Written by: Ratko

Blockchain Development: Hiring In-House teams vs. Outsourcing?

In recent years, blockchain has become the go-to stack for solutions in a growing number of industries, driving the technology behind cryptocurrencies, fintech products, supply chain systems, and beyond. It is building new and innovative business models at a rapid pace, quickly becoming the focal point of many startups and large companies worldwide. Due to its incredible potential, speed, and flexibility, experts have claimed blockchain is the technology of the future that could soon become integrated with our daily lives.

But what happens when your business finally decides to move on to a blockchain project? Is it better to hire an in-house team or to outsource? What are the benefits of buying as opposed to building products, and should you rent a specialized workforce rather than hire your own?

blockchain spending stats

Outsourcing Blockchain Development

While building blockchain products is similar to creating any other software solution, it requires varying levels of vitally important subject-matter skills. As a result, there is an expertise gap among those involved in the development. All the while, nearly 60% of major corporations have their sights set on blockchain technologies, according to some reports. What’s more, many Fortune 500 companies and world banks are racing towards new blockchain-based solutions, while talent is still hard to find.

The Skills Gap

Recent statistics also reveal that, on average, there are fourteen jobs for each professional blockchain developer. It’s a startling figure for those who are aiming to build in-house teams.

Blockchain is swiftly moving past the cryptocurrency sector and into other industries such as healthcare, data sharing or insurance. Moreover, reports say that the technology will become a major component in the capital market system by 2025. However, while many companies are jumping ahead to create internal teams without considering outsourced development, statistics and various business challenges tell a different story.

Odds are that the blockchain talent gap will not be filled by 2025. In fact, it could take much longer than that. That is a significant issue and it’s among the leading reasons why the launch of an internal team could involve a lot of financial and organizational risks.

Let’s take a look at the reasons why blockchain outsourcing could be a smarter and more effective decision for your emerging or existing business.

blockchain stats

Blockchain Development: In-House vs. Outsource

The blockchain skills gap mentioned before mainly arises from the fact that development is complicated on many levels.

While in-house teams are perfectly competent for general software solutions, a lot of companies ultimately discover that their staff is not qualified to handle cutting-edge blockchain development. Additional training and recruitment of new employees well-versed in the technology can be time-consuming and too costly. However, that’s not to say your business should immediately hire the first available outsourcing team.

The best results will require a strategic approach that will not harm your finances. If budget is your top priority, an in-house department with newly trained employees may just be too expensive to build from the ground up.

Why Outsource?

Generally, in-house blockchain development can suffer from the same problems that are plaguing many other fields. Those challenges range from a lack of expertise, workforce maintenance, investment costs, dependency, to recruitment hassles, and more.

It’s also worth noting that creating in-house teams can cause employee retention problems — online listings for blockchain developers have skyrocketed as the demand for employees has risen. What’s also an issue is that many experts are not willing to settle. The future development of projects with internal employees faces the risk of long hold-ups. Furthermore, personnel changes can lead to frustration and uncertainty.

With a talent gap added to that equation, outsourcing sets itself apart as an affordable, more effective solution that will bring faster results.

in-house software dev challenges

Advantages of Outsourcing Blockchain Projects

Here are some of the benefits that a remote team could bring to your private or public blockchain project:

  • Cost-effectiveness
  • Global skills access
  • Greater risk management and oversight
  • Services from experts trained in blockchain development
  • No recruitment issues
  • Higher focus on core business
  • Flexible business procedures
  • Accelerated Time-to-Market
  • High quality of product

Is Outsourcing the Perfect Solution?

While all the benefits of outsourcing are highly impressive, every business will have to invest some time into finding the right team.

Primarily, many companies could simply see you as one of their clients, complete their requirements, and move on. As with any outsourcing need, your business will have to define its goals and find a dedicated external team of professional and devoted blockchain developers.

Dietzler’s Law and Technical Debt

Paying attention to Dietlzer’s law and technical debt are two things to look into while deciding whether to buy or build digital products. Those two notions can shed some light on why you should avoid one-time-buy solutions. It’s something that can greatly affect remote blockchain development.

Firstly, Dietzler’s law states that users that buy products will always try to get 100% of what they truly want. Around 80% of all that is simple and quickly achievable. Then, 10% of it might be possible yet difficult and costly, while the other 10% could be nearly impossible.

However, when users decide to build their own long-term solutions either through outsourcing or with their internal teams, they can have dedicated developers that will try to give them that 100% satisfaction they want.

