What is Blockchain as a Service? (BaaS) and How to Select the Right BaaS Platform?

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Blockchain as a Service is expected to play a crucial role in IT in the coming years. It has started to emerge exponentially because more and more companies now understand the advantages of the blockchain. However, they cannot implement blockchain for a variety of reasons.

Blockchain-as-a-Service providers like IBM, Microsoft Azure and other big companies have discovered BaaS to make blockchain implementation simpler for organizations whose core competencies remain in fields other than IT. It helps organizations focus more on their core areas while not worrying about the development space.

What is Blockchain as a Service?

Blockchain as a Service (BaaS) is a blockchain service offering that allows customers to use cloud-based services to develop, use and host their blockchain apps, functions and smart contracts.

BaaS includes a cloud-based service provider that manages tasks to keep the infrastructure operational and agile. It holds the promise to speed up the blockchain adoption across different businesses.

Businesses and individuals both are willing to implement the blockchain technology. But, the technical complexities in creating, operating and maintaining the blockchain’s infrastructure act as obstacles to its mass adoption. Blockchain as a Service offers solutions to relieve companies of the hurdles of new technology.

How Does BaaS Work?

A BaaS provider sets up and manages the blockchain technology and infrastructure for a customer. A client pays some fees to the BaaS provider for setting up and handling blockchain connected nodes on their behalf. A BaaS provider manages the back-end for the client and their business.

It is the responsibility of a Blockchain-as-a-Service operator to keep blockchain infrastructure running. A BaaS operator also takes care of the activities like proper allocation of resources, bandwidth management and hosting requirements. Using a BaaS model, clients can focus more on their core areas and the functionality of their blockchain without worrying about performance and infrastructure-related issues.

Consider the blockchain-as-a-service similar to a web hosting provider.

You build creative websites that get millions of hits every day, host that website on your server and manage all the maintenance work yourself or by hiring resources. Another way is to host your website on any web hosting provider such as Amazon Web Services or Azure and let them handle all maintenance and infrastructure issues.

BaaS works similar to the second method, thereby relieving you from the burden of managing the infrastructure of a blockchain app.

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Some of the popular BaaS providers in the market:

Microsoft

Microsoft is one of the first vendors to provide BaaS when it founded Azure Blockchain Service in 2015. They teamed up with Consensys to develop Microsoft Azure, which is based on the Ethereum Blockchain. The service aims to enable developers and enterprise clients to experiment with blockchain technology with a “one-click cloud-based blockchain development environment.”

Microsoft Azure’s Blockchain-as-a-Service also allows its users to build public, private and consortium blockchain environments with industry-grade frameworks and bring their blockchain apps to market. By integrating the AI-based virtual assistance system, Cortana, Azure helps its users understand and implement distributed ledger technology.

Features of Microsoft Azure:

1. Supports Multiple Blockchain Frameworks, including Quorum, Corda, Hyperledger Fabric and Ethereum.
2. Easy Deployment with Azure CLI, Azure Portal or Visual Studio Code with Azure Blockchain Extension.
3. Built-in Consortium Management to manage members of the network.
4. Complete Monitoring and Logging

Amazon

Like other large organizations, Amazon has also come up with its BaaS offering called “Amazon Managed Blockchain.” Amazon Managed Blockchain is a fully managed service that allows its users to set up and handle a scalable blockchain network with just a few clicks.

Amazon Managed Blockchain supports two popular blockchain development frameworks, Ethereum and Hyperledger Fabric, making it easier for clients to manage both permissioned and public blockchain networks via a single managed service. By providing a variety of instance types that include different combinations of memory and CPU, Amazon’s BaaS offering gives you the flexibility to select the appropriate resources for your workload.

Features of Amazon Managed Blockchain:

1. Fully Managed.
2. Supports Hyperledger Fabric and Ethereum.
3. AWS Key Management Service to secure Hyperledger Fabric’s CA (Certificate Authority).
4. Uses Amazon QLDB technology to manage augmented ordering service.

R3

ChainStack, a blockchain platform as a service, released its managed R3 corda service that gives enterprises access to the one-click deployment of cloud-based Corda nodes.

Managed R3 corda platform reduces the deployment time of blockchain nodes to a few minutes allows enterprises, R3 partners and governments to host the Corda network in just three clicks.

