Modern technological progress is revolutionizing business, organizations, and lives at unprecedented speed and depth - this Fourth Industrial Revolution is no different. Companies and organizations find themselves caught by its fast pace, having difficulty keeping pace with disrupted work environments. They rarely have enough time or capacity to develop IT skills and create platforms and technology on-premise.
Blockchain-as-a-service business models and cloud deployments may not solve all business challenges. Still, they make IT transformation simpler and safer for companies whose core competence lies outside IT.
As Blockchain continues to rise in recent months, organizations remain uncertain about its use and how best to utilize this distributed ledger technology. While some organizations continue learning how best to utilize it for themselves, some technology enterprises and startups have taken the initiative by providing Blockchain as a Service solution. In this article, we'll look into the following:
What Is Blockchain As A Service (Baas)
Blockchain as a Service (BaaS) enables businesses to quickly develop, adopt and host their blockchain apps, smart contracts, and other functions relevant to Blockchain while managed by IT service partners who handle any maintenance required on infrastructure.
Blockchain as a Service (BaaS) represents an exciting advancement for blockchain technology, promising to hasten adoption across businesses by applying similar engagement principles as Software as a Service.
Why Do Organizations Need Blockchain As A Service (BaaS?
Many IT companies are exploring the possibilities offered by Blockchain in various industries. Unfortunately, its complexity, lack of expertise in domain areas as well as overhead and operational expenses associated with developing, operating, and maintaining Blockchains often prevent key decision makers from adopting it quickly enough; for which BaaS could provide a viable solution.
By choosing an efficient blockchain as a service provider, businesses can gain access to an experienced team of blockchain professionals, process and governance specialists, and cloud infrastructure necessary for developing and deploying applications without incurring significant overhead or startup costs.
An experienced BaaS provider is also an invaluable source of experience, knowledge, and practical wisdom that can be leveraged to strengthen the security of your systems while mitigating risks that might otherwise exist from developing it internally.
What Is The BaaS Model?
An IT partner and organization may enter into a BaaS contract that allows their IT partner to supply all aspects of Blockchain infrastructure, technology, and services at an agreed-upon fee.
Blockchain as a service provider (BaaS partners or providers) deploys the resources, technologies, and infrastructure required to set up and maintain Blockchain-connected nodes on clients' behalf. BaaS providers may customize a Blockchain Network according to customer specifications - Ethereum, Bitcoin, or another distributed ledger like Hyperledger Fabric.
Blockchain as a Service provider is responsible for maintaining its infrastructure and all critical artifacts, offering support services like bandwidth optimization, resource management, incident response coordination, and system health monitoring.
Customers can focus on core business and competitive strategies when using Blockchain as a service (BaaS). BaaS providers manage and optimize the Blockchain infrastructure and performance, which makes running distributed-ledger workloads in environments that demand high fault tolerance much simpler.
Industry-Wise Use Cases Of Blockchain-As-A-Service
Blockchain is an information management platform-all solutions center around data management. Several use cases illustrate how businesses can utilize Blockchain to increase transparency and immunity in their operations.
Healthcare
Blockchain technology has revolutionized healthcare immensely. By creating an organized record system that securely stores patient medical information in blockchain form, healthcare professionals can instantly provide care for patients as soon as they enter a medical clinic.
Blockchain can also be utilized for verification of drug authenticity, making it possible to trace any chemical or medication produced. It had proven invaluable when manufacturers were forced to recall certain aids drugs containing chemicals used within them.
Automobile
Automotive industries face numerous difficulties managing supply chains and combating counterfeit parts. Blockchain, as a Service, can assist automotive industries by creating end-to-end records of transported features that help automobile companies identify genuine parts from counterfeit ones and identify counterfeit ones quickly.
Blockchain services have also drastically enhanced industry efficiency. Businesses can produce at peak levels without experiencing downtime; furthermore, no shortage of critical components occurs in production.
FinTech
FinTech and Blockchain technologies have relieved bank customers everywhere, making most financial processes effortless while adding transparency, immutability, and dispute avoidance features to aid dispute avoidance. Customers can now also utilize smart cards with blockchain services, allowing faster fund settlement without central verification processes.
Transport and Logistics
Transport and logistics industries rely heavily on identifying goods and passengers for efficient operations and error-proof cargo and passenger transportation movement. Blockchain Platform as a Service offers an effective method for secure identification that can also benefit industries or other silos of data storage.
Document Tracking
Blockchain technology provides a distributed and immutable tracking system for documents. All participants gain equal access to stored documents by placing them into Blockchain's storage network; its secure nature also ensures their safety.