That is further supported by the idea of technological debt. In short, it emphasizes how inexpensive, fast, and short-term solutions can lead to excess costs. Overall, while in-house development could bring major challenges, outsourcing can also be detrimental unless your business can find a company that will apply the best overall solution based on 100% of your needs.

Rent vs. Hire in Blockchain Development: How to Proceed

There are many types of outsourcing, whether local or offshore. Some remote teams will recruit professional developers from the outside (i.e., body shopping), while others can build your entire project through a dedicated internal team.

For the most part, outsourced employment functions through several common business models including fixed price, captive unit, dedicated team, or Accelerate BOT model. Finding a dedicated model for your needs is essential. While blockchains are written in common programming languages such as Java, Ruby, C#, PHP, Python, and C+, additional expertise is required for commercially successful products.

Requirements and Challenges

The primary requirement is, naturally, domain expertise and technical competence of the development team across the blockchain stack:

  • Cryptography
  • Types of blockchains
  • Building DApps
  • Data structures and security
  • UX / UI Design expertise (link to heuristics article)
  • Data structures and security
  • Solution architecture design
  • Experience with use cases across various industries
  • And everything in between

An external team, regardless of its business model, will have to supply the knowledge, experience, and effective development tools in all of those services.

Lastly, language barriers and differing time zones are challenges that must not be overlooked, as they can result in mistakes and slow turnover. That is a potential disadvantage of outsourcing. However, your business could bypass it by choosing the perfect external team.

blockchain stats

Building Blockchain Products vs. Buying Blockchain Products

Despite some of the minor drawbacks of outsourcing, experts and blockchain professionals for hire are easier to find. Consequently, commercially viable blockchain platforms are quicker to build through remote work.

The Bus Factor

One of the main advantages of outsourcing in the blockchain sphere relates to the so-called bus factor. It shows, essentially, how many employees can get “hit by a bus,” that is – disappear, before the project, company, or business is jeopardized. Naturally, a larger bus factor number is preferable.

With outsourcing, the bus factor will not be a problem while starting a new venture. It still exists, but since it is outsourced, the company that is outsourcing work can expect it to be dealt with. Essentially, the lack of bus factor is a fundamental advantage in outsourced blockchain work. The reason for that relates to the previously mentioned talent gap in the field.

If just one blockchain developer creates critical components with a professionally crafted, high-performance code, the in-house team can already be at high risk of failure. For instance, the code created by such an employee could be incomprehensible to other team members. It may even be encrypted or simply too complicated for others to maintain it. Therefore, eliminating the bus factor through outsourcing is a smarter business strategy.


Furthermore, it’s worth taking a look at some general outsourcing data that any business should keep in mind.

  • A third of all small businesses currently hire outsourcing for various processes.
  • By 2020, over 50% of smaller businesses will opt for outsourcing.
  • In 2018, the market for outsourcing was worth over $85 billion.
  • Deloitte’s global study from 2016 revealed that nearly 60% of companies used outsourcing to cut costs and maintain focus on their core business.
  • Over 60% of all global outsourcing is handled in IT, computer science, and web development.

Key Takeaways

To wrap up, here’s what your business needs to consider while moving ahead into blockchain development:

  • If you’re thinking about blockchain, you have to act as fast as possible due to its rapid evolution.
  • Development requires expertise and highly trained experts.
  • Outsourcing eliminates the financial risk of hiring.
  • Your professional IT team might not have the blockchain expertise.
  • With outsourcing, you have to make sure your partners have the right skills, experience, and dedication to build the optimal solutions for you.

Building Ideal Blockchain-Based Solutions, Bit by Bit

While blockchain was once thought of as an esoteric and rather obscure discipline, its potential has expanded astronomically. Currently, it will be tricky to find professional blockchain developers that can work in an in-house team.

The field is still evolving, and while it is flooded with the need for developers, the demand is far greater. Moreover, forming internal teams for blockchain-based solutions can currently be a costly and time-consuming endeavor. The required skills are still not a part of mainstream programming knowledge. Additionally, training new employees and software developers can be detrimental due to the bus factor and other risks. And while the technology is advancing rapidly, it may not be the perfect time to invest in an internal team.

Outsourcing can provide your venture with hard skills and experience in building successful products. It is a highly effective way to save money and time while hiring top global talent that could be unavailable locally.

Blockchain has revolutionized technology and has created a new kind of network. However, delving into it can be incredibly risky. Outsourcing can minimize that risk while producing dedicated, secure, and clear solutions that are reliable, incredibly fast, and much more effective.

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