Built on the latest release of Corda 4.1, developers can develop their private networks for testing environments and install CorDapps on the private network nodes. It leads to reduced efforts and resources and offers scalability over a shorter period. Developers no longer need to focus on the maintenance of networks.

Features of R3 Corda Service:

1. Easy cloud-based deployment and quick setup of nodes with Docker.
2. Built-in blockchain application firewall to provide additional security.
3. R3’s Interoperability feature allows developers to operate with more than one application at a time.

SAP Cloud Platform Blockchain

Also called as “Leonardo,” SAP Blockchain-as-a-service resides in the SAP Cloud Service and does not require any on-premise software or hardware. By eliminating the need for a huge upfront capital investment, SAP’s Leonardo allows using open standards to develop private and consortium blockchain networks.

SAP’s Blockchain-as-a-service platform performs as a blockchain cloud service, machine learning service and provides support to IoT within a single ecosystem.

Features of SAP’s Leonardo:

1. Cloud Deployment.
2. Monitoring of blockchain data in real-time.
3. SAP Cloud Platform for Blockchain allows to prototype, build and test smart contracts and blockchain.

Since you will come across many blockchain-as-a-service platforms in the market, you need to consider some factors based on which you can select the ideal BaaS provider for your blockchain use case.

Following are some of the factors that can help you choose the right BaaS Platform:

• Smart Contracts Integration
  You would require a smart contract mechanism to integrate business logic into your blockchain solution. Smart contracts don’t only include the rules like typical contracts, but also enforce penalties in case any party breaks the rules.
  Since the BaaS platforms are immutable, it makes the testing and deployment of smart contracts quite complicated for developers. It is crucial to consider that the blockchain as a service company provides you the smart contract integration with the deployment.
• IAM(Identity Access Management) Platforms
  A permissioned network allows users to access specific information or layers. Integrating an identity management platform will make the blockchain network tightly secure and you will be able to grant permission to individuals.
  For example, not every employee in the office can have access to internal confidential information. Identity Access Management (IAM) is a framework that facilitates the management of digital identities for enterprises.
  To manage the identities, you can use a single sign-in method or even multiple authentication ways to give users access to the information. IAM integration ensures that you only share what’s required, not everything else. Select a BaaS platform that offers IAM framework integration.
• Different Runtimes and Frameworks
  What if you want to switch to another blockchain platform while building a blockchain app on BaaS architecture? When it comes to blockchain frameworks, you might not find many blockchain-as-a-service providers that offer versatility.
  Some BaaS providers only support one kind of enterprise blockchain deployment. Ensure to choose a BaaS that supports a diverse range of runtime and frameworks. It will help bring flexibility to your enterprise requirements.
• Identity-based Consensus Mechanisms
  You must have heard about the typical consensus mechanisms such as Proof of Stake or Proof of Work.
  However, Proof of Stake and Proof of Work don’t offer enough scalability that the enterprise-grade solution needs. Therefore, select the blockchain-as-a-service providers working on a consensus mechanism that does not depend on the computation.
  Identity-centric consensus models can scale up the network and allow the enterprises to integrate the technology quickly. So, you can also prefer selecting a BaaS platform with an identity-based consensus algorithm that enables enterprises to operate with authorized identities.

The above factors will help you decide and select the right blockchain as a service solution according to your business requirements.

Cost Analysis: BaaS Offering vs Self-Hosted Blockchain

When it comes to analyzing the cost of Self-Hosted Blockchain App, the total cost of ownership is expected to be high because of start-up costs (infrastructure, personnel, software, licensing, hardware, consulting and more), retirement costs (decommissioning of server racks) and operational costs (monitoring, cost per transactions, bandwidth expenses).

Moreover, the cost of building and deploying a single smart contract under the former model can cost up to a hundred thousand dollars.

A blockchain application hosted in the cloud as a part of the BaaS offering can be bought for around USD 0.29 per allocated CPU hour. It means you will have to pay as you go, i.e., you need to pay for only the units of services used.

The actual costs in the BaaS model depend on factors like transaction rate, the maximum number of concurrent transactions, the payload size on transactions and so on.

For example, Amazon AWS Managed Blockchain Service’s Pricing depends on factors like peer nodes, data written to the network, network membership, data transfer and peer node storage.

Conclusion

Blockchain as a service is a promising offering that helps enterprises become future-ready with scalable solutions built on the blockchain technology.

Consult LeewayHertz to make your business processes more efficient, robust and secure with Blockchain as a Service Frameworks.