a blockchain network is a distributed database or ledger that is shared among the nodes of a computer network. Unlike traditional databases, which are centralized, blockchain technology enables a decentralized approach to data management. 

This means that every participant in the network has access to the entire database and its complete history. No single participant controls the data or the information, and all participants can verify the records of its transaction directly, without an intermediary.

Blockchain Core Engines

But let’s start from the basics. What stands behind every blockchain network is a blockchain core engine. It’s the underlying technology and software that power its functionality.

The integration of blockchain core engines showcases a blend of cryptographic security and decentralized data management. They empower the blockchain ecosystem, ensuring data integrity and transparency across a network.

A distinctive feature, the previous hash, solidifies the chain’s immutability by linking blocks in an unbreakable sequence, fundamentally different from a centralized database. This architecture underpins the trustless environment of blockchains, where consensus algorithms validate transactions without a central authority, highlighting the seamless combination of these elements to maintain a secure and efficient system.

The Structure of a Blockchain

A blockchain consists of multiple blocks chained together in a sequential manner. Each block contains a number of transactions that have been verified by participants in the network. The key to understanding blockchain technology lies in grasping how these blocks are created and linked together.

The Genesis Block and Block Linking

The genesis block, or the first block in a blockchain, is special because it does not have a preceding block. After the genesis block, every block that is added to the chain has a reference to the previous block, usually in the form of a hash.

This previous block hash acts as a digital fingerprint, uniquely identifying the preceding block and its contents. This mechanism ensures the integrity of the blockchain: if any information in a previous block is altered, the hash of the altered block would change, making it evident that tampering has occurred.

Verification and Security in Blockchain

Each time a new block is added to the chain, it undergoes a verification process by network participants, often referred to as nodes. This process involves solving a cryptographic puzzle, known as proof of work in many blockchain networks, which helps to secure the network and prevents fraudulent activities such as double-spending. Once a block is verified, it is added to the blockchain, and the information it contains becomes part of the public ledger.

What Are the Benefits of Creating a Blockchain?

Banking, healthcare, agriculture, software development, and plenty of other industries are either already using or planning to use blockchains in the future. It’s estimated that using blockchains could boost global GDP by $1.76 trillion by 2030. 

benefits of creating a blockchain network

What exactly can blockchains help businesses with? 

  • Increasing security and speed of transactions by storing the data in a decentralized blockchain rather than a single database
  • Decreasing business operational costs and simplifying processes (for example, in logistics and supply chains)
  • Giving far greater data transparency than ever before with the data being immediately updated and shared between all nodes
  • Protecting business data from manipulation as the ledger nodes can’t be edited after being added to the blockchain.
  • Since blockchain works as a trustless environment (as in, a place where trust isn’t needed because every member of the network can verify every transaction and network on the ledger), it’s a much safer place to store sensitive business information. 

Software development is also taking advantage of blockchain technology to solve several issues with mobile and IoT app development. For example, with data security. Blockchain applications (called decentralized applications or Dapps) have the entire data encrypted with a cryptographic hash and all changes visible to everyone in the network, thus making the apps far more secure. And as every node in the network has an exact copy of the information stored and any changes must be confirmed via consensus, the entire system is virtually tamper-proof and resistant to system failures. 

The increased security is just one of the benefits that businesses can use to stay ahead of the competition and attract more users to their products though. Many apps nowadays also let their users pay for items or services using cryptocurrency or special platform tokens – and the interest in those methods of payments is also growing as 39% of consumers believe cryptocurrencies should be used for payments, not just investment. 

How to Choose a Blockchain Platform 

If you want to add cryptocurrency payments to your new app or start hosting data on the blockchain though, first you need to choose one of the main blockchain solutions. There are at least 1000 blockchain platforms on the market – Ethereum, Ripple, Stellar, or Corda, just to name a few.  Which one out of all those should you pick? 

We covered the main factors you should especially pay attention to when researching your blockchain solution in our other article, choose the best blockchain platform – the must-know blockchain platforms list.

Step-by-step Guide on Creating Your Own Blockchain

Building blockchain from scratch is an ambitious project that requires a deep understanding of this technology. The endeavor is also tightly connected with your business profile, as various blockchain projects call for unique approaches. Yet, regardless of what your niche is, you can use these simple steps as your blockchain development base.

