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What is Blockchain as a Service and How Does it Work?

Ranjan Dailata
Solution Architect at | + posts

Ranjan Dailata is an Aezion Solution Architect and Aezion Labs Lead.

What is Blockchain as a Service and How Does it Work?

Beyond cryptocurrency, blockchain technology has proven itself as a viable foundation for countless business activities, including the management of cloud infrastructure to support the creation of blockchain applications. This particular application for blockchain technology is referred to as blockchain-as-a-service (BaaS).

BaaS came with the natural progression of blockchain’s use for securing transactions of all kinds, giving rise to the demand for blockchain-based hosting services. As such, the development of BaaS was obvious, and its widespread adoption makes it one of the promising developments in blockchain so far.

What is Blockchain as a Service?

Given the capabilities of blockchain technology, businesses have become more and more open to its use through the years. However, one of the most difficult aspects of blockchain adoption is the technical complexity involved with configuring and operating it. Third-party solutions like blockchain-as-a-service (BaaS) eliminate this labor.

Like other “as-a-service” solutions, BaaS is a third-party solution in which businesses pay on a monthly or annual basis. In exchange for a fee, clients gain access to hosted infrastructure and managed services to help them build and run their blockchain-based applications.

BaaS infrastructure is based entirely in the cloud, giving companies easy access to the resources, tools, and services that they’re paying for. From a practical perspective, BaaS is similar to a web host, offering functionality that helps businesses support the back-end operations of their app or platform.

Since the BaaS provider is responsible for managing the underlying infrastructure (e.g., bandwidth, resource allocation, data security, etc.), this service takes the typical complexity associated with leveraging the blockchain out of the equation for the end client. Instead, businesses can tap into blockchain without getting caught up in its time-consuming operation.

Who is Using BaaS?

There are many large players in the BaaS space, including Microsoft and Amazon. Since 2015, Microsoft has offered blockchain-as-a-service for its Microsoft Azure cloud platform with the help of ConsenSys. Microsoft’s solution is based upon the Ethereum blockchain.

Meanwhile, Amazon introduced the Amazon Managed Blockchain in 2019 by combining open-source frameworks like Hyperledger Fabric and Ethereum. Other players in the BaaS space include R3, a global consortium of financial institutions that invested in the creation of Corda, a distributed financial ledger. PayStand has also joined the BaaS movement.

Selecting a BaaS Partner

Companies interested in leveraging blockchain technology could certainly pursue a self-hosted blockchain option. However, the reason that BaaS came to be is that the sheer technical complexity associated with setting up and managing blockchain infrastructure makes for a costly, time-consuming, and risky endeavor.

With this in mind, companies that do not have the technical know-how or resources to pursue their own self-hosted blockchain solution will likely turn to a BaaS partner. However, selecting a BaaS partner requires planning and forethought. If you’re thinking about using BaaS for your business, here are some considerations to keep in mind.

Prioritize Scalable Solutions

Locking your business into a blockchain solution that is not properly supported for growth will spell big trouble for your organization. For this reason, it’s essential that you compare BaaS partners based on their scalability and experience working with growing companies.

When possible, choose a partner that has demonstrated efficiency in your industry and with a company of your size in the past. Additionally, consider your own goals for growth and ask questions about how a given partner is able to support that growth through resource allocation and other strategic moves.

Seek Out a Security Expert

Data security and governance initiatives are a front-of-mind concern for today’s businesses, and a BaaS project is no exception. Properly securing a blockchain network and all of the data it contains is a feat in and of itself, which is why your BaaS partner must be experienced in this regard.

Oftentimes, the right BaaS partner will take on the role of security mentor for your company, offering resources to help your team understand the best practices and intricacies of blockchain security while guiding your implementation.

To ensure that a partner meets your needs, read through any implementation plans in detail before committing, and be sure to ask questions about their security qualifications and standards.

Create a User-Friendly Environment

Whenever you’re considering a BaaS offering, you need to fully evaluate each option based on its ease of use and user-friendliness. Remember that the number one deterrent to adopting blockchain in the business space is the complexity associated with blockchain technology. Failing to eliminate that complexity will make it difficult for you to foster adoption within your organization.

As you evaluate each BaaS offering, consider the normal workflow of your teams along with the tech-savviness of various departments. For instance, your IT team might not have a problem gliding through their new workflow. However, if you need members of the finance or service department to interact with the same tools, they may not have the same technical background to help them through it.

Before adopting a BaaS solution, remember that you should involve key stakeholders and put the system through a complete test to make sure it will work for your business in the long term.

Let Aezion Support Your Blockchain Strategy

When done properly, implementing BaaS represents cost savings, time savings, and the addition of a powerful, blockchain-based solution that can help your business grow exponentially. However, the success of this endeavor relies almost entirely on choosing the right BaaS partner.

Whether you’re new to the world of blockchain or just looking for a new solution to help your business take one step further into this promising space, Aezion can help. Our team of data strategy experts are standing by to help guide your business in the selection and development of new blockchain solutions, without the typical complexity and risk.

Interested in learning more? Reach out to Aezion’s team today to get started!

Ranjan Dailata
Solution Architect at | + posts

Ranjan Dailata is an Aezion Solution Architect and Aezion Labs Lead.

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