BaaS: Something About Blockchain… Or Some Pro Shops?

By Nick Roquefort-Villeneuve, Global Marketing Director — Amalto Technologies

Saas, PaaS, DBaaS, NaaS… When they’ll run out of consonants… Actually, “Housing as a Service” kind of already had the audacity.

Anyway, let’s take a look at Blockchain as a Service, or BaaS. Just a suggestion, if you meet folks who are in the Backend as a Service business, just let them believe that BaaS is theirs. They can be quite intolerant at times. But among us, BaaS is and shall remain Blockchain as a Service.

The idea behind writing this blog is to check the pros and cons of using a BaaS instead of implementing one’s own Blockchain network. This is a pertinent topic, given the fact that building a Blockchain network infrastructure requires significant dedicated skills which are difficult to find as well as important financial resources. So, there are businesses out there who’d rather develop their Blockchain-based application and then rely on a Blockchain as a Service provider like Amazon Web Services, IBM, Microsoft, and Oracle, among others. But does the latter take away the intrinsic benefits that a Blockchain network offers? We shall see…

BaaS: Advantages

1. Convenience: BaaS platforms provide developers of Blockchain-based applications with a managed Blockchain service. What does it mean? Basically, the developer does not have to worry about whatever is required to maintain and operate the Blockchain network on top of which the decentralized application runs. Moreover, such platforms often times offer multiple options or tools the developer can use to customize the service he or she intends to provide to his or her users. Furthermore, on the developer’s side, there is no worries to have about having to set up and operating the Blockchain. That’s the platform provider’s responsibility. Thus, the developer can concentrate on the conception and distribution of the decentralized application and its interaction with the Blockchain. Thanks to a BaaS, a business also has the possibility to run its own Blockchain network and still have the network’s nodes hosted by AWS, Microsoft Azure, IBM Hyperledger, OVH, among other services. In other words, those providers do not operate the Blockchain per say. They provide the hardware.
2. Financially Sound: To build a Blockchain network is not for everybody. It indeed necessitates a large capital investment up front. Thanks to a BaaS, a developer or a business solely pays à la carte, or for what they need. About data storage, just like with cloud service providers, BaaS providers charge their clients as they go. And they can increase their usage any time it is required. Even the largest corporations choose to pay a service provider instead of engaging in massive infrastructure expenses. Take Netflix that uses Amazon Web Services for hosting its infrastructure. This strategic choice allows the content streaming company to focus on its content and not the technology used to store it.
3. Flexibility: To avoid worrying about not being sufficiently acquainted to Blockchain as a technology is a definite plus for businesses that want to focus on testing proofs of concept, while saving significant amount of money. BaaS providers have already made the significant investment in building a Blockchain system, so developers do not have to. Therefore, the developer can simply purchase the service, which is managed by the provider, and focus on building the application. If the development of the decentralized application becomes a total fiasco, the financial risk is minimized.

BaaS: The One Major Disadvantage

Centralized (After All…): A BaaS defeats the true intrinsic purpose of what a Blockchain network is supposed to embody: a decentralized system. What does it mean? A Blockchain is decentralized, since each node that composes the network is managed by a distinct authority. Another feature Blockchain offers is a consensus algorithm that needs to be solved, so all stakeholders agree on what transaction can be added to a block. In the configuration a BaaS network offers, it’s the software provider who hosts all the nodes and therefore indirectly controls the consensus mechanism. Said differently, in a BaaS system you as a client have to entirely trust the provider, since that’s the provider who manages all the nodes and performs the consensus for you. The fact that one entity controls all the nodes takes away the sense of trust Blockchain technology brings: Each stakeholder has authority over his own node, as soon as a data or the elements of a transaction have been validated and written in the Blockchain (inside a block in each node), the same information is available to all stakeholders, which in the end creates trust among participants (businesses). Implicitly, a BaaS enforces the fact that data and transactions on that Blockchain cannot be trusted.

Consensus: BaaS or Bust?

BaaS looks like Blockchain, it has a mining consensus mechanism like Blockchain, but it is not Blockchain… That’s why it’s much cheaper than implementing the real thing.

A BaaS solution is an inexpensive way to test out a Blockchain solution, if you do not have the resources to build one on your own. The idea is that if a BaaS ends up working for you, then it might be a good idea to invest in a real Blockchain network, where each stakeholder has control over his own nodes and where the method of consensus is agreed among participants instead of being imposed by an external system.