Blockchain-as-a-Service (BaaS): What to know before taking a stand?

Image source: 123rf.com

A latest survey conducted by Gartner disclosed that currently, the blockchain deployments are meagre. By virtue of their research, they determined that only 1% of organizations had adopted blockchain, 8% were in effective experimentation or short-term planning while 77% had no plans to invest into this greatly-hyped technology.

It’s been debated that all the marketing puffery created around blockchain has resulted in incertitude among IT leaders about what’s real and what’s not. Organizations want to develop software applications and verify on a blockchain platform. But it’s easy said than done; setting up and maintaining a blockchain platform isn’t exactly simple for most organizations.

Setting up a blockchain platform needs expert and experienced people who are qualified and have knowledge of security, law, process, commercial architecture, value exchange and decentralized governance. Hence, organizations are shifting to Blockchain-as-a-Service (BaaS) and we are seeing a rise in as-a-service offerings for blockchain technology.

Image source: usindustrynews.com

Blockchain-as-a-service (BaaS) is establishing a noticeable market presence and promising organizations a channel to utilize this technology. So, should we look at what exactly is BaaS?

The technical definition of BaaS:

Blockchain-as-a-Service (BaaS) is a service offering that authorizes customers to avail cloud-based blockchain solutions to create, host and use their blockchain apps, functions and smart contracts. The required tasks and exercise to keep the cloud-based service operational and agile are carried out by the service provider. It works like and is based on the concept of Software-as-a-Service (SaaS) model.

The organizations will not have any authority of the entire blockchain and will have access only to their own nodes. The basic idea is to bring organizations together in a consortium to interoperate without sharing their business intelligence. In addition to tech giants, a lot of startups are also offering Blockchain-as-a-Service offering to aid organizations in implementing blockchain.

But before you make your mind for using Blockchain-as-a-Service it is better to weigh both the pros and cons. Let’s look at the pros first.

The hidden benefits of Blockchain-as-a-Service:

• Transparency: Organizations can, not only store and share information on the BaaS; but it also allows great deal of transparency and backtracking of transactions.
• Time and cost: Using BaaS will aid organizations to save time and cost spent on building their own blockchain platform; rather it will give a reliable solution to use this technology. BaaS will also save the cost and time that organizations spend in hiring the required experts.
• Personalized template: For organizations, who want to avoid designing from scratch, the BaaS provider can provide templates that can be easily integrated with existing systems and apps. Oracle’s Blockchain Cloud Service allows organizations to design their networks on its platforms.
• Concentration on Features: Having the core ready, organizations can focus on the features of their apps. Once the BaaS infrastructure is set, the service provider will maintain it along with bandwidth management, hosting, security and resource allocation.
• Testing: The most exciting feature of blockchain is its capability to allow organizations to test new technology excluding the risk of an unsuccessful deployment back home. Organizations can test their apps within the limits of blockchain, which originates a ‘proof-of-concept’ or verifies the feasibility of the tested feature.

Reading these pros may be you are making up your mind to use BaaS but hang on a minute; let’s weigh the cons too.

The shortcomings of Blockchain-As-A-Service:

• The idea is still fresh: Organizations developing the base blockchain platform may or may not be using verified algorithms. Furthermore, there’s no way to verify the validity of the followed approach until apps or smart contracts are deployed and integrated with the platform.
• Need for skilled support: Dedicated and qualified support is very important for this kind of technology implementation because one soft spot could cost a lot.
• Matter of compliance: As blockchain confides on scattering information across a worldwide network, international laws and regulations would affect the information shared across countries. Like, although Amazon has centralized its AWS offering, the decentralized nature of blockchain would lead to compliance problems related to data residency across countries.
• Scalability problems: Decentralization can create a situation where if suddenly usage increases in one app, the processes of another app could be hampered. Organizations should understand the implications and choose the best way to work with their requirements and abilities.
• Magnified electricity use: Blockchain infrastructure needs lot of energy. Being one such biggest network on the globe, it can use as much electricity as a country like Nigeria. Though experts are working on reducing this electricity consumption, it can have tremendous consequences both environmentally and economically.

Take Away:

BaaS could be an important accelerator that can drive to a much greater and profound infiltration of blockchain technology across different industry verticals and businesses. Rather than, developing your own blockchain platform, organizations, small or big, can simply “contract out” this complex work and focus on their core operations.

By analyzing these pros and cons in accordance with your business needs, you can decide whether to go for BaaS or not.

Please feel free to add your opinion in comments. I would be glad if you can add more to the above mentioned information.