Ethereum Development Insights for Blockchain Application Developers

Businesses, especially in the financial sector, are increasingly adopting Blockchain application development to go to the next level of competition. Most blockchain developers know what Ethereum is. However, they must understand its intricacies before adopting it.

To start with a brief introduction, Ethereum is a blockchain-based computing platform for developing decentralized applications. As more and more players in the financial and banking sectors try to leverage blockchain, they can’t keep themselves immune from Ethereum, its benefits, and its challenges.

Why Ethereum?

When there are too many alternatives for a platform, developers generally evaluate the benefits to select the best option. Many blockchain development platforms have also evolved in the last few years and we must accept that Ethereum is not the only player in the market.

The top alternatives to Ethereum include Avalanche, Solana, Polkadot, Cardano, etc. Each of these has its advantages and limitations. So, each requires a complete blog to describe its capabilities. Here, we are focussing just on Ethereum to understand why businesses choose Ethereum.

What Are the Benefits of Ethereum Development?

To continue our discussion on Ethereum, without wasting any time, let’s move straight to the benefits of this platform for developing blockchain applications.

Decentralization

Ethereum offers decentralized network functionality which ensures that no single authority has control over the network. Thus, this network is protected from fraudulent access, manipulation, or even downtime. Decentralization makes the network faster and more efficient. It will help banking and finance services reach the remotest of areas in the world. Decentralization is all set to bring a trend shift to the finance industry with the Decentralized Finance concept (DeFi).

Suggested Reading: How is Blockchain Technology Changing the Face of Finance?

Design

Ethereum is designed such that it allows the developers the flexibility to develop varied applications with EVM (Ethereum Virtual Machine). EVM is a runtime environment that enables programming agreements, contracts, dApps, cryptocurrencies, and other blockchain applications. Thus, businesses are exploring Ethereum for innovative and advanced applications.

Tools and Resources

Ethereum has a variety of tools, libraries, frameworks, etc., available for developers to try different applications from basic to complex levels. More tools are joining the list giving developers the flexibility to evaluate and select the best based on their requirements.

Community Support

Ethereum is popular as a blockchain that allows anyone to participate in the network without the need for permission from a central authority. Thus, it is being used for global applications now.

Ethereum developers from all over the world are experimenting with this platform, developing it, and sharing their knowledge with each other. For troubleshooting, you can join various community channels including social media and support forums. Ethereum’s supportive documentation further contributes to its popularity.

Building Smart Contracts

Although Ethereum can be explored for different applications, it is largely being used to implement Smart Contracts. Smart Contracts are self-executing contracts or agreements where the terms and rules are programmed into the system and so the parties must abide by them. Smart Contracts also eliminate the need for intermediaries which helps in reducing delays and errors.

More and more businesses are opting for this new way of developing self-executing, transparent, fast, and cost-effective contracts that cannot be tampered with. Ethereum, with all its qualities, has given a huge boost to blockchain development companies and Smart Contract applications.

Challenges in Ethereum Development

Business success is defined by the ability to manage challenges and deal with failures. For this, every businessman or technologist weighs the pros and cons before selecting a technology. However, it is not always possible to ignore a technology despite its cons, so better be prepared for the challenges and work to mitigate them.

Here’s a quick look at the challenges in Ethereum development.

Scalability

Blockchain is generally used in large network requirements. Ethereum poses limitations to the number of transactions per second on the network. High network congestion due to large volumes of transactions causes delays. This results in high costs. Thus Ethereum is challenging when it comes to scalability. , scalability is a prominent need in the banking and finance sectors. So, when developers need more scalability, they opt for Layer-2 scalability solutions such as Rollups.

User Experience

We understand the significance of user experience in making applications successful. However, no matter how popular Ethereum is, developers have to struggle to deliver a user experience that can make the users value its applications.

For non-technical users, developers must work harder and build systems that are self-explanatory and user-friendly. Also, irrespective of the internal complexity of the system, the user interfaces must be managed well. Building high-quality user experience in applications is not impossible and the best Ethereum developers can deliver despite challenges with this platform.

Knowledge of Tools & Resources

Ethereum development involves using specialized tools such as the following.

Developers must keep them updated with skills in handling these tools. Moreover, they must also keep themselves aware of recent trends and emerging technologies in Ethereum development to be able to leverage the tools better. This is actually a big challenge.

Considering that blockchain technology and its development environments are comparatively new and so more challenging, it is difficult to find resources to learn and master the tools and technology associated with it.

Suggested Reading: Blockchain Development - Trends and Technology

Costs

The high transaction costs of blockchain systems, including Ethereum are much talked about in the market. It is important to optimize these costs using proper coding, reducing excessive operations, and optimizing data storage as well as memory usage. And, all of it is not as simple as it sounds!

Security

I know that the mention of security in this section of challenges has shocked you! As such blockchain applications are well known for their security. But developers still have questions in their minds!

Can Ethereum, which is used to implement smart contracts, be vulnerable to security risks?

All technology-based systems are vulnerable to potential security threats. So is Ethereum! However, Ethereum developers are working hard to protect the system against threats. We can hope that the technological advancements and Ethereum updates will incorporate security gradually dealing with the risks and threats. Moreover, the top Ethereum developers know how to implement best security practices using this platform.

Upgrading Smart Contracts

Upgrading Smart Contracts is challenging with its well-knit, complex system of handling user data and token migrations. Developers must ensure a smooth transition and backward compatibility while upgrading the contracts.

Regulations

Blockchain systems are widely being adopted in the financial sector. We know how crucial it is to comply with regulations in this sector. Being lenient towards statutory compliance and regulations can cause legal problems for businesses.

Blockchain is now largely being developed for global systems, and so the regulations we incorporate must also satisfy jurisdictional requirements. Taking care of regulations related to data privacy, transactions, compliance, user rights, business obligations, and regional specifications is not an easy task. It becomes an ongoing challenge as regulations keep adding and changing across the globe.

Testing and Debugging

Decentralized environments have their advantages and disadvantages. Testing is a big challenge in such environments. For a long time, developers have strived hard to develop centralized environments that enable testing uniformly, remotely, from anywhere.

Now, with decentralized systems, testing also has to include all the fragments to be tested separately at different points of access while still complying with the requirements of the entire system.

Using the right testing tools and practices can significantly help mitigate the testing challenges. Also, most smart businesses outsource application testing to the top testing service providers that ensure that every aspect of testing is taken care of, despite the challenges.

Ethereum Development - Future!

The future of Ethereum development is more than bright. It has the potential to transform the financial and banking sectors and bring much better efficiency, transparency, cost-effectiveness, and trust.

After crossing significant milestones, Ethereum is now part of the development of a variety of blockchain applications. Ethereum development trends continue to grow and change for the better and we can expect that Ethereum will be a major propagator of application development for different purposes such as the following in this and the coming years.

Wrapping Up!

Businesses in different fields are making plans to leverage blockchain and Ethereum development. However, those in banking and finance can’t ignore this technology at all. So, more and more banking and finance businesses are venturing into blockchain technology. Through this blog, we are trying to introduce you to the benefits and challenges of Ethereum development. Hope this helps!

Not all developers can handle blockchain development with ease. So, you must hire the best blockchain developers for your next project. And, if you choose Ethereum, you must specifically go for Ethereum development companies. Goodtal helps you find the best developers in every field. So, get going!