Define What You Need

As mentioned above, while developing your blockchain solution, you may easily get distracted by the number of features offered by various blockchain engines. It would be a good idea to first research and note down your goals, plans, and expectations for the blockchain solution. Before choosing, you should consider:

  • Whether you are okay with using a public blockchain network open to all users or you need a private blockchain available with invitations built only for your company. 
  • What features you need for your business.
  • How many transactions you expect to pass through the blockchain.

Pick the Consensus Mechanism

Another thing worth giving thought to is a consensus mechanism. In short, it is a method in which the agreement between certain nodes is established. The most common ones are Proof of Stake and Proof of Work, but some less popular variants can turn out suitable for your business objectives.

Choose Your Own Blockchain Platform

To effectively select a blockchain platform that meets your business needs, it’s imperative to conduct thorough research and consider various factors, as outlined in our previous article. Your decision will significantly influence the composition and expertise required of your blockchain development team.

Although the right choice may not be immediately apparent, leveraging the guidelines we’ve provided will assist you in identifying the most suitable platform. Carefully weigh each option against your specific business requirements to ensure the chosen solution aligns perfectly with your objectives.

Determine the Node Configuration

Deciding on the configuration of your nodes is crucial and will influence your project’s future direction. This stage involves several critical decisions, including whether your network will be permissioned or permissionless, the programming languages to employ, and other factors that could impact development.

You’ll also need to consider where your blockchain nodes will reside—whether on cloud services, in-house servers, or a hybrid setup. It’s vital to examine all possibilities carefully, weighing them against your project’s aims, available resources, and financial plan.

Design the Blockchain Architecture

The architecture of your blockchain is pivotal. You’ll need to decide between setting up a centralized or decentralized network, how it scales, and its approach to data privacy and security. It’s also important to think about how well it plays with other blockchains and systems, particularly if your blockchain will need to interact or share data with outside platforms.

Develop And Test Your Blockchain

Transitioning into the development stage, you’ll be engaged in crafting smart contracts, constructing the frontend and backend for your apps, and weaving your blockchain into current systems as needed. Testing should kick off early and persist throughout this phase, encompassing unit, integration, and performance tests. This ensures your blockchain runs smoothly across varied scenarios and can manage the anticipated volume of transactions.

Deploy And Monitor

After thorough testing and security vetting, your blockchain is ready for deployment. This could mean launching a private blockchain within your organization or a public one accessible to a broader audience.

Post-deployment, continuous monitoring is essential to ensure the network operates as intended, to track performance issues, and to detect any unusual activities that could indicate security concerns. Tools and platforms are available to assist in monitoring the health and performance of your blockchain.

How to Build a Blockchain Network – Corda Example

Now, we will be going into some technical details on what you need to create your new network and how you can make a new blockchain yourself. For the guide, we chose Corda since it is well-documented and relatively easy to extend, so it should give you a good understanding of how to set up a blockchain network.

Corda is a permissioned peer-to-peer (P2P) distributed ledger technology that was initially designed mainly for financial institutions to help them reduce operational costs while speeding up transaction processing. But the platform turned out to be equally valuable for other industries. In healthcare, for example, Corda is used to connect the various healthcare databases and build a single, updated patient profile. And as the records are stored in time-stamped, encrypted, and immutable blocks in the chain, there’s little risk that someone unauthorized could access or alter the data inside those.

Corda is also gaining popularity in a variety of industries, including digital assets, identity verification, and government sectors.

We picked this platform for the guide for a couple of reasons:

  • Thanks to P2P architecture and the “building blocks” app architecture, it’s easy to scale.
  • Corda works as a private network (only people who you invite to the network can join it), so it’s great for hosting sensitive business data on it.
  • Corda platform is very agile and flexible, so companies can build their app and network exactly the way they want it 
  • Thanks to integration features dedicated to enterprise systems, the blockchain can be easily connected to the company’s main tools.  
  • Since Corda has a large community centered around the platform, it receives regular updates and enhancements.
Corda blockchain platform infographic

What Are CorDapps?

CorDapps (Corda Distributed Applications) are applications that run on the Corda platform, through which the nodes in the Corda network can communicate and take actions. To work, they need to be installed on the Corda nodes.  

The applications can be written in any JVM-compatible language, so if you are familiar with Javascript or Kotlin programming language, you shouldn’t have much trouble creating your own. What makes building those Dapps even easier, is that they can be built faster using the available app templates that users can customize, and later, developers can also quickly add new features through the modular API.

