Blockchain applications in real life are growing at a rapid pace. Although it has many real-world applications, digital businesses still need help to utilize the potential of Blockchain fully. There are now two questions facing business owners.
- Is blockchain-as-a-service an effective remedy?
- Is blockchain technology made available to a wider audience through blockchain-as-a-service for business?
Today, the speed, depth, and breadth of technological advances have ushered in the Fourth Industrial Revolution. This is the greatest epoch ever in the history of humanity. Businesses and organizations are often pushed to their limits by the rate at which technology is disrupting them. They need more time to develop IT skills and to build platforms and technology on-premises.
Here we have cloud-based deployments and the business model of Blockchain as a service. These business models may only be the answer to some business problems, but they can help organizations whose key competencies remain outside of IT make IT digital transformations simpler and less risky.
Blockchain is not a new technology. However, many companies, as well as startups, are already offering Blockchain as a Service to ease adoption. This article will examine how the BaaS for Business solution works, what the Blockchain is as a business service offers, and the ways to select the top BaaS vendors on the market.
What is Blockchain-as-a-Service?
Cloud-based Blockchain services are now being made available to an even wider range of users through the business model cloud service. It is similar in operation to SaaS and PaaS business models, which allow cloud apps and storage.
The BaaS model allows companies of any size to benefit from Blockchain technology without having to invest in their development. BaaS will give businesses access to the Blockchain service provider, where they can pay a small price to develop Blockchain applications. It is because of this benefit that it has become a major part of Blockchain technology.
Businesses can develop, adopt, and host their own blockchain applications, smart contracts, and other blockchain-related security features using the Blockchain as a Service. The infrastructure maintenance duties are managed in the interim by the IT service partner. A significant advancement in blockchain technology is Blockchain as a service. It has the potential to hasten the uptake of distributed digital ledger technology in the corporate world. The idea is based on engagement ideas that are similar to those of software as a service.
BaaS is a solution that can be used by businesses. Still, it does require a level of centralization because the transaction must go through the Blockchain service of the host. Decentralization is the key to understanding how Blockchain can be used for business. This makes companies wary of its use.
Takeaways from the conference:
- Businesses use Blockchain-as-a-Service, cloud infrastructure and management provided by a third party, to create and maintain Blockchain applications.
- This is a back-end web server that runs apps.
- BaaS is a catalyst that leads to the widespread adoption of Blockchain Technology.
Why is Blockchain as a Service (BaaS) Necessary for Organizations?
Many IT companies are exploring the advantages of Blockchain in their industries. The inherent complexity of the technology, the need for domain expertise, and the overhead costs associated with developing, operating, and maintaining infrastructure are often factors that force decision-makers to delay blockchain adoption. BaaS is a potentially viable solution for this security issue.
Businesses can use Blockchain professionals, process and governance experts, as well as a whole cloud infrastructure to create and deploy apps by selecting the finest Blockchain as a service provider, all without worrying about overhead and beginning expenses.
A reputable BaaS provider is also a great source of customer experience, knowledge, and practical wisdom that can be used to improve the security of your systems. This reduces the risks that would be involved if it was developed internally.
How Does Blockchain-as-a-Service Business Model Work?
The process through which third parties set up, host, and manage a Blockchain network on behalf of organizations is referred to as the "blockchain-as-a-service" business model. The service provider will set up the infrastructure and Blockchain technology in return for payment.
The function of Blockchain-as-a-service for businesses is comparable to that of a web server in many aspects. Customers can create and host Blockchain apps, smart contracts, and other services using the cloud-based solution in an ecosystem that the service provider controls.
An arrangement known as a "BaaS contract" between an IT partner and an organization enables the partner to offer all Blockchain infrastructure, technology, and services in exchange for a charge laid out in the contract. Blockchain, as a service partner or provider, deploys the necessary resources. It leverages the technology and infrastructure required to set up and maintain Blockchain-connected nodes for the client.
