Blockchain technology is on rise, but the companies that really want to use it, may encounter a few obstacles: it’s new, it’s relatively unknown and its implementation in terms of any technological change entails organizational risks. In order to offer the benefits of blockchain to the wider business community & removing the real time difficulties, several tech giants decided to offer blockchain technology through the cloud as Service business model. Blockchain as a Service (BaaS) is poised to play an important role in the information technology sector for years to come.
Introduction to Blockchain as a Service (BaaS)
Blockchain as a Service (BaaS) offers a cloud-based solution to build, host and use their own blockchain apps, smart contracts and functions on the blockchain while the cloud-based service provider manages all the necessary tasks and activities to keep the infrastructure agile and operational. It is a captivated offering in the blockchain ecosystem that is indirectly aiding the blockchain adoption across businesses. It is based on, and works similar to, the concept of Software as a Service (SaaS) model.
Why Blockchain as a Service
Business are increasingly want to adapt to blockchain technology. However, the technical complexities and operational overhead involved in creating, configuring, and operating the blockchain, and maintaining its infrastructure, often act as obstacle to its mass adoption.
Organizations face multiple challenges with using Blockchain technology
- Understanding of the future of blockchain technology
- Complexity in setting up of Blockchain networks
- technical challenges in onboarding new participants to an existing network
- Implementation of Smart contracts being too technology centric
- Allowing for secured channels of communication between specific participants of a network
- Different configurations w.r.t. Security etc.
- Developing application logic which is Blockchain native
BaaS allows the blockchain part of the technology to be relatively invisible. And if not invisible, it’s at least translucent. It’s a step in the right direction. Allowing someone else to take care of the complex backend of blockchain ecosystem for you, allows you or your business to benefit from blockchain technology without really having to deal with blockchain technology. For e.g. - HTTPS (Hypertext Transfer Protocol) as a technology is completely useful as a way to enable secure online business, and there’s nearly no sign of it when used by end users. It’s omnipresent, yet invisible. This is how you know it’s a truly useful piece of technology. Blockchain as a Service is targeting this state of art.
How Does BaaS Work?
As mentioned above, In BaaS, an external service provider sets up all the necessary “blockchain technology and infrastructure” for a customer. By paying for BaaS, a client pays the BaaS provider to set up and maintain blockchain connected nodes on their behalf. A BaaS provider handles the complex back-end for the client and their business.
The BaaS operator also takes care of support activities like bandwidth management, suitable allocation of resources, hosting requirements, and provides security features like the prevention of hacking attempts. Leveraging BaaS model, the client can now focus on their core job – the functionality of their blockchain – instead of worrying about infrastructure and performance related issues.
BaaS would work similar to that of a web hosting provider. A robust website has been built which is capable of getting millions of hits per day. One can host and run that website on their own computer/server from office and take care of all the maintenance and support work themselves or by hiring support staff. However, another hassle-free option is to host the website on an external web hosting provider like Amazon Web Services or HostGator, and let them take care of all infrastructure and maintenance issues. BaaS works similar to the second option and allows you to focus on your core website functionality.
BaaS is a like blockchain module toolkit and utility system under the Blockchain Engine. Below provides a graphic demonstrating the working model of Blockchain-as-a-Service.
In the second part of this blog series, we will cover the limitations and advantages of Blockchain as a Service model and how HCL’s CoTrust platform can enable accelerated enterprise adoption of blockchain technologies.