What is Blockchain-as-a-Service & its Business Benefits?
The real-world applications of blockchain are expanding by the minute. But the resources and skill sets needed for developing blockchain applications and hosting them are neither cost effective nor popularly available. Is blockchain as a service for business the answer of how to make blockchain technology accessible to an audience?
In this article, we are going to look into the BaaS solution for business works, the benefits of blockchain as a service, and how to choose the best BaaS providers operative in the market today.
Table of Content
- What is Blockchain as a Service?
- How Does Blockchain as a Service Business Model Works?
- How Blockchain as a Service is Shaping Businesses?
- The Region Wise Adoption of Blockchain as a Service?
- The Top Blockchain as a Service Providers
- A Look Into Self-hosting Blockchain Applications
What is Blockchain as a Service?
For offering the benefits of blockchain based services to a wider audience, the technology has started being offered in the cloud as a service business model. On the operational front, it is more or less similar to the SaaS, PaaS, and IaaS models which enables using cloud-based apps and storage.
It allows businesses of all types and sizes to access blockchain based technologies without investing in the in-house development. The BaaS model enables companies to access the blockchain provider’s service wherein they can develop blockchain applications at minimal cost. This benefit is what has made it a key part of the blockchain technology trends.
The only limitation of the BaaS solution for business is that it asks for a certain level of centralization since the transactions have to be funneled through the host’s blockchain services. And because the answer to how blockchain is used in business lies at the center of decentralization, companies tend to be wary of its adoption.
- Blockchain-as-a-Service is third party cloud infrastructure and management that businesses use for developing and managing blockchain applications.
- It operates as a web host which runs an app’s backend.
- BaaS acts as a catalyst which leads to widespread adoption of blockchain technology.
How Does Blockchain as a Service Business Model Works?
Blockchain as a service business model describes the process through which third parties install, host, and maintain a blockchain network on the behalf of organizations. The service provider offers setting up of blockchain infrastructure and technology in return for fees.
In many ways, the role of blockchain as a service for business is similar to that of a web hosting provider. It enables customers to make use of the cloud based solutions for developing and hosting blockchain applications and smart contracts in the ecosystem managed by the provider.
Here is a visual showcasing the working of Hyperledger Cello Blockchain-as-a-Service, which is a BaaS-like blockchain module utility system and toolkit under the Hyperledger project.
The BaaS integration in traditional business provides support around allocation of resources, bandwidth management, data security features, and hosting requirements. The biggest impact of BaaS on business is that the enterprises can concentrate on their main business without thinking of the complexities around blockchain operation.
How Blockchain as a Service is Shaping Businesses
Businesses and consumers are willing to adapt blockchain technology. But the operational overhead cost related to development, configuration, operation, and maintenance of infrastructure along with the technical issues act as a barrier. The advantages of blockchain for SMEs, no matter how massive, are very resource intensive and energy consuming – thus preventing the technology’s mass adoption.
Renting a blockchain infrastructure in BaaS allows businesses to acquire the skillset needed for operating the blockchain infrastructure. Additionally, the investment needed for entering the technology segment is also lowered, since the service agreement can be easily scaled up or even terminated within short notice.
It offers a way for businesses to stay at the edge of technology without any unnecessary risks.
BaaS for startups
The opportunities of BaaS for businesses, especially small businesses, is deemed ideal for organizations which outsource the technological aspects, and are not very hands-down involved with the blockchain’s working mechanism. It enables these firms to get the understanding of the technology without having to develop their proprietary blockchain.
The integration of BaaS solutions is being used by a number of industries for things like identity management, supply chain management, and payments. Blockchain development services are emerging as the ideal solution for a number of SME challenges like elimination of middlemen, lack of transparency, etc.
Use cases of Blockchain as a Service for business
- Document tracking – Blockchain technology offers a distributed, immutable document tracking system. By keeping the documents on blockchain, all the participants are given equal access to the information. Additionally, blockchain technology is immutable, thus ensuring that the documents are secured.
- Data storage – With the data stored in the decentralised blockchain, the amount of data loss risk is reduced by manifold. The regulated industries like healthcare, real estate, etc benefit a lot from this immutable, secure facility of data storage on blockchain.
- Contract execution – Under the smart contracts service of blockchain, a platform is provided for the contract execution which promises high transparency levels. Its distributed nature implies that all the parties should be equally informed.
The benefits of Blockchain as a Service lies in the unraveling of the several use cases that are yet to be emerged. It offers enterprises an opportunity to work on those use cases without making any large term commitments. All they would have to do is partner with a blockchain service company and then fully embrace Blockchain’s capabilities.
Now that we have looked into how is blockchain as a service valuable for SMEs and enterprises, let us look into its regional adoption.
The Region Wise Adoption of Blockchain as a Service?
The impact of BaaS on business has led to a huge demand for the service – a sign of which can be seen in the fact how the BaaS market growth is poised to be USD 24.94 Bn by 2027.
The worldwide market of BaaS is big around the US, Mexico and Canada. One prime reason behind this is the presence of SMEs and large businesses operating in the US location along with a willingness to combine the technology with the public utilities services.
Europe has also been seen as the leading BaaS market. One of the major drivers of blockchain and BaaS adoption has been the government support from different countries.
The Asia Pacific (APAC) region is the third-most biggest market for the BaaS integration. Driven by the BaaS integration in traditional businesses and growing investment in Japan, China, and South Korea, the technology is poised to grow in the region.
To take the adoption of blockchain as a service for business further, a number of tech companies have emerged as BaaS providers. Here are a few of them:
The Top Blockchain as a Service Providers
A Look Into the Alternative – Self-hosted Blockchain
Up until this point, we have looked in the BaaS ecosystem and how Blockchain as a Service is influencing the small business, in addition to the list of top providers. While it all suggests that it is a good option to go with this approach, businesses can in fact lose out on the essence of decentralization – the foundation of blockchain fundamentals.
So what is the alternative? The answer is Self-Hosted Blockchain.
When we talk about the Self-Hosted Blockchain app cost, the ownership amount tends to be a lot higher because of the startup costs, retirement costs, and operational costs. Moreover, the amount of developing and deploying a smart contract under this model can amount to up to hundred thousand dollars or more.
In contrast, a blockchain app hosted on cloud as a BaaS offering can be around $0.29 per allocated CPU hour. This means, businesses would only have to pay as they go and only for the service units used.
The costs of the BaaS model vary on factors such as number of concurrent transactions, transaction rate, and the payload size on transactions, etc.
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