When we hear the word blockchain, most of us think of cryptocurrencies. However, a blockchain is simply a way of recording information which is decentralised and harder to cheat or hack. As such, it has found several use cases across industries and revolutionised numerous processes, including data management, supply chain management, and even voting.

Given its benefits, many businesses wish to adopt blockchain technology in their workings. However, not every company has the technical ability to deploy 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 businesses to harness the benefits of decentralised networks without knowing what is under the hood.

They can use these services to build, host, and operate their blockchain apps and related functions, without any technical knowledge of how blockchain systems work. These services generally also include cloud hosting solutions to store and manage all the company's blockchain data.

It is similar to Software-as-a-Service (SaaS), a cloud-based solution in which software providers 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. Per the contract, the partner agrees to set up the blockchain technology and infrastructure matching the client's needs for a service fee.

Also Read: Crypto tourism is a real thing. Here's a quick guide

The BaaS partner then deploys essential resources using blockchain technology and infrastructure. They set up and maintain blockchain-connected nodes on behalf of their client and configure the tech according to the client's needs.

The BaaS partner is also responsible for keeping the infrastructure up and running. They assume the responsibility for support activities such as bandwidth management, resource optimisation, incident management, system health monitoring, and security surveillance (like preventing hacking attempts).

Why is there a need for BaaS?

The benefits of blockchain for business are obvious: enhanced security, greater transparency, instant traceability, automation and increased efficiency.

However, due to technical and operational complexities, most businesses are afraid of going down the rabbit hole of distributed ledgers themselves. Not to mention the overheads involved in creating, configuring, and operating a blockchain. Businesses would much rather outsource all these responsibilities to a third party, the BaaS provider.

Also Read: Nothing may be on to something — brands that have their own NFTs to make a mark

Besides benefiting businesses, BaaS will also help blockchain and crypto adoption. These service providers act like catalysts, bringing blockchain technology to various industries, sectors and businesses. This kind of institutional adoption will benefit mainstream acceptance of the technology and the digital assets that go with it.

BaaS is already a large industry

Despite being a relatively new development in the field of blockchain technology, BaaS has quickly grown into a large industry. Many of the biggest names in the tech world have dipped their toes into this sector, including Microsoft and Amazon.

Multinational technology corporation Microsoft partnered 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.

Also Read: A quick guide on how money is made in the metaverse

(Edited by : Pihu Yadav)

First Published:Jul 13, 2022 1:53 PM IST