Originally published in the NOWNodes blog.
The entire e-commerce industry is experiencing an unprecedented boom in the use of blockchain technology. It is in line with the worldwide surge in blockchain technology observed over the past decade. The usage volume of blockchain technology was almost zero in early 2012. But the size of the bitcoin blockchain grew exponentially to reach a figure of almost 250,000 megabytes in 2019. That’s a considerable rise.
Regular promising technological innovations and the development of new usability features made blockchain popular today. It went from being a good-to-have technology to something indispensable. Thus, an option to pay in cryptocurrency is essential today and many companies around the world started accepting crypto payments.
There’s no doubt that blockchain became known by the masses because of cryptocurrencies. But, it is important to understand the distinction between these two. Blockchain is the technology on which different cryptocurrencies are developed.
Blockchain can be imagined as a ledger that is unique in the way that the information in the ledger is spread between every user. Every bit of information is encrypted. Since the ledger is not maintained or managed by a single entity, like the accountant in a traditional accounting operation, Blockchain is ideally decentralized.
A strict regime of hash encryption increases the level of privacy of an already decentralized system by manifolds. To hack the encrypted system of blockchain, one needs to attain an unimaginable level of computing power. So much so that facilitating cryptocurrency transactions proves profitable than the attempt to hack it. Yes, it is that hard!
Essentially, blockchain is the technology that equips the world with a unique power of creating an online ledger. The great thing about it is that it’s secure as well as decentralized.
Apart from developing cryptocurrencies, this capability proves effective in facilitating smart contracts, banking, or logistical networks, and many more. This technology can also be used efficiently to deal with privacy-sensitive data, especially in the government sector, such as voting records or medical information of individuals.
Like all other ecosystems, the blockchain ecosystem is a composite of all the stakeholders involved and all the possible transactions between them. These include cryptocurrencies, exchanges, trade and investment markets, transaction facilitators like wallet services, and infrastructure providers like data storage. It also includes software developers building solutions for cryptocurrencies and other areas such as contract making or logistics.
The usability features and the areas of blockchain implementation make it amply clear that integrating blockchain is a must-have for businesses and projects these days. However, it is cumbersome to develop a new system each time some project or business intends to incorporate blockchain in their existing process.
API is the acronym for an application programming interface. An API for blockchain implies such an interface that interacts with a blockchain node or a client network for the user to gather data from it.
In terms of real-world applications, such blockchain APIs are similar to an app that we use to book tickets, cabs, or a hotel. An API in the world of blockchain can be used to create a communication interface between a cryptocurrency exchange and a user application.
Cryptocurrency APIs serve several purposes such as completing a transaction, trading in the market, managing an account, etc. Over and above, the use of blockchain API also relates to the domains of analytics and security.
APIs can be used to complete entirely private and highly secured transactions in cryptocurrencies. It makes it possible to access highly-secured crypto transactions without having to go through the strenuous process. Otherwise, the manual process is very complicated and takes a long time to complete.
APIs also come handy in the domain of crypto trading. Most of the crypto exchanges provide their APIs to gather as much information as possible before trading. These, in turn, ensure the highest probability of making a profit on the trade.
Apart from the traders, there are data aggregation platforms that use these crypto exchange APIs to compile important data and then disseminate it through their APIs. There are other agencies, such as ICOs, and investment and crowdfunding platforms, that provide their APIs.
The most important factors here are the technology to be used, the scale of the project, and the budget allocated. Depending on these, one may choose an API that fits their needs in the best manner possible.
The technology of a blockchain API is a complex function of libraries, architecture patterns, and programming languages guided by the choice and preference of the developer working on it.
APIs developed on open-source codes are considered the most secure by the developer community. Any open-source code can eventually be tested by anyone. It makes the code immune to any infiltration. This is a very important feature that you must look for in the API that you are planning to use.
Bitcoin is the most popular among the available cryptocurrencies. It is supported by most of the credible APIs available in the market. However, with other cryptocurrencies increasingly occupying a larger share of transactions in the market, an ideal API should support payments through a diverse range of other cryptocurrencies as well. Examples of such cryptocurrencies can be Ethereum, Ripple, or Tether.
An efficient API should specifically support Ethereum, apart from Bitcoin. Ethereum is a cryptocurrency that not only helps to trade but facilitates smart online contracts as well. Apart from facilitating trade, Ethereum serves several other functions as the development of decentralized apps and dealmaking.
However, there are some limitations to the Ethereum network. It is slow and expensive. It is not advantageous when large volumes of data go through it.
To summarise it all, the way of choosing the perfect blockchain API is similar to walking on a rope balancing between the requirements of the number of transactions to be completed in a specific interval and the number of records generated.
However, when examined from the perspectives of security, protection, and privacy, a blockchain API is any day better from the non-blockchain ones which are otherwise faster and more productive.
If you have any questions about blockchain APIs, then you can surely reach out to us. NOWNodes is a market leader when it comes to blockchain APIs. Are you a startup founder or owner of an established large business? You can leverage our block explorer APIs to make your ideas come to life.
Choose any Nodes or Explorers that meets your needs and suits your goal. Contact us today for a chat or call and we will answer any questions that you may have about our blockchain APIs.