Blockchain-as-a-Service (BaaS)

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Blockchain-as-a-Service (BaaS)

What Is Blockchain-as-a-Service (BaaS)?

Blockchain-as-a-service (BaaS) is the establishment and operation of cloud-based networks by a third party for firms who create blockchain applications. Third-party services are a relatively recent phenomenon in the rapidly expanding area of blockchain technology. The use of blockchain technology has expanded well beyond its most well-known usage in bitcoin transactions, addressing safe transactions of all types. As a consequence, there is an increase in the demand for hosting services.

Key Takeaways

  • Blockchain-as-a-service (BaaS) is a term that refers to third-party cloud-based infrastructure and administration for enterprises that create and operate blockchain applications.
  • BaaS is similar to a web host in that it handles the back-end operations for a blockchain-based app or platform.
  • BaaS might be the spark for mainstream use of blockchain technology.

Understanding Blockchain-as-a-Service (BaaS)

BaaS is related to and based on the software as a service (SaaS) paradigm. It enables users to construct, host, and manage their own blockchainapps and associated operations on the blockchain using cloud-based technologies. Simultaneously, the cloud service provider maintains the infrastructure nimble and functioning.

BaaS is considered as a breakthrough in the larger blockchain ecosystem that will increase blockchain adoption across organizations.

Major players in the BaaS space include:

  • In 2015, Microsoft collaborated with ConsenSys to launch Ethereum blockchain-as-a-service on Microsoft Azure. 1
  • Amazon has launched Amazon Managed Blockchain, a service that “makes it easier to develop and administer scalable blockchain networks” by using open source frameworks like as Ethereum and Hyperledger Fabric. 2
  • R3, a collaboration of major financial institutions that created Corda, a distributed financial ledger. 3
  • PayStand is a company that specializes in transmitting and receiving payments between businesses. 4
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Consumers and organizations are becoming more eager to embrace blockchain technology. The technological intricacies and operational overhead required in building, setting, and running a blockchain as well as maintaining its infrastructure, on the other hand, often function as a barrier.

For a price, BaaS allows an external service provider to put up all of the essential blockchain technology and infrastructure. Once formed, the provider continues to manage the client’s complicated back-end tasks.

The BaaS operator often provides support activities such as bandwidth management, appropriate resource allocation, hosting needs, and data security measures. The BaaS operator frees the client to concentrate on the essential job: blockchain functionality.

Example of Blockchain-as-a-Service (BaaS)

The diagram below depicts the working paradigm of Blockchain-as-a-Service Hyperledger Cello, a Hyperledger-based blockchainmodule toolset and utility system.

Image by Julie Bang © Investopedia2020

In reality, the job of a BaaS provider is identical to that of a web hosting provider. All of the website material is created and operated on the website developers’ own computers. They may engage support personnel or use an external hosting provider such as Amazon Web Services or HostGator. These third-party firms are in charge of infrastructure and maintenance.

BaaS might be the driver for further and deeper use of blockchain technology across numerous industrial sectors and enterprises. Instead of developing and managing their own blockchains, businesses of all sizes may now easily outsource the technically challenging job and concentrate on their core competencies.

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