Data Storage
Blockchain provides an immutable and secure data storage service that significantly reduces the risk of losing information, offering significant advantages for industries like healthcare and real estate.
Contract Execution
Blockchain smart contract service provides an efficient platform for contract execution that guarantees high levels of transparency. Due to the distributed nature of this system, all parties involved should receive equal notice about any developments in their agreement.
Blockchain Infrastructure as a Service offers enterprises many benefits by opening up unexplored use cases of Blockchain technology. Businesses are then free to explore its real-world applications without a long-term commitment, simply partnering with Blockchain services companies and fully adopting its capabilities.
Read More: "Why You Need Blockchain Technology In Business"
Cost Of Self-Hosted Blockchains Vs. Cost Of Baas Offering
BaaS pricing models vary based on multiple variables; generally, applications hosted locally on blockchain networks are more costly than services delivered over the cloud.
The total Cost of Ownership for Blockchain applications can be high due to startup expenses (personnel and infrastructure costs, licensing fees and consulting services, etc.), ongoing management/monitoring fees such as bandwidth charges/transaction costs, as well as retirement costs that could reach several hundred thousands of dollars for smart contracts on Blockchain networks.
Blockchain Applications hosted on Cloud as part of Blockchain as a Service can be purchased for USD 0.29 per CPU allocated ( Blockchain platform for Cloud), creating what's commonly referred to as a pay-as-you-go pricing model where customers pay only for services they use.
Actual costs associated with this model depend on several variables, including but not limited to transaction rate, channel count, payload sizes on transactions, and maximum simultaneous transactions.
Pricing for Amazon AWS Managed Blockchain depends on factors like network membership and node count, peer storage space, and any data written into the network. Costs associated with membership start at an hourly membership fee for users, which starts at $1.93. These expenses cover network node costs, storage for peer nodes, and data fees.
Microsoft also provides an Azure Blockchain pricing structure with tiered rates; hourly charges vary based on nodes dedicated to transaction processing and validators and storage provided in gigabytes per month.
Costs associated with BaaS services typically depend upon how many units of service you consume, with additional fees due for consulting, solution development, and support services incurred when working with partners to customize AWS, or Azure Blockchain applications. All costs related to service agreements vary accordingly.
What Are The Security Concerns Related To BaaS?
Blockchain's enhanced security may prevent enterprises from exploring it due to data transactions being recorded in publicly accessible ledgers, especially given tightening privacy regulations in places like Europe and North America. But many see Blockchain as an invaluable step toward better privacy protection - an aspect many view positively about its implementation.
Security in distributed ledger technologies does not come standard. To secure transactions and data, public key cryptography, hashing, and digital signatures may all be employed; unfortunately, many become vulnerable if their administration is mismanaged.
Platform problems or security protocol breaches for Blockchains can create severe disruptions that put systems in peril. Therefore, before entering any agreement with any BaaS provider, conduct an extensive assessment and evaluation of their services.
IT departments must establish expectations and parameters of any services provided and any assurances or guarantees that might be included in contracts.
The Criteria For Selecting A Blockchain As A Service Partner
There are many factors to consider when selecting a vendor for your business. This is especially true with BaaS because there are no readily accessible guidelines or best practices on the market. There are many factors to consider when choosing a partner for BaaS.
- Prior experience in setting up Blockchain infrastructure/Market CredentialAlways ensure that the BaaS partner has proven experience in developing and deploying Blockchain technology on a scale and environment similar to the one you plan to execute. Ask for recommendations or credentials from previous clients.
- Commitment to Quality
- Any enterprise software or application project must be of the highest quality. The blockchain is no exception. Ask the vendor about their commitment to standards, quality, and process.
- Security Assurance
- Check for any gaps that may exist in your proposed plan of implementation. A minor bug can have serious consequences. When it comes to distributed accounting, you must ensure the output is robust.
- Choice of Operating Systems
- Examine the vendor's experience developing cloud-based software for operating systems similar to yours. You should also ensure that your new Blockchain-based infrastructure seamlessly integrates with existing systems.
- Easy of use
- Consider whether your proposed Blockchain-enabled systems and processes are easy to use and adapt. You don't want your employees to find navigating or using a new system challenging, as this could negatively affect the adoption rate and business results.
- Price and Support
- Finally, it only pays for the value delivered by your BaaS provider. Analyze carefully the options for pricing and support after deployment. Only pay for options that provide the most outstanding value to your company.
BaaS: Pros and Cons
Before signing on with any service provider, customers will always analyze the advantages and disadvantages of Blockchain as a Service. You can use these pointers to form your own opinions.
