Blockchain is transformational. This extraordinary technology of distributed ledgers has the power to revolutionise and redefine a large number of businesses, sectors, and industries in the near future, fundamentally changing how people engage and transact with one another. While it won’t solve all the world’s problems, we’re only just getting started understanding the many powerful use cases it can provide.
Blockchain-based technologies such as decentralised finance (DeFi), and non-fungible tokens (NFTs), alongside cryptocurrencies, are most likely going to form the future of our financial system, a significant upgrade on the antiquated one we have at the moment. It is, as stated in the opening paragraph, a revolution, and developers have the chance to be at the cutting edge of that.
It is also a lucrative career path. Billions upon billions of investment fund money is pouring into this space, with worldwide spending on blockchain solutions expected to grow from 1.5 billion in 2018 to an estimated 15.9 billion by 2023, while the combined market cap of cryptocurrency globally is approaching $2 trillion.
In the United States, a blockchain developer can already expect to earn anywhere from $85k – 150k per year, depending on their experience, and are also in the position to get a head start on many of the new opportunities that will present themselves, allowing them to recognise early stage projects likely to succeed, and to invest accordingly.
There are two different types of blockchain developers: core and software.
- Core blockchain developers develop and maintain the architecture of blockchain systems. They also design protocols, develop security patterns, and supervise the network as a whole.
- Software blockchain developers build new applications onto existing blockchain platforms, such as NFTs, etc. They also handle front-end and back-end development, design, and maintenance.
Let’s look at these basics in some more detail:
5 Things Blockchain Developers Need to Know:
1. Blockchain Programming Languages
2. The Fundamentals of Blockchain Technology
Understanding the foundations of blockchain technology is crucial for developers. At its core, a blockchain is a type of distributed ledger technology (DLT) – a protocol made up of three ‘layers’ (layer 0, 1, & 2) that enables the functioning of a database with no central administrator, with blocks of data spread across multiple locations or entities.
3. Blockchain Consensus Mechanisms
Arguably the most important invention of blockchain is the consensus mechanism – the procedure by which a decentralised peer-to-peer system, with no central authority, makes decisions and ensures that records in the ledger are trustworthy. The two best known are proof of work (PoW) and proof of stake (PoS).
The energy intensive proof of work uses computational power (via miners) to solve complex mathematical equations. In return for their industry, the miners are rewarded in Bitcoin, which is powered by PoW. The whole operation ensures that the blockchain is both secure and accurate, providing a reliable and decentralised means of verifying transactions on the network.
Proof of stake requires users to stake coins, which are then randomly selected by validators. It offers an alternative to PoW with significantly less energy costs as it doesn’t require miners to spend electricity on duplicative processes (competing to solve the same puzzle). However, it is less reliable, and has been known to breakdown during high volumes of transitions.
4. Hashing Functions
Hash functions are used to write new transactions into the blockchain and to ensure the data encoded is secure. These functions ultimately provide the ability for blockchain to remain a permanent history of transactions. On the flip side, it is also why blockchain development is more difficult than programming in centralised ecosystems. Learn more here.
5. Gas, Miners, and the Cost of Running Smart Contracts
Essentially, gas refers to the cost necessary for a transaction to be run on the Ethereum network. Miners, who are responsible for the network, set the supply and demand by deciding how much gas is needed to process transactions and other smart contracts.
Although Ethereum is incredibly popular, its gas fees are often cost prohibitive. Working towards making gas more cost friendly while also supporting miners fairly, is a priority for many developers in the crypto sphere.
Breaking Into the Blockchain Developer Community:
Say that you have now familiarised yourself with these vital concepts and developed new skills, the question then becomes – how do you break into the blockchain developer community? The answer is to go where they are, and blockchain creators mostly meet on Twitter and Discord.
You can check out these discord forums:
Space Station – Huge Ethereum server with mixed discussions.
SolidityDev – A community of solidity developers.
Crypto Devs– Mixed blockchain and crypto discussions.
Blockchain Developer Club – Not just Ethereum but also other blockchain devs.
Go on these social media sites and grab the attention of these prominent Web3 developers and thought leaders. Prove your knowledge by engaging with web3 developers and thought leaders on Twitter and Discord servers like Ethereum.org, Solidity, and CryptoDevHub. On both platforms, join in discussions, post interesting content, build relationships, and look for work opportunities. Also consider taking part in web3 hackathons and conferences to get yourself noticed.
Following the tips in this guide will hopefully at least provide a starting point for somebody looking to begin their journey to becoming a blockchain developer. Now is the time to act, to take your place at the forefront of tech innovation and be a part of this global transformation.
Now that we have delved into what it takes to be a Web 3 blockchain developer, in the next article we will look at the development tools available to them, discussing the languages used, frameworks, Integrated Development Environments (IDEs), blockchain node providers, and more.