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Blockchain's emergence has brought forward a transformative idea in a new frontier of digitalization, transparency, decentralization, and security. Although the potential of blockchain is well established, many organizations do not move forward with blockchain development because of cost, complexity, and their lack of expertise.
Fortunately, Blockchain as a Service is helping to change this; it is a cloud-based model that is helping create an equal playing field in order to use blockchain technology by allowing businesses to build and deploy blockchain apps without having to create a full-distributed application stack.
Blockchain as a Service is a cloud-based service model that allows organizations to use a blockchain framework without needing to build it themselves. Blockchain as a Service provides developers with the tools and services needed (think hosting, maintenance, development environment, smart contracts, and storage) from a third party so they can build applications.
You can think of Blockchain as a Service as you would cloud-based models of SaaS, PaaS, or IaaS. On a conceptual level, Blockchain as a Service allows enterprises to prototype blockchain ideas, deploy permissioned networks, and develop applications without having to manage any of the infrastructure in the background.
Do You Know?
The Blockchain as a Service market is also growing. According to MarketsandMarkets, the Blockchain as a Service market is expected to increase from $2.3 billion in 2023 to $25.5 billion by 2030, with a CAGR above 41%.
This has been driven by the increase in enterprise interest in decentralized applications across finance, supply chains, healthcare, and beyond.
A typical architecture for a Blockchain as a Service consists of multiple modular services and APIs deployed over the cloud. Here's how it works in sequential order:
The user chooses a blockchain protocol (such as Ethereum, Hyperledger Fabric, Corda, or Tezos) based on the use case, transaction speed, scalability, and security requirements.
The Blockchain as a Service provider will configure the blockchain nodes, networks, consensus mechanisms, and data storage layers. Users will not have to worry about managing the infrastructure.
Developers use REST APIs and SDKs to access the platform. This enables users to interact with the on-chain elements and existing enterprise applications easily.
Users may write, deploy, and test smart contracts using an inbuilt IDE or existing tools such as Remix or Truffle.
The Blockchain as a Service provider manages the health of the system and both the uptime of the nodes and the infrastructure status. The provider manages the security updates and periodically scales the Blockchain as a Service platform as necessary.
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Some Blockchain as a Service platforms provide a blockchain explorer, governance dashboards, and plug-ins for auditing, token issuance, and cross-chain interoperability.
It can be expensive to set up and manage blockchain nodes, understand cryptography and cryptographic keys, and maintain them 24/7. You can transfer these costs to a Blockchain as a Service vendor, who will take on the responsibility on your behalf.
Example:
IBM's Blockchain as a Service is reported to save mid-sized companies 40% on yearly costs related to blockchain deployment.
Businesses can build a fully-functioning network in weeks, rather than in months, leveraging existing pre-configured networks and the ability to reference the previous smart contract library.
Your developers and your them can focus on our dApp builds, UX Integration, and solving customer problems, not whether the system works right and whether the servers are available 24/7.
Most Blockchain as a Service platforms provide customizable consensus mechanisms, governance models, smart contract templates, and modules for integrations.
Blockchain as a Service vendors implement a range of security measures, including firewalls, data encryption, access controls, identity management, and adhere to compliance certifications such as ISO and GDPR.
APIs make it easy to integrate with all the critical business applications for anything - CRMs, ERPs, analytics software, payment gateways, and many more.
Blockchain as a Service is being adopted by many industries, allowing organizations to implement blockchain technology without building and hosting their own blockchain solutions. Below is a summary of how different industries are utilizing Blockchain as a Service to foster innovation, efficiency, and transparency.
In the supply chain and logistics industry, Blockchain as a Service adds value by improving traceability, transparency, and efficiency. Organizations can track their goods throughout the product lifecycle from the manufacturer to the end consumer.
Real-time tracking helps reduce fraud, verify authenticity, and improve overall coordination in the supply chain. By using smart contracts, companies can automate shipping notifications, payments, and inventory change notices. Shipping delays, human error, and unintended consequences can be mitigated with Blockchain as a Service.
For example, today, major retailers and suppliers of food products are using blockchain to ensure food safety and provenance, which has decreased product recall time for contaminated foods from days to seconds.
The healthcare industry is becoming an early adopter of Blockchain as a Service to protect data, improve the privacy of patients, and allow for patients' health data sharing between hospitals, laboratories, and insurers. Blockchain securely stores medical records that are tamperproof and accessible to authorized parties.
Similarly, Blockchain as a Service allows for secure sharing and efficiency in health insurance claim processing and pharmaceutical supply management. By reducing costs associated with administrative overhead and improved transparency, healthcare professionals can spend more time providing care, rather than pushing paper.
Blockchain as a Service is revolutionizing financial services, providing faster transactions, improved compliance, and innovative financial products. Blockchain enhances trust and reduces friction in financial processes, such as cross-border payments and smart contracts for loan agreements. Banks are processing faster by tokenizing assets through Blockchain as a Service.