BaaS partners can configure the Blockchain Network based on customer requirements. This includes Ethereum, Bitcoin, or any other distributed ledger such as Hyperledger Fabric. The Blockchain as a Service provider is also responsible for maintaining the Blockchain infrastructure and all critical artifacts. BaaS agreements also cover support services such as bandwidth optimization, resource management, incident management, and system health monitoring.
By utilizing a Blockchain as a service approach, customers can concentrate on their core businesses and competitive strategies. The BaaS provider will maintain and guarantee the functionality of the Blockchain infrastructure. They can operate distributed-decentralized ledger workloads in settings that need a high level of fault tolerance, thanks to it.
BaaS integrates into conventional organizations to support features for data, security, hosting, and bandwidth allocation. Businesses benefit most from BaaS because it enables them to concentrate on their core competencies without having to worry about the complexity of Blockchain operations.
How Blockchain-as-a-Service is Shaping Businesses?
Markets predict that the BaaS market will grow from USD 11 519 million in 2016 to USD 12,519 by 2026. This is an enormous amount of money for any modern enterprise. Blockchain-as-a-service is exclusively shaping startups and SMEs that are highly dependent on large data silos. BaaS offers smart data security and competitive advantages without forgetting the part about expelling delegates. It is a cost-effective solution. Below are global statistics on BaaS.
Blockchain is a technology that businesses and consumers alike are adopting. The overhead costs associated with infrastructure development, configuration, and operation, as well as maintenance, along with technical problems, are a major barrier. No matter how large the benefits of Blockchain to SMEs are, they require a lot of energy and resources. This prevents their mass adoption.
BaaS allows companies to learn the necessary skills for running the Blockchain Infrastructure by renting a Blockchain. The investment required to enter the technology sector is reduced as well because the service contract can be scaled-up or terminated at short notice. This allows businesses to remain at the forefront of technology without taking unnecessary risks.
Startups can Benefit from BaaS
BaaS is ideal for small business, which does not have to be involved in the workings of the Blockchain. This allows these companies to gain an understanding of Blockchain technology without developing their Blockchain.
BaaS integration is used in a variety of industries, including identity management, payments, and supply chain management. Blockchain development services have emerged as the best solution to a variety of SME problems, such as eliminating intermediaries and lack of transparency.
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Cost of Self-Hosted Blockchains vs. the Cost of BaaS Offering
BaaS cost models vary based on several factors. However, in any case, applications of blockchain that are hosted locally on a Blockchain network will be more expensive than a BaaS service offered via the Cloud.
The Total Cost of Ownership for Blockchain applications is high in the first model due to startup expenses (personnel and infrastructure costs, hardware and software costs, licensing and consulting), ongoing costs (management and monitoring costs, bandwidth costs, faster transaction costs, and so forth), and retirement costs. Costs for implementing and developing a Blockchain smart contract can reach several hundred thousand dollars.
For $0.29 USD per allotted CPU, a Blockchain Application hosted on the Cloud as part of Blockchain as a Service can be purchased. This pricing strategy is also known as the pay-as-you-go pricing concept. Only the services used are covered by the customer's payment.
The transaction rate, number of channels, payload sizes, maximum concurrent transactions, and number of transactions are just a few of the variables that affect how much this model actually costs. Pricing for Amazon AWS Managed Blockchain is also based on network membership, node peer storage, data transferred to the network, and written data.
Costs are included as part of the hourly membership fee for users, which starts at $1.93 per hour per member. This provides network node costs, storage for peer nodes, and the cost of data. Microsoft also offers an Azure Blockchain pricing structure with tiers. The hourly rates are based on the provisioned nodes for financial transaction processing and validators and storage provided in GBs per month.
Costs for most BaaS services are based on how many units of service you consume. When you work with a partner to customize your IBM, AWS, or Azure Blockchain application development, there will be additional fees for consulting, solution development, and other support services. These costs are based on the service agreement.
What are the Security Concerns Related to BaaS?
The idea that data transactions are kept on a publicly accessible ledger can be a turn-off for enterprises who want to explore Blockchain because of its enhanced security. This is especially important in light of the stricter privacy regulations and data protection laws in places like the US and Europe. Blockchain, on the other hand, can be seen by many as an important step in the right direction.