- Cost Savings
- When businesses partner with IT service providers, they often look beyond cost savings to find value. This is also true of BaaS. The cost-savings and time savings are too significant to let anything else come close.
- Easy of use
- BaaS vendors often offer customizable templates, plug-and-play modules, and other tools that are easy to set up by anyone with basic programming knowledge. This helps companies avoid the learning curve and investments in the planning and research stages.
- Customization is the focus.
- BaaS allows companies to utilize ready-made templates and platforms. This means that the internal development team can focus on the company's business requirements and ensure the Blockchain solution meets their specific needs. The BaaS provider maintains the Blockchain infrastructure, which includes bandwidth management, resource allocating, hosting, and security monitoring.
- Employee and Resource Optimization
- Limited IT infrastructure on premises means a reduced physical overhead in power, cooling, and equipment space. This directly results in reduced staffing levels and instances of firefighting. It allows IT to concentrate on its core strengths, and employees can participate in critical projects that add value to the company.
- Limitation of In-Depth Knowledge
- Blockchain technology is an emerging one, and most organizations do not have a complete understanding of its workings. Implementing Blockchain based on a half-baked knowledge of the technology could lead to a failure or wasting investment.
- Insufficient visibility and control
- The BaaS providers own most cloud-based BaaS and plug-and-play models. They own the resources, infrastructure, and technical expertise. This can lead to communication problems, a lack of understanding, and limited visibility of the situation when there are technical issues. Often, these situations can lead to mistrust between both parties.
- Data Compliance Challenges
- Blockchain is based on the idea of spreading information over a worldwide network. It can now create a Pandora's Box regarding regulation and compliance. This is especially true when the data shared between geographies or the servers that the BaaS providers are located in are in countries under sanctions or zones where there are third parties.
- Business continuity
- In today's fast-paced business world, it can be challenging to know that the provider will be in business. It is the same for BaaS. The chances of service interruptions can increase if the provider of services goes bankrupt or merges with another firm within a couple of years after the Blockchain is implemented.
Blockchain as a Service (BaaS) can give your company an invaluable competitive edge while positioning it to be future-ready, all without significant capital outlay in infrastructure, resources, and planning. Furthermore, BaaS providers can assist businesses by helping manage risks more proactively on their journey forward.
What Are The Benefits Of Baas For Businesses?
Blockchain technology popularity continues to skyrocket due to its ability to meet organizations' unique requirements for tailored features that meet them perfectly. Furthermore, its transparent technology brings you and your partners greater transparency, enhancing both transactions. This makes this form of tech so compelling.
Establishing Trust
Blockchains foster trust because of their design. No data can be deleted, and every member can view all blocks. Transparency is vital when conducting business operations.
Establishing encryption keys is crucial. Make sure to include keys for blocks you own and those your business owns so you can update records easily.
Establishing Contracts
Being part of the Blockchain can remove intermediaries in many types of contracts. This technology facilitates legally enforceable terms, verification of identity, and creation of unchangeable records - three essential aspects of any agreement with financial institutions or businesses.
Although no contracts involving Blockchain have been proven legally binding, evidence points toward their treatment by law as any other arrangement would.
Transfer of Value
Blockchain technology was initially created to exchange value among multiple cryptocurrencies using Blockchain itself securely. Since its introduction, however, its uses have grown considerably as more products have been made possible through Blockchain to do precisely this.
Smart Contracts
Smart contracts encompass several distinct uses. People could utilize Blockchain to sign contracts using an encryption key; smart contracts also use technology to verify identities and keep records up-to-date.
Smart contracts can be created using blockchain technology to execute specific circumstances automatically. Storing code within block records allows intelligent contracts to run automatically upon certain conditions - for instance, purchasing stock once the agreement has decided its price.
Auditors
Records on a blockchain include permanent timestamps that cannot be deleted, while blocks may consist of additional metadata options for auditing purposes. You can always display a history of files and transactions.
Blockchain Technology: The Future
Blockchain as a service (BaaS) has made tremendous inroads into numerous industries, particularly education. The technology can eliminate hurdles to fee payment, communication, and documentation processes and streamline other aspects of process flow.
BaaS (Blockchain as a Service) is an infrastructure-based service and management provided by third parties that allow clients to build, host, and manage their blockchain apps. Firms without IT expertise with a core competency within their sector can utilize BaaS to focus on core activities instead. Specifically designed technology provides a distributed, immutable tracking system which all participants access simultaneously; contracts may also be executed using this platform, further bridging media with organizations by offering potential applications which aid corporate expansion.
Conclusion
Blockchain-as-a-Service offers businesses an efficient means of digital transformation that may give an advantage without extensive investments in infrastructure, research, or planning costs.