Financial institutions can also use Blockchain as a Service to improve trade settlement times and automate regulatory reporting. This leads to cost savings and opens the provision of financial services to underserved populations, allowing for decentralized finance (DeFi) applications with inherent compliance and auditability.
As governments work to modernize outdated systems and create transparency in public services, Blockchain as a Service has become increasingly popular with government authorities. Examples of blockchain-based government initiatives include secure and convenient digital identities, transparent land registries, and tamperproof voting systems.
Government authorities can use Blockchain as a Service to trial a new blockchain project without needing to fully invest in a new system. Countries like Estonia and Dubai are using blockchain to provide secure and efficient public services and address issues of fraud and inefficiency in public services, including the goal of becoming paperless through a national digital transformation.
Blockchain as a Service is solving perennial issues regarding intellectual property and royalty payments in the media and entertainment industry. Artists and content creators can utilize blockchain to register ownership of their works, ensuring they get paid fairly each time someone uses or shares their work. Smart contracts can also automatically disburse royalties to all parties involved, which substantially reduces the need for third-party intermediaries.
This improvement not only means artists receive more for their work, it provides far greater transparency in revenue sharing agreements.
Blockchain as a Service is improving the real estate industry by digitizing property transactions, resulting in less paperwork and improved trust between buyers, sellers, and agents. Through blockchain, property titles and transaction history are being recorded securely, and proven to be legitimate much more easily.
Likewise, the tokenization of real estate assets is enabling fractional ownership and smaller investors to participate in previously untouchable asset classes. Smart contracts also allow for the improved automation of agreements to reduce closing times and the need for intermediaries.
Retailers can use Blockchain as a Service to improve product authenticity, supply-chain transparency, and consumer trust. By providing end-to-end visibility of goods, blockchain ensures consumers receive what they actually paid for.
Retailers are using blockchain to combat counterfeit products, tokenize loyalty programs, as well as make refunds or returns simpler. Retailers that are using blockchain have a better chance of meeting growing consumer demand for ethical sourcing and transparency of products.
Blockchain as a Service is streamlining business processes in the travel space with enhanced identity verification, ticketing, and loyalty processes. Travel agencies and their service providers can store traveler identities safely on the blockchain, verify them easily, automate the booking process, and prevent overbooking.
Blockchain also enables decentralized travel platforms that cut out the travel agency, connecting consumers directly with service providers, cutting out booking fees, and increasing transparency. These loyalty programs offer more security to customers, interoperability across all travel service providers, and an overall better customer experience.
Many major technology firms dominate the Blockchain as a Service landscape, offering different blockchain platforms that can suit the needs of various enterprise settings. Each Blockchain as a Service platform has its strengths, whether it is developer-centric tooling,built-inn cloud capabilities, industry-specific needs, or geographic coverage. Below is a list of the Blockchain as a Service providers that are changing how businesses adopt a blockchain strategy.
IBM Blockchain is based on the Hyperledger Fabric framework and is one of the most mature and enterprise-ready Blockchain as a Service platforms on the market. The Blockchain as a Service platform for supply chain management and healthcare, where secure sharing of data, along with audit trails, is critical.
IBM's modular governance tools enable enterprises to maintain control over access, permissions, and consensus mechanisms at a granular level. For example, IBM Food Trust (a blockchain built in partnership with large food retailers like Walmart) utilizes IBM Blockchain to trace food products at every step of the supply chain, allowing users to observe which products were taken from stock, improving the safety of the food. Customizable consensus mechanisms and integration to other IBM Cloud services also increase adoption potential.
Microsoft Azure Blockchain is a developer-oriented Blockchain as a Service platform on which a wide variety of enterprise developers build decentralized applications (dapps) and consortium blockchain networks using Ethereum, Quorum, Corda, and other blockchain protocols.
Its flexible architecture, thoroughly integrated into the Microsoft ecosystem, allows developers to easily share connections and applications with Azure Active Directory, Logic Apps, and DevOps pipelines.
For businesses that want to harness the capabilities of Blockchain as a Service solutions, Microsoft Azure Blockchain is one of the quickest ways to deploy a consortium blockchain network and build dApps with familiar tools.
It is also supplemented with a blockchain development kit that makes it easy to create smart contracts and integrate blockchain data with existing systems. As an enterprise cloud provider, Microsoft Azure gives companies the benefit of global deployment, high uptime, security, and redundant infrastructure provisioning.
Amazon Web Services (AWS) provides Amazon Managed Blockchain that also supports Hyperledger Fabric and Ethereum through a fully managed, scalable Blockchain as a Service offering. With Managed Blockchain from AWS, organizations can create and scale blockchain networks with highly available resources that do not require complicated configuration and/or manual provisioning of unavailable nodes.
Managed Blockchain is a good option for enterprise-level clients that require low-latency blockchain transactions with high performance and scalability for blockchain technologies. For example, Managed Blockchain has been used for financial services and is complementary to the JPMorgan Chase Quorum blockchain that's built and maintained on AWS.
