Blockchain Technology in web development has been in the market for a very long but got people’s attention during COVID-19. Due to its increasing demand and security aspects, it a huge buzzword in every IT sector. Today, global businesses are adopting blockchain technology which is the major factor in increasing blockchain technology development costs.
But, do you know how much it costs to develop a blockchain App?
Well, the answer is not a definite number. It depends on your purpose and your requirements for the app. If you want to dig deeper and find out what factors significantly affect blockchain development cost, then you are on the right page.
We have gathered all the stats and figures for you to understand how much you need to invest to make a next-gen, tech-led blockchain app. For that, we need to understand the blockchain market, factors affecting cost, and more.
Consistently Evolving Blockchain Market: A Quick Peek
Today, major market sectors are adopting blockchain technology to stay in the race. To compete with them, you need an out-of-the-box blockchain app that can significantly help your business grow and stand out. This is why there has been tremendous growth in blockchain projects globally.
As per Grand View Research, In 2022, the worldwide market for blockchain technology was worth $10.02 billion. This market is predicted to expand quite rapidly, with an average yearly growth rate of 87.7% from 2023 to 2030. This growth is likely because more and more investors are putting their money into businesses that work with blockchain technology.
As you can see the increasing trends of blockchain adoption over the last few years, blockchain development might not be easy. The cost will definitely rise going from simple to complex, tech-integrated apps.
So what do you think could be the average cost of developing a blockchain app? Let’s simplify the Blockchain app cost.
Cost of a Blockchain App Development
Different industries have different app requirements, features, and technologies to be used. So, what could be the rough estimate for you? No idea?
Well, on average, developing a Blockchain app can cost from $40,000 to $300,000, and beyond. Different factors contribute to the cost of blockchain app development, which we will discuss in the next section.
This is a rough estimate, these numbers can increase with the app’s complexity.
So as per your understanding, what could be other significant factors that can impact the blockchain development cost? Let’s explore those factors with us.
Top 5 Factors Affecting the Cost of Blockchain App Development
1. The size of the Agency
If you are outsourcing the development of your blockchain application, then the size of the agency matters a lot and can impact the overall cost of your app development. Generally, there are three categories of agencies in the market- Small Cap Agencies, medium-sized agencies, and Large Size Agencies.
Image Credits: Oyelabs
Small Cap Agencies- a group of up to 50 blockchain developers ready to bring your ideas to life. Although they might not be the most seasoned experts out there, their fresh perspective in the industry shouldn’t be underestimated. Plus, their competitive pricing provides a great opportunity for those on a budget. A word of caution though – if you have an exceptionally large or complex project, they might find it a challenge to manage. Choose them if you appreciate the hustle of growing talent and the freshness of new perspectives.
Medium Size Agencies- Blockchain App Development Companies boasting a battalion of 500-1000 blockchain developers. With their impressive resume of experience, they promise nothing short of quality service. It’s true, that their rates might be a step above those of the small-cap agencies, but what you invest in cost, you reap in assurance and expertise. Select them if you’re after a blend of solid experience and dedicated service.
Large Size Agencies- Large Size Companies featuring a staggering roster of 1000+ blockchain developers. Their wealth of experience is as vast as their team size, making them pros at handling sizeable projects with finesse. Their rates might be on the higher end, but in return, you’ll gain access to a powerhouse of knowledge and capability. Choose them if your project demands the might and mettle of the industry’s most seasoned veterans.
2. Industry-based Blockchain App Development Cost
Do you know, that Blockchain has made its impact on almost every industry in the market?
Considering blockchain app development, your industry decides the price tag. Take the banking sector, with its layers of complexity and need for tight security – developing a blockchain app here would naturally carry a higher cost compared to, say, the healthcare sector.
Similarly, the intricate web of supply chain management presents its own challenges that call for more advanced security features. As a result, it’s costlier to build a blockchain app here than it is for the more straightforward retail sector. In essence, the complexity and security requirements of your target industry directly influence the cost of your blockchain app development.
3. Complexity Level of Blockchain App
While creating a blockchain app, several factors come into the picture that must not be neglected. Such factors might increase the complexity of the app, resulting in increased cost.
So what factors define the complexity level of the Blockchain App?
Let’s discuss each factor in depth.
Goal- Before diving into blockchain app development, focus in on your ‘why’. Understand the user’s pain points, explore current solutions, and assess how a blockchain app could up the ante. Ask yourself – why does the world need this blockchain innovation and how can your app raise the bar? Answering these questions will guide your choice of development services. For any enterprise stepping into the blockchain arena, this initial clarity is invaluable.
Consensus Mechanism- Think of Consensus Mechanisms as the rulebook for how a blockchain network agrees on its information. There are a bunch of different types, like Proof of Work that Bitcoin uses, or others might use Proof of Stake, Delegated Proof of Stake, Proof of Elapsed Time, or Federated. Each type has its own balance of security, decentralization, cost, and efficiency, so it’s important to pick the one that fits your needs best.
