You've likely heard about Blockchain as a service (BaaS) if you've paid attention to tech news in the last few years. You'll hear more about BaaS as more and more companies jump on the blockchain adoption bandwagon. No wonder.
Blockchain as a Service provides some flexible options via cloud integrations and platforms that can benefit your business. This article will review all of these options and platforms. First, let's look at the options.
What Is Blockchain?
Blockchain is an interconnected collection of blocks. These blocks are data-rich and immutable. Each block of a private blockchain is uniquely identified or known as the hash. These hashes are used to connect each block with its predecessor.
A block consists of three essential things:
- Data
- Hash
- Previous Block's Hash
A blockchain comprises a decentralized network. The data on the chain is distributed and resides in numerous nodes(devices) across the network, with multiple copies stored for redundancy and security. It can be called a distributed ledger.
The two most popular blockchain use cases today are:
- Cryptocurrency - like Ethereum, Dogecoin, Solana
- Data Storage-like Filecoin, BitGo
What Does Blockchain-As-A-Service (Baas) Mean?
The Blockchain-as-a-Service (BaaS) model came into existence due to a famous model named Software as a Service(SaaS). Due to the high cost of software licenses and deployments, several small companies had to have a better way to access expensive applications. Software as a Service (SaaS) was created to solve this problem.
BaaS was also created to assist small businesses that, due to cost constraints, could not pay for the management and operation of their decentralized applications. In the context of Blockchain-as-a-Service, third-party involvement comes into play when a company or organization provides services for developing or operating applications on the blockchain network for a fee.
BaaS can help businesses deploy their services and applications on the Blockchain network at minimal cost since establishing and maintaining blockchain apps can be expensive. A business can utilize and operate Blockchain applications without concern for the associated expenses of development and upkeep.
Simply put, Blockchain-as-a-Service is similar to a web hosting service or a cloud service provider, specifically for Blockchain and blockchain applications. It is for this reason that several cloud service providers, such as Amazon and Microsoft, also offer the BaaS business model. Blockchain technology today is not limited to cryptocurrency. It helps secure all types of transactions.
Why Do Organizations Need Blockchain As A Service?
Many IT organizations are exploring the advantages of adopting Blockchain solution technologies. The inherent technical complexity, lack of domain knowledge, operational overhead costs, and difficulties in maintaining infrastructure and developing the Blockchain often force key decision-makers to delay adoption plans. BaaS is a potential viable solution for this problem.
By choosing the suitable Blockchain as a Service provider, businesses will have access to Blockchain developers, governance and process experts, as well as an entire cloud infrastructure to develop and deploy applications, all without the need to worry about overhead and startup costs.
A reputable BaaS provider is also a great source of experience and knowledge that can be used to improve the security of your systems. By developing it externally, this approach lowers risks that would otherwise arise during internal development.
Use Cases Of Blockchain-As-A-Service
These use cases demonstrate how Blockchain technology can be applied in various organizations to achieve transparency and immunity.
Health - By preserving a universal, transparent version of a patient's medical data, the Blockchain has revolutionized health care to a great extent. Blockchain technology allows medical professionals to treat patients immediately because of the organized and current records.
Blockchain also helps determine the authenticity of drugs. It is possible to trace the origin of any drug or chemical. This was an excellent help for manufacturers recalling certain chemicals used in aid drugs.
Automotive - The biggest challenge facing the automotive industry is preventing counterfeit parts from entering the market and managing supply chains. Blockchain platform as a Service comes to the rescue by providing records that are accessible from end-to-end for the transport of automotive parts. It helps automobile companies track and differentiate genuine spare parts from counterfeits.
Blockchain-as-a-Service implementation into supply chains and manufacturing sectors has caused considerable havoc to their operations, creating significant disruption. Businesses enjoy optimal production and minimal downtime thanks to the availability of essential components.
