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BaaS: Blockchain as a Service (Simply Explained)


BaaS: Blockchain as a Service (Simply Explained)

In the coming years, Blockchain as a Service is likely to play a critical role in Internet Technology. It has begun to develop exponentially as more and more businesses recognize the benefits of blockchain technology. However, for a variety of reasons, they are unable to implement blockchain.

Blockchain-as-a- Service providers such as IBM, Microsoft Azure, and other large corporations have discovered BaaS to make blockchain adoption easier for firms whose primary skills are not in IT. It allows companies to concentrate on their core competencies rather than worrying about the development space.

Let’s get started.


What is Blockchain as a Service?

Blockchain as a Service (BaaS) is a type of blockchain service provision that enables business clients to use cloud-based solutions to create, host, and adopt their blockchain applications, smart contracts, and other relevant blockchain-based features while the cloud-based IT partner or service provider manages all necessary tasks and activities to keep the infrastructure operational.

The introduction of Blockchain as a Service is a significant advancement and an important milestone in the blockchain ecosystem, promising to accelerate the adoption of distributed ledger technology across organizations. Needless to mention, the concept is founded on and operates on engagement concepts similar to Software as a Service (SaaS).


How does Blockchain as a Service work?

A Blockchain-as-a-Service provider is in charge of maintaining the blockchain infrastructure. A BaaS operator also handles tasks including efficient resource allocation, bandwidth management, and hosting needs. Clients who use a BaaS model can concentrate more on their core businesses and the operation of their blockchains without worrying about infrastructure and performance difficulties.

Think of the blockchain as a service as being comparable to a web host.

You build creative websites that receive millions of daily visitors, host them on your server, and take care of all the upkeep tasks either by yourself or by hiring staff. Another option is to host your website with any web hosting company, such as Amazon Web Services or Azure, and delegate all infrastructure and maintenance concerns to them.

Similar to the second way, BaaS frees you from the responsibility of overseeing the infrastructure of a blockchain program.


Several of the well-known BaaS providers on the market are: 


  • Microsoft

When Microsoft launched Azure Blockchain Service in 2015, it was one of the first suppliers to offer BaaS. They collaborated with Consensys to create Microsoft Azure, which is built on the Ethereum Blockchain. With a “one-click cloud-based blockchain development environment,” the service seeks to enable developers and enterprise clients to experiment with blockchain technology.

Microsoft Azure Blockchain-as-a-Service also enables users to create public, private, and consortium blockchain environments using industry-standard frameworks and to market their blockchain apps. Azure assists its users in understanding and implementing distributed ledger technology by incorporating the AI-based virtual assistant system, Cortana.


  • Amazon

Like other large corporations, has launched its own BaaS solution called “Amazon Managed Blockchain.” Amazon Managed Blockchain is a completely managed solution that allows users to quickly set up and administer a scalable blockchain network.

Amazon Managed Blockchain provides two major blockchain development frameworks, Ethereum and Hyperledger Fabric, allowing clients to administer permissioned and public blockchain networks through a single managed service. Amazon’s BaaS service allows you the flexibility to choose the proper resources for your task by offering several instance types with different combinations of memory and CPU.


  • R3 Corda

The managed R3 Corda service from ChainStack, a blockchain platform as a service, enables businesses to deploy Corda nodes in the cloud with just one click.

The managed R3 Corda platform cuts blockchain node deployment time to a few minutes, allowing corporations, R3 partners, and governments to host the Corda network in just three clicks.

Developers can create private networks for testing scenarios based on the most recent version of Corda 4.1 and install CorDapps on the private network nodes. It results in fewer resources and efforts spent while providing scalability over a shorter time. Network upkeep is no longer a developer’s primary concern.


  • SAP Cloud Platform Blockchain

SAP Blockchain-as-a-Service, also known as “Leonardo,” operates on the SAP Cloud Service and doesn’t need any on-premise software or infrastructure. SAP’s Leonardo enables the creation of private and consortium blockchain networks. It uses open standards without the requirement for a substantial initial capital commitment.

Within a single ecosystem, SAP’s Blockchain-as-a-Service platform serves as a machine learning service, a blockchain cloud service, and supports IoT.

Since there are several blockchain-as-a-service platforms available, you need to take a few factors into account before choosing the best BaaS provider for your blockchain use case.


Here are some factors that can assist you in selecting the best BaaS Platform


  • Smart Contracts Integration

For a blockchain system to integrate business logic, you would need a smart contract mechanism. Unlike conventional contracts, smart contracts not only include the rules but also enforce penalties if any party violates the rules.

The BaaS platforms’ immutability makes it challenging for programmers to test and deploy smart contracts. It is important to take into account that the blockchain as a service provider offers you the integration of smart contracts with the deployment.


  • IAM Platforms (Identity Access Management)

Users on a permissioned network can access particular data or levels. The blockchain network will become more secure by integrating an identity management platform, and you will be able to provide permission to certain people.

For instance, not every worker in the office is permitted access to sensitive internal data. A system called Identity Access Management (IAM) makes it easier for businesses to handle digital identities.

You can use a single sign-on method or even several authentication methods to handle the identities and grant users access to the data. IAM integration makes sure you only provide the necessary information. Choose a BaaS platform that integrates the IAM framework.


  • Different frameworks and runtimes

What happens if you decide to use a different blockchain platform when developing a blockchain application using a BaaS architecture? You might not come across many blockchain-as-a-service providers that offer flexibility when it comes to blockchain frameworks.


  • Mechanisms for Consensus Based on Identity

You must be familiar with common consensus procedures like Proof of Stake and Proof of Work.

However, the enterprise-grade solution requires more scalability than Proof of Stake and Proof of Work can provide. Therefore, choose blockchain service providers who are developing a consensus system independent of computation.

Consensus models that are identity-centric can grow the network and make it easier for businesses to swiftly adopt the technology. Determining a BaaS platform with an identity-based consensus method that enables businesses to use approved IDs is another option.

The mentioned factors will assist you in choosing the ideal blockchain as a service solution for your business needs.


Cost Comparison of Blockchain as a Service and Self-Hosted

The total cost of ownership for a Self-Hosted Blockchain App is anticipated to be significant due to start-up costs (infrastructure, personnel, software, license, hardware, consulting, and more), retirement costs (decommissioning of server racks), and ongoing operating expenses (monitoring, cost per transactions, bandwidth expenses).

Also, under the earlier model, the price of developing and deploying a single smart contract can reach $100,000.

For about USD 0.29 per permitted CPU hour, a blockchain application that is hosted in the cloud as part of the BaaS offering can be purchased. You will have to pay as you go, which means you will only have to pay for the units of services you utilize.

The real expenses under the BaaS architecture vary depending on variables like transaction rate, maximum concurrent transactions, transaction payload size, and more.

As an example, the cost of Amazon AWS Managed Blockchain Service is influenced by peer nodes, data written to the network, network membership, data transport, and peer node storage.


BaaS: Final Thoughts

Blockchain as a Service is an intriguing solution that can help your company get a comparative advantage. BaaS prepares for the future without requiring major investments in research, planning, resources, and infrastructure. It also allows you to adopt the role of a leader and pioneer among your colleagues in the sector. A trusted BaaS partner can assist you in taking the next great technological leap by managing risks proactively.


That’s it for today.

What do you think about Blockchain as a Service?




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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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