As in other areas of the IT industry, however, security does not come as a standard. To secure digital transactions and data, distributed ledger uses several mechanisms, including public key cryptography, hashing, and digital signatures. Most of them become insecure when they are not properly administered.
Bugs in enterprise blockchain platforms or glitches in the security of a Blockchain can cause major disruptions and put the system in danger. Before signing any contract, you should thoroughly assess and evaluate the BaaS provider's services. It is important that the IT department clearly defines the expectations and parameters of the service, as well as any assurances or guarantees which may be included in the contract.
What are the Seven Benefits of Blockchain as a Service Concept?
Enhancing Automation
Automating enterprise operations will become a key driver. CIOs and other technology leaders should consider technologies that embrace automation. The instantaneous nature of blockchain transactions makes automation easy. This means that self-executing software can handle legal agreements such as smart contracts. When using a BaaS platform, automation can be achieved in internal processes such as initiating projects or audits, so enterprise operations become more productive and efficient.
Improve Data Security
A digital certificate containing their digital signatures and a hash unique to each transaction on the Blockchain can verify that every person involved with a product or service classified is working. The benefits of blockchain technology include increased accountability, data integrity, and transparency. This means that enterprises can rely on transactions and processes which are synchronized and unaltered. Smart contracts have become possible. By leveraging digital signatures for identification and authentication, blockchain technology, which is based on cryptography, aids in establishing trust and reducing fraud.
A digital certificate with digital signatures and a hash unique to each transaction on the Blockchain can verify that every person involved in the development of classified services or products is actually working. The credentials can be checked at each step to prevent unauthorized transactions. IBM will use Hyperledger, a project based on blockchain disruptive technology, to improve enterprise processes. This includes tracking payer identity to streamline billing disputes.
Both public and private blockchains are accessible. A corporate intranet is a private blockchain, whereas a public blockchain is comparable to the Internet. BaaS hosting platforms, which mix private clouds, virtual private networks, and blockchain-based development platforms, are able to provide private blockchains.
An autonomous processing structure would send the financial system off a cliff when the stresses from the financial crisis resurface, which they will eventually do. Private blockchains will appeal to businesses because they can track transactions in the virtual environments or private clouds of their company (or those of its partners) without compromising data security. This allows data to be restricted to only authorized users and partners to reduce the risk of data breaches.
Cost Savings
The operational expenses of an enterprise can be a significant factor in reducing its profits. The advent of blockchain technology allows enterprises to save money by using it as a service. Blockchain technology, for example, can be used to popularize smart contracts. In other words, intermediaries, like accountants, lawyers, or managers, who would usually be involved with reviewing contracts or service agreements, could be eliminated or reduced. The costs associated with the enforcement of the accords and payment can also be reduced.
Simpler Processes
It can be difficult to determine if new technologies will work without conducting tests. Testing for quality is even more difficult when the technology in question is so complex. If your development company decides to integrate a BaaS platform, you will be able to simplify the integration process. Blockchain technology is less complicated to use than systems using centralized platforms because of its decentralized nature.
Reduction in Ramp-Up Time
You will need to take into consideration the amount of time required to change systems and learn new complex information if your company is considering installing a blockchain. BaaS platforms can reduce the time required to ramp up. A hosted BaaS will eliminate the extensive manual work needed to create the private Blockchain. This also removes the requirement for enterprises to build back-end computing capacity.
Applications Development Opportunities
The development of applications is another enterprise-wide pain point when integrating blockchain technology. Suppose your IT department still needs to learn the technology. In that case, developing blockchain applications from scratch can be a complex process that takes a lot of time. BaaS platforms such as Microsoft Azure Blockchain As A Service offer services that help create blockchain apps. These application services can help your IT department streamline development to meet organizational goals.