Transportation & Logistics - Identification verification is crucial in the transportation and logistics industries for both goods and passengers. With a single token, passengers can complete the process quickly and easily. The same is true for cargo movements, verification efficiency, and fault-proofing. Blockchain-as-a-Service can act as a safeguard for industries and data silos.
Data Storage - The risks of data loss are significantly reduced when stored on a decentralized Blockchain. Blockchain data storage is secure and immutable. This makes it an excellent tool for regulated industries, such as real estate, healthcare, etc.
Document Tracking - Public Blockchain Technology allows the creation of an immutable, distributed document-tracking system. All participants can access the data by storing documents on Blockchain. The documents are also secure because Blockchain technology cannot be changed.
FinTech - Blockchain FinTech has automated most financial transactions processes, bringing peace to the average customer. The immutability of the Blockchain and its transparency will help to prevent financial service disputes. Blockchain services now allow customers to use smart cards. Smart Cards are a way to settle funds faster without central authority verification.
What Is The Baas Model?
When companies enter into a Blockchain-as-a-Service agreement with IT partners, they essentially sign a contract whereby their IT partner agrees to set up all necessary blockchain infrastructure on behalf of their customer in exchange for an agreed service fee.
Users can connect via API or web interface to the blockchain network, which BaaS providers maintain. The goal is to allow users to create and manage their blockchain applications, such as decentralized apps and smart contracts, without worrying about technical issues.
BaaS facilitates flexibility and scalability because users can easily modify the network's size and capacity. Contracts for providing Blockchain-as-a-Service (BaaS) include maintenance duties, including resource optimization, incident management, system health monitoring, proactive security monitoring, and bandwidth management.
Customers who adopt the Blockchain-as-a-Service model can focus on their core business operations and competitive strategies while leaving the maintenance of the Blockchain infrastructure and its performance to the BaaS partner.
Advantages Of Using Blockchain-As-A-Service (Baas)
Below Are A Few Major Advantages Of Blockchain-As-A-Service:
- Time And Money: Organizations can save time and money using the blockchain-as-a-service (BaaS), which also gives them a secure way to employ the technology. Blockchain also reduces the cost of hiring developers to maintain and deploy Software.
- Transparency: Businesses are using blockchain technology to not only store and share information but also provide the high level of transparency and traceability modern consumers expect.
- Focus On Features: Furthermore, because they are not required to build it from the ground up, an organization's development team can focus on their job requirements while allowing blockchain-as-a-service to supplement their projects.
The service provider is responsible, once the infrastructure has been installed, for the maintenance of the system, including bandwidth management, resource allocation, and security features.
- Customizable Template: Companies offering blockchain-as-a-services can provide templates for users to easily integrate into an existing system and applications, allowing them to avoid building their architecture from the ground up.
Oracle's Blockchain Cloud Service enables organizations to build networks on its platform. It is also "future-proofed," meaning future features and developments do not need to be rewritten in the code.
- Testing: Perhaps, one of the most exciting outcomes of blockchain technology is that it allows organizations to experiment without risking a failure in-house.
The Blockchain allows organizations to test their code, resulting in a "proof of concept" or validating the functionality of the feature tested.
Baas Trends
Blockchain technology is gaining popularity, and so are the companies and individuals who want to use it. BaaS companies usually fall into two camps regarding the Blockchain: those that want to use it everywhere and those that think it is overhyped and should be used sparingly.
Rapid Innovation considers itself a blockchain consultant, carefully assessing the needs of each client before making any recommendations. There are specific requests we receive more frequently than others.
The first is that more and more companies are using Blockchain to store data. It makes sense, given that Blockchain is distributed and can provide a secure data record. We're also seeing an increase in interest in blockchain-based smart contracts. This is also understandable, given that blockchains can automate the execution of contracts and enforce the terms.
We're also seeing increased interest in using Blockchain to verify identity. Blockchain is an ideal solution for businesses to confirm the identity of customers securely and efficiently. Most of this can be done with BaaS platforms.
