Do you know that 44% of organizations have adopted blockchain globally? Blockchain technology provides the most secure online transactions which have impacted all the industries. Due to its numerous benefits, soon it will become a part of many sectors of different niches.
Did you know!
As per the recent survey, blockchain technology’s global market size is expected to take a rise to $ 39.7 billion by 2025, at a splendid compound annual growth rate (CAGR) of 67.3% during 2020-2025.
We cannot deny that blockchain is one of the fastest-growing technologies in the IT sector today with its extensive real-world uses. But still, industries are struggling with questions about how to leverage the power of blockchain.
Can BaaS act as a potentially workable solution to this problem? This write-up will shed some light on Blockchain-as-a-Service (BaaS) solutions for business functions and its business benefits.
So, without wasting any more time, let’s dig in!
What is Blockchain-as-a-Service all about?
It is the third-party creation and management of cloud-based networks for organizations to develop blockchain-based applications. These services are a new evolution in the field of blockchain technology.
Over the years, blockchain has started its cloud journey. Blockchain technology has expanded beyond its most popular use in cryptocurrency and has become widespread to witness all kinds of transactions.
Moreover, the BaaS business model’s emergence is a major development and an essential milestone for the organizations.
Blockchain-as-a-service allows all types of businesses to access blockchain technologies without investing in in-house development.
The BaaS model enables organizations to access a blockchain provider’s service, in which they can develop blockchain applications at a minimal cost. This advantage has made it an essential part of the blockchain technology trend.
Why do Organizations Need to Adopt a BaaS Business Model?
The growing demand for blockchain services based on cloud platforms can be seen as one of the significant BaaS market trends among large enterprises.
This may provide at least a partial solution to the problems inherent in the large number of transactions that underlie the entire global economy today.
The impact of BaaS on the business came in the form of massive demand for the service, which can be seen in the fact that the blockchain-as-a-service (BaaS) market will grow to hit USD 24.94 billion by 2027.
Organizations and individuals are keen to adopt blockchain technology and are increasingly leveraging their perks and benefits. But technical issues and operational overhead costs related to the development, configuration, operation, and maintenance of infrastructure act as a constraint.
However,Blockchain as a Service is currently being seen as a potentially viable solution for this issue. Selecting a blockchain infrastructure in BaaS allows businesses to acquire the skill set needed for operating the blockchain infrastructure.
Additionally, the investment required to enter the technology segment is also low as service agreements can be scaled up or even terminated within short notice with ease.
It naturally limits the number of risks that one has to deal with that have been developed in-house.
BaaS opportunities for businesses are considered ideal for organizations that outsource technical aspects and have little to do with blockchain’s working mechanisms. It enables companies to gain an understanding of technology without developing their proprietary blockchain.
Real-World Applications of Blockchain as a Service
Many industries are integrating baaS solutions for supply chain management, payments & transactions, Smart Cards, and many more.
Blockchain development services are emerging as ideal solutions to many challenges, such as eliminating intermediaries, lack of transparency, etc.
Let’s take a glance at the real-world applications that is tested and hosted on a BaaS platforms:
The blockchain offers an abiding documentation tracking system. In simple words, by keeping the documents on the blockchain, it makes sures that all contestants have equal access to the same information.
Besides, the blockchain is immutable, which means no participant can make alterations in the record. Thus, ensuring that the documents are safe and secure.
Most of the applications that are not centralized need secure data storage. Those applications can be benefited by storing data on the blockchain technology. By storing data on a decentralized blockchain, the risk of data loss is reduced, while blockchains are uniquely extensible.
Highly standardised organizations leverage from the secure and enduring attribute of storing data on the blockchain.
Blockchain with smart contracts provides a platform for contract execution. And this facilitates a higher degree of transparency in the contract. The blockchain’s distributed nature means that all parties are equally informed as there is a “single source of truth”.
As a result, contracts are processed in a more efficient manner that also lets payments to be done without any delay.
The blockchain’s flexibility and related technologies lends itself to many applications that are not explored yet. Blockchain as a Service also offers a chance to find these applications without making any big commitments.
All they have to do is hire blockchain developers in India with blockchain expertise that can help you fully adopt blockchain capabilities.
How Does Blockchain-as-a-Service Model Work?
A Blockchain as a Service provider organises and manages blockchain technology and framework for users. The client then pays a certain amount to the BaaS provider to install and handle blockchain connected nodes on its behalf.
It is the duty of the BaaS operator to keep the blockchain infrastructure operational. In addition, the Blockchain as a Service operator takes care of activities such as bandwidth management, appropriate allocation of resources, and hosting requirements.
Using the BaaS model, customers can focus more on their blockchain’s functionality without having to worry about their core areas and issues related to performance and infrastructure.
Here is the graphic representation that illustrates the working model of the BaaS hyperledger cello – a BaaS-like blockchain module toolkit and utility system under the Hyperledger project.
We can say that the role of Blockchain-as-a-service is quite similar to that of the web hosting provider. You make innovative websites that receive millions of hits daily, host that website on your server, and administer all tasks yourself, or by hiring resources.
The second way is to host your site at any web hosting provider such as Microsoft Azure or Amazon Web Services and give them the authority to manage all maintenance and infrastructure problems.
BaaS works similarly to the second method. Thus, it relieves you from the burden of handling the framework of the blockchain application.
Top 3 Blockchain-as-a-Service Providers
Microsoft provides Blockchain as a service after establishing Azure Blockchain Service in 2015. It also collaborated with Consensys to build Microsoft Azure.
Microsoft Azure’s Blockchain Service lets the users create public, private, and consortium blockchain environments with industry-class infrastructure.
Amazon has also come up with its Blockchain as a service called “Amazon Managed Blockchain”. It’s a completely managed service that lets its users establish and handle an extensible blockchain network without any hassle.
ChainStack – a blockchain as a service platform, launched its managed R3 Corda service that facilitates enterprises to have a one-click deployment of cloud-based Corda nodes.
The managed R3 Corda platform minimizes blockchain nodes’ deployment time by a few minutes, allowing enterprises to host the Corda network in a few clicks.
Cost of BaaS Offering Vs Self-Hosted Blockchains
Until now, we have looked into the BaaS environment and how Blockchain- as-a-Service is impacting business across the globe. Now, let’s analyze its cost-effectiveness with Self-Hosted blockchain.
If we talk about the cost of self-hosted blockchain apps, the total cost of ownership is anticipated to be higher due to start-up and operating costs.
Creating and deploying a single blockchain smart contract under this model can cost up to a hundred thousand dollars or more.
As a part of the BaaS offering, a blockchain application hosted in the cloud can be purchased for USD 0.29 per CPU hour allocated. It means that you have to pay as you go which signifies you only have to pay for the units of services used.
The actual cost of the BaaS model varies on factors such as transaction rate, the maximum number of concurrent transactions, payload size on the transaction, and more.
Factors that can help to choose the right BaaS Platform are:
- Smart Contracts Integration
- IAM(Identity Access Management) Platforms
- Different Runtimes and Frameworks
- Identity-based Consensus Mechanisms
All these above-mentioned factors will help you choose the right blockchain as a service solution depending on your business needs.
Blockchain-as-a service is a promising contribution that helps organizations become future-ready with scalable solutions built on blockchain technology. It can help your business take a competitive advantage without investing in research, planning, and infrastructure.
So, considering the business benefits of the Blockchain-as-a-Service framework, to make your business processes more robust and secure.