Choosing the Right Blockchain Development Company: 12 Factors to Consider
Blockchain has become one of the most talked-about technologies of the 21st century, and for a good reason. From financial systems and supply chain management to healthcare, blockchain is transforming industries globally with its decentralized and transparent nature.
As blockchain continues to shift from the innovation and hype stage to a useful technology stage, more and more businesses are seeking external help with their blockchain development needs. While you don’t need geniuses with superpowers to start your blockchain journey, finding the right partner can be challenging. To help you make an informed decision, we prepared a comprehensive guide on how to choose a blockchain development company highlighting the essential factors to consider.
The Rise of Blockchain
Blockchain technology has emerged as a game-changer, offering unparalleled transparency, security, and efficiency. According to Grand View Research, the global blockchain technology market size was valued at $10.02 Billion in 2022 and is expected to grow to more than $1500 billion in 2030 at a compound annual growth rate (CAGR) of 87.7%. By end use, the financial services segment dominated the market in 2022 with more than 37.0% share of the global revenue, followed by the healthcare, logistics, and retail industries:
Factors to Consider When Hiring a Blockchain Development Company
Hiring a specialized blockchain development company brings numerous benefits to startups and businesses exploring blockchain solutions. Below are some key factors to consider before you choose the right blockchain development services provider:
Expertise and Experience
The first and foremost consideration when selecting a blockchain development company is their expertise and experience in the field. A company that has been in the industry for a while and has a proven track record of delivering successful projects is likely a better fit for your project.
Comprehensive Services
To ensure that all aspects of your blockchain project can be handled under one roof, the company should offer a wide range of services and cover key blockchain areas such as DeFi, GameFi, and NFT. And don’t be limited by blockchain technologies stack only, for a successful project execution the chosen company should also have traditional software development expertise and skills for effective support.
Strong Security Measures
Security is a critical aspect of blockchain development, given the sensitivity of the data involved. The chosen company should have a solid understanding of security principles such as encryption protocols and multi-factor authentication, and demonstrate a commitment to safeguarding your blockchain infrastructure.
Partnership Approach
Another important factor to consider when you choose the right blockchain development company is their partnership approach. Look for a development partner who will build a product with you, not for you. A collaborative relationship with clients is key to understanding their needs and meeting specific requirements, which results in a successful outcome.
Scalability and Future-Readiness
Blockchain area is constantly developing, and only companies that know the latest trends and where the industry is going can offer you future-proof solutions. For instance, a company that invests in research and development and has an R&D team and various proof-of-concept projects is more likely to stay ahead of the curve and deliver innovative solutions to clients.
Clear and Transparent Communication
A reliable blockchain development company should maintain transparent and open lines of communication, ensuring that your ideas and requirements are understood and incorporated into the final product. Clear communication channels and outlined steps of collaboration will provide a positive working relationship throughout the development process.
Strong and Diverse Portfolio
The foolproof way to choose the best blockchain development company is to take a close look at their portfolio. A strong portfolio for a blockchain development company would contain a variety of projects that showcase the company’s expertise in different blockchain areas of blockchain. This may include smart contracts development and audit, creating decentralized applications (dApps) and NFT marketplaces, and integrating blockchain technology with existing systems.
Skills to Look For In a Blockchain Development Company
When selecting the right blockchain development company, consider and evaluate the following key skills:
Proficiency in Blockchain Technologies
Expertise in popular blockchain platforms, frameworks, and protocols, will allow the company to choose the most suitable technology for your project.
Proficiency in UI/UX
Building a successful blockchain project is not just about technology. You must also consider the company’s UI/UX design capabilities since UX is one the main unsolved challenges that brings blockhain technology away from mass adoption. When your project is being developed, it is important to have cross-disciplinary specialists by side who understand blockchain specific and are capable of creating advanced solutions.
Integration Capabilities
Evaluate the company’s ability to integrate blockchain solutions with existing systems and third-party services. Your project will exist in the web3 ecosystem, but it also important to make sure that it fits the realities of web2 products, so that each operation and transaction runs smoothly.
Privacy and Anonymity
Privacy and anonymity are important considerations in many blockchain use cases. Therefore, a reliable blockchain development company should have expertise in implementing privacy-enhancing technologies.
Risks Associated with Hiring a Blockchain Development Company
While hiring a blockchain development company brings numerous advantages and benefits, it’s essential to be aware of potential risks and address them in advance. When selecting the right blockchain development agency, pay attention to these red flags:
Limited Understanding of Your Business Domain
The blockchain domain requires deep industry knowledge to design and implement effective solutions. If the development company lacks expertise in your industry, it may lead to incomplete or inefficient solutions.
Lack of Transparency
Some companies may overpromise and underdeliver, failing to provide transparent updates on project progress or meet agreed-upon timelines. Also, the blockchain sphere can lead you to a firm with poor compliance, lack of legal entities, and payments to private wallets. This may result in a company’s disappearance without the possibility of taking subsequent actions.
Code Quality Drawbacks
The outsourcing code should be as transparent and documented as possible so that it can be easily transferred to another team of experts. Otherwise, there is a risk of falling into the trap of vendor dependency.
Intellectual Property Protection
Address intellectual property rights and ownership in the contractual agreement to safeguard your interests and avoid disputes in the future.
Security and Privacy Risks
Outsourcing security risks is something you can never ignore. Discuss your security and privacy standards before you start working together and ensure that both parties agree on them. Choose partners from your network who have already worked with sensitive data.
Working with an External Company
When it comes to working with an external blockchain software development company, you have two main options: staff augmentation and vendor-managed models. Staff augmentation involves hiring additional developers to work alongside your existing team. This model is basically getting developers in-house but paying vendors for sourcing.
Vendor-managed, on the other hand, involves handing over specific areas of product development to an external company. This model can offer cost savings and faster turnaround times, and is often the preferred choice during the scaling stage of a project. It’s worth noting that true outsourcing involves working with an external company as a partner, establishing a collaborative relationship, and working in synergy with an internal team to achieve project goals.
How to pick the best blockchain development company for your project? The choice between staff augmentation and vendor-managed team depends on the specific needs, resources, and stage of your business. However, the managed team continues to be a preferred option, since businesses get the external company’s expertise in problem-solving along with developers.
Cost Consideration
The cost of hiring a blockchain development company varies based on factors such as project complexity, length of blockchain software development discovery phase, scope, engagement model, technology stack, and development hours. Establish a clear budget and have transparent discussions with potential partners to ensure cost-effectiveness and avoid financial surprises.
While cost is an important factor to consider, it should not be the sole determining factor when choosing a blockchain development company. Opting for a cheaper option can result in future expenses and put the success of your project at risk. We have experienced that some clients simply want to hire developers for a low price without considering the broader expertise and consulting services that the business could benefit from. We suggest prioritizing the factors listed in this guide above to choose a company focusing on the long-term success of your blockchain project.
Now you know how to choose a blockchain development company for your project.
This guide is brought to you by Dexola — a blockchain software development company focusing on startups and medium-sized businesses. To prepare the guide, we asked our clients what made them choose us as their technical blockchain development partner, and what skills and factors they’ve been looking for during their research process. The factors outlined in this article will help businesses avoid falling into various traps and make an informed decision when choosing a blockchain software development company.
Are you looking for a consultation on your blockchain project? Don’t hesitate to contact us, we’ll be happy to help.