Baas Platforms
Consider the BaaS platforms as specific tools that can assist you with Blockchain as a service:
- Rapid Provisioning- Rapid provisioning is when the cloud provider offers and creates a repository to store system components. BaaS providers are known for their many features that can easily be integrated into existing applications. Therefore:
- Delivering backend services efficiently will help you get your products on the market quicker.
- Avoid long-term contracts and costly infrastructure investments to reduce costs.
- Backend Services- Users can leave the backend to others and focus on the front end instead of managing and building their blockchain network servers. This approach has many benefits, including:
- Reduced time and costs for development
- Scalability is increased
- Security is improved
- Customized applications
- IAM Platforms- IAM Platforms is the term used to describe Software or platforms that allow users to manage and create their digital identity. These platforms use Blockchain technology to store and protect identity information. This makes it harder for cybercriminals to steal this data. Your company can use IAM Platforms to:
- Verify the identity and verify that it is the right person.
- Create and manage digital Signatures
You can track the identity history of an individual, which is a valuable tool for fraud prevention and detection.
- Smart Contracts- Smart contracts are digital contracts that automatically execute and enforce the terms of an agreement between two parties. The terms of the contract are stored in code on a blockchain. This makes them transparent and tamper-proof.
Your company requires intelligent contracts to facilitate transactions on the Blockchain, including currency, data, or property exchanges.
- Permitted Blockchains- Permissioned blockchains are distributed ledgers that only allow specific users to access the network. This type of Blockchain is often used by businesses that want to control their data and transactions.
Blockchain as a service allows companies to benefit from the efficiency and security of permissioned Blockchain platforms without the need to build/maintain the infrastructure themselves.
- Identity-Based Consensus Mechanisms- Blockchains are unique because of their decentralized consensus mechanisms. They are essential for verifying transactions and preventing fraud. Traditional consensus mechanisms are slow and resource-intensive.
Identity-based consensus can verify transactions faster and more efficiently by tying every node with a unique identifier. This not only makes the verification process faster but also improves security and reduces the likelihood of fraud. Blockchain as a service gives you access to this technology.
- Block Monitoring- Block monitoring helps businesses:
- Track your blockchain transactions.
- Verify that they comply with all relevant regulations.
- Recognize suspicious behavior to detect and prevent fraud.
- Blockchain applications can cause problems.
- These apps can be improved to perform better.
Block monitoring is an essential part of the BaaS, which helps businesses make the most of their blockchain applications.
- Blockchain First Services- In simple terms, blockchain-first describes a new breed of businesses that have built their business models around the Blockchain. The companies called 'blockchain first' do so because the Blockchain is at the core of their business model, including development platforms, digital wallets, and marketing and PR.
There is no doubt about the future of this technology, even though many traditional businesses have yet to grasp its potential fully. Businesses should begin planning for a future where Blockchain will play a significant role.
- Private Transactions- There is no such thing in digital transactions as too much safety. Many businesses use Blockchain as a Service for managing their private transactional information. Blockchain is a distributed ledger that records and stores transaction data. Provide added peace of mind. This method adds another level of protection and security.
Multiple parties verify each transaction before being added to the ledger. This makes it nearly impossible for anyone else to alter the data. Because the ledger is spread across many computers, a single point of failure could compromise the system.
- Blockchain Innovations- BaaS service providers provide various services, including storage, computing power, networking, and development tools. Businesses can adopt Blockchain faster by leveraging the BaaS platform without the risks and costs associated with building their infrastructure.
Cloud Blockchain Integration Types
There are several types of integrations for Blockchain depending on which platform you use:
- Google Cloud- Google Cloud provides a fully managed service that facilitates the development and deployment of blockchain applications.
- Microsoft Azure- Microsoft Azure offers a similar service, Azure Blockchain Workbench. It provides tools and templates to build blockchain-based apps quickly.
