What is Blockchain-as-a-Service and How Does it Work?
Blockchain-as-a-service (BaaS) has created a safe and decentralized transaction history in cryptocurrency systems. Research shows that global BaaS size will grow to $11,519 million by 2026. This is proof that Blockchain-as-a-service is shaping startups and businesses that depend so much on large data volumes.
BaaS works the same way as Software as a Service (SaaS). It runs at the backend of a blockchain app just like web hosting. Read on to understand the concept and its use cases.
What is Blockchain?
Blockchain is a form of digital ledger that contains the record of all cryptocurrency transactions in a decentralized system. Over the years, Blockchain has served the purpose of tracking the movement of goods and money and protecting the intellectual property of individuals. This technology has the power to control business and the world. The record is unalterable such that the system can notice a little edit or change in details.
In 2008, Satoshi Nakamoto created blockchain to serve the purpose of keeping Bitcoin cryptocurrency transactions. Stuart Haber, Scott Stornetta, and Dave Bayer were the first set of people to work on the platform before Satoshi completed it. By implementing this project, Bitcoin became the first digital currency to solve the double-spending problem without a trusted authority or central server.
What is Blockchain-as-a-Service?
Blockchain-as-a-Service is a third-party cloud-based solution. It requires low technology and is cost-effective for companies looking to implement blockchain in their products and services. The third party handles the backend which makes it easier for individuals and companies to adopt the blockchain.
Giant companies such as IBM, SalesForce, Microsoft, Alibaba, and Oracle are now Blockchain-as-a-Service providers. Thanks to them, companies can use blockchain technologies without investing in the backend infrastructure which was a major challenge of using Blockchain technology years back. BaaS allows these companies to build, host, and operate their blockchain apps. They can also perform other functions on the blockchain.
Use Cases of the Blockchain-as-a-Service Model
Today, with the development of the blockchain ecosystem, numerous businesses adopt BaaS for different functions. Some of the use cases of the model include:
Personal Identity Security
BaaS serves as an excellent method of securing clients, customers, or patients’ sensitive data. This is because the blockchain system does not support editing, tampering, or deleting data on the platform. Only authorized persons have access to these databases and they can only view without editing.
Multinationals such as IBM, Walmart, and Microsoft have developed various BaaS solutions for personal identity security and verification services.
Logistics
With BaaS solutions, the logistics industry makes supply chain processes simpler and more efficient. For instance, blockchain-based smart contracts automate shipment tracking and payments. It helps reduce costs, improve transparency, and track the origin of goods to be sure they are not stolen or counterfeit. Companies like Maersk, DHL, and FedEx use this system for supply chain management, to improve transparency and reduce paperwork.
Smart Contract
Smart contracts are digital contracts stored on the blockchain platform. When you meet a predetermined term or condition of the contract, it executes itself automatically. The automation can be in the workflow to trigger the next action plan when they meet certain terms and conditions.
BaaS provides the ideal platform for smart contracts. It automates agreements so everyone knows the outcome right away. There is also no need to involve a third party and it reduces time loss. Deloitte and Accenture developed blockchain platforms that offer smart contracts. They provide smart contracts in supply chain management, finance, and digital entities.
Governance
The backbone of any good government is transparency, accountability, and fairness. This is where data management plays a vital role. Government officials leverage on blockchain data management structure. The platform uses a distributed ledger backed up by blockchain cryptography to ensure maximum protection of data.
They also apply BaaS in the aspect of the National Identification Number (NIN) registration process, voting, National Passport registration, Central Banking, and many other processes.
Frequently Asked Questions (FAQs)
What are some of the reasons to consider implementing a BaaS solution?
Blockchain-as-a-service allows users to experience a secure, transparent, and efficient way of sharing data across multiple parties. It also enhances security and traceability of sensitive data. They include financial transactions and patients’ records.
What are the implications and challenges of BaaS?
Very few companies adopt this technology. There are also limited skilled professionals in the field, a lack of trust among users, limited financial resources, and blockchain companies working separately.
Which sectors can benefit from BaaS?
BaaS is a versatile platform that various industries can benefit from. These sectors include banking and finance, healthcare, supply chain management, government, and entertainment among others.
Wrapping Up
As a company that wants to experience financial growth, BaaS is a great way to get started. It allows you to experiment with technology without having to invest in the framework itself. It provides a way for you to outsource the management of your blockchain apps. Several tech companies such as Microsoft, Amazon, and R3 are now BaaS providers. They helped in taking the adoption of Blockchain platform-as-a-service for business further.
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