Explained: Blockchain-As-A-Service (Boss)
When we hear the word blockchain, most of us think of cryptocurrencies. However, a blockchain is simply a way of registering information that is decentralized and more difficult to cheat or hack. As such, it has found several uses across industries and revolutionized a number of processes, including data management, supply chain management and even voting.
Given the benefits, many companies want to use blockchain technology in their work. However, not all companies have the technical ability to distribute and manage these solutions efficiently. This is where Blockchain-as-a-Service comes into the picture.
What is blockchain-as-a-Service (BaaS)?
Blockchain-as-a-Service allows companies to take advantage of decentralized networks without knowing what’s under the hood.
They can use these services to build, host and operate blockchain apps and related functions, without any technical knowledge of how blockchain systems work. These services generally also include cloud hosting solutions for storing and managing all the company’s blockchain data.
It’s similar to Software-as-a-Service (SaaS), a cloud-based solution where software vendors develop unique applications for businesses over the Internet. Like SaaS, BaaS is the fastest way for a company to develop a blockchain-based application that meets its individual business requirements.
How does BaaS work?
Companies usually sign an agreement with a BaaS partner. Under the contract, the partner agrees to set up the blockchain technology and infrastructure that matches the customer’s need for a service charge.
The BaaS partner then distributes key resources using blockchain technology and infrastructure. They set up and maintain blockchain-connected nodes on behalf of their client and configure the technology according to the customer’s needs.
The BaaS partner is also responsible for keeping the infrastructure running. They take responsibility for support activities such as bandwidth management, resource optimization, event management, system health monitoring and security monitoring (such as preventing hacking attempts).
Why is there a need for BaaS?
The benefits of blockchain for businesses are obvious: increased security, greater transparency, immediate traceability, automation and increased efficiency.
However, due to technical and operational complexity, most companies are afraid to go down the rabbit hole for distributed ledgers themselves. Not to mention the overheads involved in creating, configuring and operating a blockchain. Companies would much rather outsource all this responsibility to a third party, the BaaS provider.
In addition to benefiting companies, BaaS will also help blockchain and crypto adoption. These service providers act as catalysts, bringing blockchain technology to various industries, sectors and businesses. This type of institutional adoption will benefit the general acceptance of the technology and the digital assets that come with it.
BaaS is already a large industry
Despite a relatively new development in blockchain technology, BaaS has rapidly grown into a large industry. Many of the biggest names in the technology world have dipped their toes in this sector, including Microsoft and Amazon.
The multinational technology company Microsoft teamed up with ConsenSys to introduce an Ethereum BaaS back in 2015. On the other hand, Amazon has introduced a blockchain-as-a-service that “makes it easy to create and manage scalable blockchain networks.” This service is called Amazon Managed Blockchain.
(Edited by : Pihu Yadav)
First published: IST
