The blockchain revolution is gaining momentum, extending beyond its initial association with cryptocurrencies like Bitcoin. This transformative technology is being adopted across various industries, including healthcare, real estate, insurance, global logistics, and energy sectors. Its capabilities in enhancing transaction transparency, mitigating fraud, and bolstering security, all while being cost-effective, are proving to be game-changers for businesses worldwide.

Blockchain's potential is reflected in its market growth. Valued at $3.67 billion in 2020, the blockchain technology market is projected to expand at a staggering compound annual growth rate (CAGR) of 82.4% from 2021 to 2028. This explosive growth has attracted major corporations such as Pfizer and Walmart and numerous startups keen to harness blockchain’s capabilities.

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However, this rapid expansion poses a significant challenge: the shortage of skilled blockchain developers. LinkedIn data shows that job postings in the U.S. featuring "blockchain" and "cryptocurrency" terms surged by 615% between August 2020 and October 2021. Studies suggest that for every blockchain developer available, there are 14 job openings, which drives up salaries and creates barriers for companies trying to build internal blockchain teams.

In response to these challenges, many companies are turning to outsourcing as a strategic solution. Here’s an in-depth look at the advantages and potential drawbacks of outsourcing blockchain development:

Pros of Outsourcing Blockchain Development

Cost Efficiency: One of the primary benefits of outsourcing blockchain development is the significant reduction in labor costs. In countries like the U.S., blockchain developers command a median salary that is 61.8% higher than the average for other roles. Outsourcing to regions with lower living costs, such as the Philippines, can cut employment expenses by up to 70% while still delivering high-quality work. This cost-saving advantage allows companies to allocate their budget more effectively and achieve a higher return on investment.

Speed and Agility: Building an internal team for blockchain development is often a time-consuming process. It involves posting job ads, reviewing applications, conducting interviews, testing candidates, and finally onboarding new hires. This lengthy process can delay project timelines. Outsourcing, on the other hand, allows companies to quickly access a pool of pre-vetted experts. Established outsourcing firms can deploy experienced developers immediately, significantly accelerating project timelines and ensuring faster delivery.

Specialized Expertise: Blockchain technology is complex and requires a specialized skill set. General developers may not possess the in-depth knowledge needed to handle blockchain-specific challenges. Outsourcing to firms that specialize in blockchain development ensures that you are working with experts who understand the nuances of the technology and can address unique project requirements. This specialized approach often results in higher quality and more innovative solutions.

Efficient Team Assembly: Building a complete in-house blockchain development team—from project managers and business analysts to UI/UX designers and cryptography experts—can be daunting. The process of recruiting and integrating multiple roles is complex and time-consuming. Outsourcing allows companies to quickly assemble a fully functional team, providing a comprehensive solution that covers all aspects of blockchain development. This capability is particularly advantageous for companies new to blockchain or those with tight deadlines.

Strategic Focus: Outsourcing blockchain development allows companies to offload various administrative and operational responsibilities, such as office space, equipment procurement, and employee benefits, to the external provider. This arrangement frees up in-house staff to focus on strategic initiatives and core business functions. By handling the operational details, outsourcing firms enable companies to concentrate on higher-value tasks, enhancing overall efficiency and productivity.

Cons of Outsourcing Blockchain Development

Loss of Control: Outsourcing involves ceding a degree of control over the development process. Managers accustomed to overseeing every aspect of a project may struggle with this shift. Effective outsourcing requires trust and clear communication. It necessitates delegating tasks to external teams and providing detailed briefs to ensure alignment with project goals. Managers must adapt to a model where they rely on the expertise of the outsourced team and trust them to deliver results.

Communication Barriers: Effective communication is critical to project success, and outsourcing introduces potential challenges in this area. While many offshore teams, particularly those from the Philippines, are known for their strong English skills and technical expertise, ensuring seamless communication remains essential. Companies must establish clear channels of communication and manage time zone differences to avoid misunderstandings and ensure project alignment.

Security Concerns: Outsourcing involves sharing sensitive information and intellectual property with external parties, which can raise security concerns. To mitigate these risks, it is crucial to work with reputable outsourcing providers and establish comprehensive non-disclosure agreements (NDAs). Companies should ensure that their outsourcing partners have robust security measures in place to protect data and intellectual property.

Deciding to Outsource Blockchain Development

The decision to outsource blockchain development is not one-size-fits-all. It depends on various factors specific to each organization, including the complexity of the project, existing internal capabilities, and time constraints. For organizations new to blockchain, lacking in-house expertise, or facing tight deadlines, outsourcing can provide a strategic advantage by offering access to specialized skills and cost savings.

Many companies are also exploring hybrid models, where blockchain experts handle the technical aspects of development while in-house teams manage traditional functions such as UI design. This approach allows companies to leverage external expertise while gradually building internal capabilities for future projects.

EDUTO: Your Blockchain Development Partner

As businesses seek to navigate the complexities of blockchain technology, partnering with the right outsourcing provider becomes crucial. EDUTO, a startup outsourcing company based in Vietnam, stands out as an exceptional choice for blockchain development needs. With a strong track record of delivering high-quality, cost-effective solutions, EDUTO provides a seamless blend of expertise and efficiency.

EDUTO’s team of skilled blockchain developers is well-versed in the latest technologies and industry best practices. By leveraging their extensive experience, EDUTO helps companies overcome the challenges of blockchain development while ensuring timely and secure delivery of solutions. Their commitment to excellence, combined with their competitive pricing, makes them a valuable ally for businesses looking to harness the power of blockchain without the overhead of building an internal team.

Contact us: EDUTO Website

In conclusion, outsourcing blockchain development presents a compelling option for many businesses, particularly those seeking to overcome skill shortages and accelerate project timelines. By carefully evaluating their specific needs and selecting the right outsourcing partner, organizations can effectively harness blockchain technology to drive innovation and achieve their strategic goals. As blockchain continues to revolutionize industries, developing a well-considered outsourcing strategy will be key to leveraging its full potential and securing a competitive edge.