Better Collaboration
Limitations that are inherent to third-party tools of collaboration can hinder the progress within an organization. BaaS platforms with private blockchains offer new opportunities for cooperation. An enterprise, for example, can create a private distributed ledger that contains employee profiles and is only accessible by authorized parties. The Blockchain allows members of the network to share confidential information, such as presentations and blockchain projects that are only visible to them. It will enable you to eliminate the use of intermediaries such as social media to improve productivity.
Industry-Wise Use Cases of Blockchain-as-a-Service
We have already mentioned that Blockchain is an information management platform. This means all solutions in this area will be centered around data. These use cases show how Blockchain can be used by businesses to achieve transparency and immunity.
Healthcare
Blockchain technology has transformed healthcare to a large extent. It does this by keeping an updated and universal version of patient medical records. Blockchain technology allows medical professionals to provide care for patients because of organized records instantly.
Blockchain can also be used to verify the authenticity of drugs. It is possible to trace the origin of any chemical or pharmaceutical. It has proven to be a huge benefit when manufacturers have had chemicals recalled for use in aids drugs.
Automobile
Automotive industries face the biggest challenges in managing supply chains and preventing counterfeits. Blockchain as a Service can help by providing end-to-end records of the transporting parts. It helps automobile companies track genuine parts and distinguish them from counterfeits. Blockchain-based services have also disrupted industry efficiency. Businesses can produce optimally with minimal downtime, and there is no shortage of vital components.
FinTech
FinTech and Blockchain have brought peace to the average bank customer. They make most financial processes effortless. Transparency and immutability are also added to help prevent disputes. Customers can now use smart cards with blockchain services. Smartcards allow for faster fund settlements without central verification.
Transport and Logistics
Transport and logistics industries rely heavily on the identification of goods and passengers. Passengers can make the process easier and faster with a single token. The same is true for the cargo and its movement. It's efficient and error-proof. The Blockchain Platform as a Service is a safety mechanism that industries and other silos of data can use. Blockchain services can be used for a variety of purposes, including:
Document Tracking
Blockchain technology provides a distributed and immutable tracking system for documents. All participants have equal access to information by storing documents in Blockchain. Blockchain is also firm and secure, ensuring the security of documents.
Data Storage
The risk of losing data is greatly reduced when data is stored on the decentralized Blockchain. This immutable and secure data storage facility on Blockchain is a great benefit to regulated industries such as healthcare, real estate industry, etc.
Contract Execution
Blockchain's smart contract service provides a platform for the execution of contracts that promises high levels of transparency. The distributed nature of the system implies that it should inform all parties equally.
Blockchain Infrastructure as a Service can provide benefits by revealing the many use cases yet undiscovered. This allows enterprises to explore real-world blockchain use cases without committing long-term. They would only need to partner with Blockchain services companies and fully adopt Blockchain capabilities. Let's look at regional adoption now that we know how valuable Blockchain Platform as a Service is for SMEs.
The Region Wise Adoption of Blockchain-as-a-service
BaaS has a large market in the US, Mexico, and Canada. This is due to the large number of SMEs, as well as the larger businesses that operate in the US. They are also willing to integrate the technology into the services provided by public utilities.
BaaS is also seen to be the most popular market in Europe. Government support in different countries has been one of the main drivers for the adoption of BaaS and Blockchain. Asia Pacific is third in the world for BaaS Integration. The technology will grow due to the integration of BaaS into traditional business and the growing investments in Japan, China, and South Korea.
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Conclusion
Errna is a Blockchain company with extensive knowledge and expertise in managing and developing decentralized solutions. The Blockchain experts are here to provide you with decentralized solutions that increase your ecosystem's scalability, security, and transparency.
With Blockchain as a service, your business can get a competitive edge and become more future-ready without making a big investment in infrastructure, study, planning, or resources. You can act as the industry's leader among your contemporaries. A reliable BaaS provider can help you take the next significant step ahead by proactively managing the risks.
Consider services that can save you time and money during the ramp-up phase while also increasing your efficiency and improving your data security. Platforms that offer Blockchain-as-a-Service are a trusted and innovative way for CIOs to simplify complex business processes while enhancing enterprise operations.