There’s more to consider, such as who can use the system, how new assets are made and managed, how transactions are handled and confirmed, and the format of addresses and signatures. This is a big step, so if you’re new to all this, it could be a good idea to get advice from a company that specializes in making blockchain apps.
Platforms to Build Blockchain Apps- You can build blockchain applications on various platforms like Hyperledger Fabric, Ethereum, and others, each with its own special tricks and tools. The platform you pick will influence how complicated your application ends up being. So, it’s a bit like choosing the ingredients for a recipe – the choice directly affects the final dish!
Many businesses find it challenging to find the right platform for their blockchain app development. To make the choice easier, below is the checklist for choosing the right platform based on your requirements.
Image Credits: 101blockchains
Tools and Technology Stack
Below is the list of all tech stacks that can be implemented within each layer of blockchain.
Layer 3 (APIs)- Covalent, QuickNode, The Graph, Bitquery, Alchemy, and Biconomy
Layer 4 (Web3 and Web2 Dev Tools and Platforms)- Firebase, Supabase, and PlayFab
Layer 5 (Dapps)- DeFi dashboards, DEXs, identity and authentication dapps, NFT marketplaces, data handling dapps, MetaMask, and many others.
Every stack has its own good points and not-so-good points. This means you need to choose the best mix of stacks to make your development work really shine.
APIs- You’ll find many ready-made APIs out there that can help with the development process. But sometimes, you might need to create your own API for specific tasks like checking and keeping track of data, making key pairs and addresses, storing and retrieving data, or managing how smart contracts interact with the system.
UI & UX- After you’ve figured out all the backend stuff, it’s time to make a control panel for the UI and Admin. This is where you decide on the right front-end coding language, servers, and external databases for your app.
POC or MVP- Blockchain is still pretty new, so it’s often better to start with an MVP (Minimum Viable Product) approach. This means building and testing a simple version of your app that just includes the core features, rather than trying to build the whole thing at once.
4. Blockchain App Development Category
The world of blockchain applications basically splits into two categories.
Cryptocurrency-based Solutions- Imagine apps built using a system where everyone keeps track of all transactions together, with no need for a middleman. This kind of system is called a decentralized ledger. It can help keep costs down when developing blockchain apps.
Non-cryptocurrency-Based Solutions- These apps work a bit differently. They use a system where one main player is in charge of checking and approving all transactions. This is known as a centralized ledger. Because of this setup, it can be a bit pricier to develop these kinds of blockchain apps.
In short, whether the ledger is run by everyone or run by one can affect the cost and design of your blockchain application.
5. Blockchain App Development Services
The type of blockchain app services you need can affect the cost. Here are some popular ones.
ICO Development- Initial coin offerings, or ICOs, help blockchain startups get funding. It takes both tech and marketing skills to create an ICO, which can be expensive. Costs can include things like designing a website, writing a whitepaper, and creating a smart contract. Marketing an ICO can be costly too because you need to reach a lot of people. Expect to spend around $10K to $15K on this.
Smart Contract Development- Smart contracts are a big deal in blockchain because they let transactions happen without a middleman, saving on fees. However, creating smart contracts can be tricky and time-consuming. So when you’re planning your budget, remember to include around $5,000 for this.
Cryptocurrency Exchange Development- Building a place for people to trade cryptocurrencies can be a challenge, requiring high security and functionality, and that means higher costs. However, if you want your users to trade cryptocurrencies, then it’s a must-have. The cost for a basic exchange can range from $50,000 to $98,000.
Wallet Development- A crypto wallet holds users’ private keys, which lets them send and receive cryptocurrencies. Because this involves sensitive data, wallet development can be tricky and pricey. This could cost you about $15,000 to $150,000.
NFT Marketplace- Finally, there’s the NFT marketplace, a place where users can buy and sell non-fungible tokens (NFTs) online. These represent an authenticity certificate related to online or physical assets.
Remember, figuring out the exact cost of a blockchain app isn’t easy. You’ll first need to decide what kind of blockchain app you want for your business.
How Much Does it Cost to Hire Blockchain Developers?
With the increase in the development of blockchain apps, the demand for blockchain developers has increased.
A blockchain developer must possess various skills that also impact their cost.
Strong programming skills in Java, Solidity, Python, PHP, etc.
Web development skills
Proficiency in data structure and concepts
Skilled in developing smart contracts
Such a combination of skills also increases the developer’s cost. As per Codementor.io, the average and medium hourly rates of blockchain developers are shown in the below image.
All these costings can be improved and optimized if you choose the right agency offering better pricing with expertise in every domain of Blockchain app development.
Fast-track your Blockchain Software Development with OnGraph
No matter the size or complexity, we’re ready to assist with every blockchain development service your business requires. Our talented team, equipped with 15+ years of experience, creates decentralized blockchain systems that pave the way for new business strategies and ensure greater transparency in data and transactions. From crafting smart contracts to developing apps, OnGraph (a blockchain development company in the USA) offers a comprehensive range of blockchain development services.