Amazon's management is entirely focused on maintaining high-performance, scalable, and low-latency distributed networks on-premises and scaling to suit the enterprise and financial services markets.
Oracle Blockchain Cloud Service is designed to take enterprise resource planning (ERP) and back-office automation into account. It enforces interoperability stacks and API integrations and includes business process automation, making it an ecosystem of offerings for companies already leveraging Oracle’s range of cloud apps.
What is attractive about Oracle is its ability to integrate blockchain into traditional business systems. Examples include tracking product provenance, ensuring the protection of logistics data, and the automated execution of contracts.
Its Blockchain as a Service solution includes identity management, monitoring tools, and standardized templates for smart contracts, giving companies a head start in their deployment and reducing the time taken to market.
Alibaba Cloud’s Blockchain as a Service platform is growing rapidly in Asian markets. Built to deploy fast with a user-friendly one-click system, the Blockchain as a Service supports frameworks such as AntChain, Hyperledger Fabric, and Quorum.
The key offering is aimed at companies seeking to expand in the Asia-Pacific region and is used extensively by logistics players, financial institutions, and government agencies. Good things to also note are common use cases for the Blockchain as a Service, including AntChain by Ant Group, including cross-border trade, digital invoice management, and supply chain financing.
The platform is built as scalable, secure, and compliant with local and regional data regulations/cross-border trade laws, such as China's Cybersecurity Law and PIPL.
While Blockchain as a Service mitigates many of the potential barriers to blockchain adoption, organizations will still have to navigate technical, regulatory, and operational obstacles to fully take advantage of Blockchain as a Service.
The major obstacle to Blockchain as a Service adoption will likely be vendor lock-in. Different providers use different blockchain protocols, APIs, and governance frameworks, which can make changing from one vendor to another extremely problematic.
For example, data formats may not play well together, and the consensus mechanism that supports the relationship among participants could differ (even if it is the same type of consensus mechanism), as could the programming language required to write the smart contracts.
In addition, service-level agreements (SLA) and encryption protocols may differ, as will deployment models. Migrating data and operations from one Blockchain as a Service provider to another can often be a significant undertaking that could involve extensive change management, development, and sometimes legal changes. Therefore, it is crucial to conduct vendor analysis and long-term strategic development before committing to a Blockchain as a Service ecosystem.
While Blockchain as a Service providers take on the infrastructure, the entity using the Blockchain as a Service will still be required to deal with regulatory compliance. Whether it's GDPR in Europe, HIPAA in the U.S., or PCI-DSS governing payment data, organizations must ensure their blockchain implementation meets local and international laws.
While the immutability of blockchain can increase trust and auditability, it may create issues with certain regulatory requirements, such as the “right to be forgotten.” There may also be jurisdictional requirements that dictate where the customer data and blockchain nodes can be located. Organizations need to work closely with compliance officers and legal teams to ensure that their Blockchain as a Service deployment is compliant.
Integrating Blockchain as a Service with legacy IT systems - whether traditional applications running on COBOL, mainframes, or traditional monolithic ERP systems - presents a generally known technical challenge. Most enterprise legacy systems do not have APIs or standardized interfaces that could aid with integration from blockchain systems, which typically leads to longer development times and higher costs for integration efforts.
To fill in the gaps, organizations may have to write new middleware or use a data adapter. Although some Blockchain as a Service providers provide integration toolkits, organizations will still have to work on the parts that address data consistency, network synchronization, and access control between the older and newer systems. Organizations should evaluate the state of their infrastructures as they relate to existing systems in place before commencing with a Blockchain as a Service project.
A new Blockchain as a Service platform will empower rich interoperability across chains. This includes value transfer and communications between Ethereum, Polkadot, Cosmos, and more.
AI may be utilized to usher in smart contract exploitation, fraud detection, and real-time analytics. IoT data can be immutable and validated.
Blockchain as a Service platform will gravitate toward visual builds for smart contracts and decentralized apps, enabling civil developers to launch without coding capabilities.
Sustainability is a priority for Blockchain as a Service solutions that include carbon accountability and proof of stake (PoS) consensus models rather than proof of work (PoW).
Blockchain as a Service is a revolutionary business model providing organizations, improvement teams, and enterprise organizations a chance to obtain the power of blockchain without the need to wade into the technical depths of it.
This model has more acceptability from the large tech companies, burgeoning applications in the real world, and future market forecast expectations of tremendous growth. Blockchain as a Service may be the beginning of mainstream blockchain adoption.
For enterprises looking to scale securely, transparently, and efficiently, Blockchain as a Service could offer the advantage you've been seeking.
Start your journey with Blockchain as a Service today and transform your operations with enhanced security, transparency, and scalability. Whether you're a startup or an enterprise, BaaS lets you innovate faster, without reinventing the wheel. Get in touch with us today!
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