What is the cost of blockchain software, cryptocurrency or a token economy project development?
A short answer: it depends.
This answer however isn’t very helpful for our customers and for those who try to figure out how to approach the budgeting of their blockchain project.
In most cases when you are about to embark on a blockchain / DLT (distributed ledger technology) journey you would already have some experience in contracting or delivering an IT project, for example a website or a mobile app. So your question really could be boiled down to these two:
- How is blockchain project different from a typical IT project that does not have blockchain or DLT components in it?
- How can I budget the difference?
Key questions to have answered:
Infrastructure costs: Are you going for public or a private blockchain?
Public means higher transactional costs. For example each data or transfer transaction on public Ethereum will cost a certain amount ($0.08, for example – but don’t take this value for granted as it keeps changing).
Private means lower / zero transactional costs, but higher hosting and maintenance costs. You need to host at least 3 nodes (starting around $200 x 3 = $600 per month). You will also require Tech Ops (Linux server administrator) personnel resources to maintain the infrastructure.
Software development: What is to be added on top of standard software development costs?
I have taken this screenshot from a Google search that gives a good illustration of various typical “blockchain” projects costs:
This may be a good indication for a typical cryptocurrency / ICO like / token issuance project, but there are a few problems with this:
1) Most business / enterprise use cases do not necessarily require an ICO / token sale
2) This isn’t helpful in terms of explaining what part of the development is blockchain specific and needs unique skillset vs standard backend and frontend development
3) There are ready open source solutions and platforms allowing to do this at lower cost
From my experience, the majority of “blockchain” projects, especially business / enterprise ones are not really that blockchain intensive. They still require conventional user facing (frontend) and server-side (backend) modules development which take up majority of the project time and costs. Blockchain specific coding where we actually talk about writing and deploying smart contracts (e.g. in Solidity programming language for Ethereum network) could often take under 10% of all technical development efforts.
You may be looking at +10% to you overall tech development costs to add blockchain into your project.
$25,000 figure is a good starting point but it’s really difficult to say without discussing specific requirements. Internal frontend and backend resources could be utilised to reduce the costs.
Public blockchain: transaction fees
Private blockchain: starting from $600 per month for hosting + TechOps human resource for support and maintenance.
Luckily there are both closed source and open source platforms and “blockchain-as-a-service” solutions available currently which leverage an existing technology hosted in a cloud allowing businesses and startups to experiment with blockchain tech, issue tokens and cryptocurrencies etc, all at a fraction of a cost.
Our Dappros Platform is one of such solutions, with “small business” plan as low as $299 per month including SaaS software license, updates, infrastructure hosting & maintenance, tech support and SLA. You can subscribe for your free trial account here.