A CordApp is made of three main elements:

  • States: A state is an immutable object storing a fact known by one or more Corda nodes. They can hold any kind of data – from identity information to KYC data, stocks, and so on. The states are also immutable, which means that neither of the previous blocks can be edited – instead, all changes are added as new blocks.
  • Contracts: Corda Contracts are written in Java or Kotlin and define the transaction or data validation criteria. If both the input state and output state confirm the transaction as correct, then the transaction is accepted and added to the ledger. Otherwise, the transaction is denied. One CorDapp can store one or more contracts related to one or more states on the network.
  • Flows: A Corda flow is a sequence of steps that tells a node how to add the data to the ledger, for example when issuing an asset or settling a trade. But rather than forcing users to take those steps manually, Flows can automate those tasks. Corda also gives developers a ready library of flows for handling the most common tasks, meaning that developers do not have to write those themselves.

Joining a Corda Network

Now that we’ve looked at Corda from the inside, let’s talk about the network and how you can join it yourself. The Corda network is made of nodes, aka users who were invited to join the network. Each node runs an instance of Corda and one or more CorDapps installed on the node.

What makes Corda different from other distributed ledgers is that communication between nodes is point-to-point, and data is only shared if needed. Since the nodes in a network can send messages directly to each other, there’s no need for sharing the data between every node in the network. And if the recipient is offline, the message will wait in an outbound queue until they are online again – pretty much like an email. 

Their consensus algorithm is also different from other blockchains as Corda uses two – one to ensure that the ledger updates are unique and the other to verify whether the update is valid. Thanks to those, Corda doesn’t need to use proof-of-work or proof-of-stake algorithms like other blockchains.

As for how the network itself works: inside the network, there are four categories of nodes, with different roles to perform in the blockchain network. Those are: 

  • Network map: The network map node allows nodes to discover and connect to other compatible nodes.
  • Notary: Notary node is responsible for verifying the input state in each transaction and either signing or rejecting the transaction. The notary also acts as the time-stamping authority.
  • Oracle: A node that supplies external information to smart contracts and works as a bridge between the ledger and the outside world. Basically, it gathers the requested outside information, confirms or disproves it, and relays it back to the node. If the information gathered matches the terms inside a smart contract, Oracle can then automatically execute it. What’s important is that the oracle doesn’t need to see the contents of the entire agreement – only the part it needs to validate.
  • Regular nodes: Separate users that can communicate with other nodes, notaries, and oracles and accept updates to the ledger.
Corda blockchain platform nodes categories

Each node in the network has an identifying name and a public address, through which the node can communicate with other nodes in the network. For that, the nodes use the network map service that 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 must register on the R3 network. If you don’t have an account on R3 yet, then you need to first fill out the form with the following questions answered:

  • Are you planning to build a new Corda application, already have a ready one, or want to use an existing blockchain application?
  • If you have a running application, you need to write what is its name and purpose.
  • Are you planning to use Corda Open Source or Enterprise version?

Then, an R3 representative will reach out to you, discuss your needs and pricing for using the platform, and help you with the onboarding process.

Once this is done, you can register yourself on the network – keep in mind though that since Corda is a permissioned blockchain network, your registration must be approved first.

After that, you’ll have to fill in some technical requirements, such as configuring and deploying your node and then registering it to the service – you can find all the requirements and steps in the Corda onboarding tutorial.

When to Hire a Blockchain Development Expert?

If you have a good grasp of Java or Kotlin language, then creating your own app and setting up the network on Corda without any help from a blockchain developer shouldn’t give you much trouble.  

If you don’t have time to do the coding yourself though or want to speed up the development process of your new app, then your best bet would be to reach out to a team of blockchain developers who can help you with designing and setting up your network. 

As we worked on multiple applications that included building blockchain networks or adding support for a cryptocurrency (for iGaming, sports betting, MedTech, and fintech industries), we know the sector basically like the back of our hand. 

So whether you are thinking about building a blockchain app or setting up a private network for your company, there’s a good chance a blockchain developer or the whole development team from CrustLab can help you with it. 

Trust the Best Blockchain Developers to Create a Private Blockchain Network for You!

With so many things you can do with blockchain technology and the features it can offer, we’re sure that this technology is only going to get more popular in the future, and a blockchain application will be a standard solution. Whether you are working in the business, finances, or healthcare industry, the implementation of a blockchain network can give you plenty of benefits, starting from higher than ever before data security to much faster transactions with full transparency.  

Our guide above should help you a bit in introducing your business to the blockchain industry. And if you have any doubts or questions, we are blockchain developers on board ready to answer those – or help you move forward with your first blockchain project.

Contact us and get a free project estimation!

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