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What is Blockchain as a Service (BaaS)?
The establishment of third-party and maintenance of cloud-based networks in the business of developing blockchains is referred to as Blockchain as a Service. It is a new development in the growing field of blockchain technology. Blockchain technology is used in cryptocurrency transactions and has broadened the address for secure transactions of all kinds without involving middlemen. The demand is too high for the hosting services.
Blockchain as a Service is totally based on the software as a service model and works in the same way. It allows consumers to purchase cloud-based solutions to build, host, and operate their own blockchain apps. The cloud-based services provider makes the infrastructure operational.
Blockchain as a Service is boosting blockchain adoption across the world for businesses. In the race to adopt blockchain technology, consumers and businesses are willing to invest in BaaS. It provides an external services provider to fill in all the necessary blockchain technology for a fee. After it is created, the service provider handles all the complex back-end operations for the clients.
Key Features Of BaaS
Some of the key features of BaaS are:
- Faster Deployment: It enables speedier blockchain implementation for organizations without the need for extensive configuration and also delivers out-of-the-box services.
- Security Services: It provides CA certificate services and supports cryptography algorithms, and also creates a multi-dimensional blockchain security system.
- Management of Chain Codes: The user is allowed to manage the smart contract, also called chain code, in the organization and the business. It also includes the period of overwriting the installation, creating the instance, and updating.
- Application Access: It also includes standard fabric SDKs, ant blockchain SDKs, built-in information, and development certificates.
How does it work?
This is a graphical demonstration of the working model of Blockchain as a Service. BaaS is like a blockchain toolkit and utility system under the project. It is the same as the web hosting provider. When a developer develops a website, they run all the content on their own computers first.
They hire staff or sign up with a hosting provider company such as Amazon or HostGator. They take care of the company's infrastructure and maintenance issues.
When a user signs up for a Blockchain as a Service, they enter into an agreement and agree to set up all the necessary blockchain technology and infrastructure for the customer for a service fee as mentioned in the contract agreement.
Blockchain connects to nodes on behalf of users to maintain the necessary infrastructure and technologies.Based on the requirements, the BaaS provider configures the blockchain networks on different registers, such as Ethereum, Bitcoin, BlockApps, etc.
The BaaS provider is in charge of preserving all blockchain-related artifacts and keeping the infrastructure operational. It does support different activities such as optimization of resources, bandwidth management, system monitoring, as well as securing the data from hacking attempts. The user can focus on their core business and strategies while counting on the BaaS provider to handle its performance. Using blockchain as a service, the user can empower the executed workloads in environments that demand an ideal degree of fault tolerance.
Pros and Cons Of BaaS
Many companies are willing to invest in blockchain as a service. To do so, every potential customer must analyze the opportunities and threats related to blockchain as a service. There are a lot of pros and cons to the blockchain as a service.
Pros of Blockchain as a Service
- Investor Transparency: Investors are allowed not only to store and manage information, but also on blockchain, which allows a high level of transparency and traceability of transactions that investors are learning to expect in the digital age.
- Cost Efficiency: Businesses look for value beyond cost efficiency during an agreement with a service provider. Blockchain implementation and maintenance tasks for a BaaS client can help businesses save money.
- Simple to Use: Baas providers mostly provide customizable templates and plugin modules that can be set for short time frames by customers with little knowledge of programming. It helps businesses with learning curves and investments that are involved in the research and planning stages.
- Testing: The most exciting outcome of BaaS is the service that allows users to experiment with new technology without the risk of deployment in their local organizations. Users are able to test their code within the circle of the BaaS, which results in the tested features' feasibility.
Cons of Blockchain as a Service
- Ignorant: While rushing into investment in BaaS technology without proper knowledge may put their organization at great risk of failure and wasted investment, one should not ignore the knowledge without doing a proper investigation into BaaS.
- Use of energy: BaaS technology uses a lot of energy in order to provide a better service. People who are working to reduce their energy use are seeing a massive outcome both economically and environmentally.
- Still New: The startups developing blockchain technology aren’t using verified algorithms, which creates a lot of problems for new users. It works on the principle of dispersing information across the globe, and the servers are hosted in third-party countries or in places that are under economic sanctions.
- Scalability: In the environment created by decentralization, if usage drastically increases on an application, then the other process could be embedded. Users must understand the compatibility and select the working method as per their needs and compatibility.
Major players in the BaaS technology include
- Microsoft: In 2015, Microsoft signed an agreement with consenSys to launch Ethereum as a service on Microsoft Azure.
- Amazon: Amazon has introduced its own managed blockchain technology that makes it easy to manage and create scalable blockchain networks.
- IBM: IBM blockchain technology enables organizations to digitize transactions over secure and distributed networks, increasing transaction efficiency.
Summary
BaaS has become the catalyst that led to the global adoption of blockchain technology and a deeper penetration across various sectors and businesses.
The World Economic Forum mentioned the BaaS technology, which could lead to massive trade financing all over the world.The potential advantages of BaaS in the context of supply chain processes such as transparency and traceability become memorable and provide a significant boost to the BaaS market in the upcoming days. BaaS has become a great opportunity to take advantage of blockchain.
Further Reading
Blockchain
Blockchain as a Service Wikipedia
Top Blockchain platform