- AWS- Amazon Web Services Transforming healthcare outcomes with blockchain The IBM Blockchain Platform can change the way your ecosystem ensures trust, data provenance and efficiency to improve patient care and profitability. AWS offers a managed service, AWS Managed Blockchain. This is the best option for creating and maintaining a scalable Blockchain network.
- IBM Cloud- IBM Cloud provides a service named IBM Blockchain Platform that includes everything needed to develop, test, and deploy blockchain apps on IBM Cloud.
- Oracle Cloud- Oracle Cloud offers a supply chain SaaS app, a blockchain integration, and an on-premises version. Users can also use intelligent contract automation solutions, private transactions, and thorough monitoring.
How To Handle Security Concerns Related To Baas?
The idea of keeping all data transactions in a digital ledger can be a turn-off for enterprises that are exploring Blockchain because it offers increased security. This is especially important in light of the stricter privacy and data protection regulations implemented in countries like the US and Europe. Blockchain, on the other hand, is seen by many as a positive development.
As in other areas of the IT industry, security isn't an inherent characteristic. To secure data and transactions, distributed ledger technologies use public key cryptography, hashing, and digital signatures. Most of these are vulnerable if not properly administered.
Bugs in platforms or glitches in securing Blockchains can cause significant disruptions and put the entire system in danger. Before signing a contract with a BaaS provider, it's essential to evaluate them thoroughly and determine the risks involved.
It is crucial that the IT department clearly defines the expectations and parameters of the services before submitting the request to the market. This includes any assurances or guarantees that may be included in the contract.
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What Is Baas, And How Does It Help Business?
Blockchain's popularity is growing steadily due to its ability to offer organizations specific features tailored to their needs. The transparency that it offers to you and your partners in every transaction is what makes it so popular.
- Building Trust- Blockchains create trust because they are constructed in a specific way. No data can be deleted, and all chain members can view all blocks. This transparency is crucial in business.
It is essential to set up the encryption keys. It would help if you had the keys to your blocks and those of your company to change records.
- Establishing Contracts- Being a part of the Blockchain can eliminate the need for intermediaries in many contracts. The technology allows for the definition of legally enforceable terms and identification. It also creates an immutable record.
The three critical elements of any contract with a financial institution or other business are essential. Even though these contracts haven't been tested in court, the current trend indicates that the law will treat them like any other contract.
- Transfer Value- Blockchain technology was first used to transfer the value of different cryptocurrencies. Blockchain technology allows this to be done. The products that you can use to exchange value have grown in number.
- Smart Contracts- Intelligent contracts can mean several different things. First, people can sign contracts with their encryption keys using blockchain technology. Smart contracts use technology to verify identities and maintain records.
Smart contracts can be created using blockchain technology to execute based on specific conditions automatically. It is possible to store a code piece in the block record, as it's just data. The contract can align itself to purchase a specific stock once the price is right.
- Audit- Records on the public blockchain include timestamps that cannot be removed. Blocks may have extra metadata options for auditing. You can always show the history of files or transactions.
Cost Analysis: Baas Offering Vs Self-Hosted Blockchain
The total cost of ownership of the Self-Hosted Blockchain App is high due to startup (infrastructures, personnel, software licensing, hardware, and consulting), retirement (decommissioning server racks), and operational costs (monitoring and cost per transaction, bandwidth expenses).
The cost to build and deploy a smart contract using the previous model can be as high as a hundred thousand dollars.
BaaS offers a blockchain application that is hosted in the cloud. It costs around USD 0.29 for each CPU hour. You will be paying as you go. Actual costs for the BaaS model depend on factors such as transaction rate, maximum number of simultaneous transactions, payload size, etc.
The pricing of Amazon AWS Managed Blockchain Service, for example, depends on several factors, including peer nodes and data written into the network.
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Conclusion
Blockchain-as-a-service provides an innovative solution to facilitate digital transformation efforts. This can give your business a competitive edge without investing in infrastructure, research, or planning.
