Blockchain-as-a-Service (BaaS) allows anyone, from enthusiastic startups and large enterprise companies, to create blockchain applications on the cloud. They do so by enabling the creation of blockchain-powered products while eliminating much of the technical complexity. Much of the creation, implementation, and maintenance of an operational blockchain infrastructure no longer has to be built from scratch. With over 90% of banks investing in blockchain, along with many other companies from different industries, the success of Blockchain-as-a-Service providers seems quite likely. BaaS services are especially useful for startups with limited funds and access to talent, which act as barriers to entry to blockchain innovation.
The SaaS (Software-as-a-Service) business model has been adopted by some of the most successful companies of today. Companies like Wordpress and Salesforce have contributed significantly to the proliferation of the internet by creating useful tools that expanded the capabilities of individuals and businesses while significantly lowering costs.
For example, websites used to be notoriously expensive to build and maintain. Yet Wordpress allowed anyone to create a fully functional website with zero coding experience through the use of its plugins and customizable themes.
Blockchain-as-a-Service companies act very similarly. They serve as third parties that create, set up, and manage the blockchain architecture for their clients. These clients can then focus more on improving the functionality and utility of whatever blockchain use case they are working on. For a fee to a BaaS provider, companies would get services such as:
Blockchain-as-a-Service is positioning itself to be a catalyst for widespread adoption that large corporations like Amazon and Microsoft have been exploring for some time. Yet unlike most things in blockchain today, this is not some far off future idea. In fact, Microsoft’s Azure platform has been available since 2015.
Today, there are millions of active Ethereum addresses, while the number of Ethereum blockchain nodes supporting the network is far less. Therefore, most people are not running their own node. Similarly, nodes associated with Blockchain-as-a-Service operations run nodes for businesses. Yet we must also take into account future IoT (Internet of Things) solutions. These devices cannot connect to nodes directly if they are to be feasible on a mass scale. Such products will require Blockchain-as-a-Service solutions to communicate with nodes on their behalf as to not overload the network. Therefore, Blockchain-as-a-Service solutions may be the key to the success and adoption of many future blockchain innovations.
There are two types of limitations of the Blockchain-as-a-Service business model.
There are currently many different Blockchain-as-a-Service providers with more entering the market every year. Yet there are already very credible companies that have started offering these services to their clients. These include:
Microsoft launched its Azure service back in 2015 in partnership with Consensys, becoming one of the first Blockchain-as-a-Service providers in the world. They followed this up with their Enterprise Smart Contracts offering, providing a myriad of services for enterprise clients.
This company utilizes the Bitcoin Lightning Network to offer a payment processing infrastructure solution that other developers can build payment products and applications on.
Their Rubix Core offering allows clients to build a customized private network on the Ethereum blockchain. They do so in a way that combines ease, usability, and (most importantly) compliance features that enterprises need for their infrastructures.
Amazon Web Services (AWS) is what most internet companies have used for server services to host their applications. Lately, the company has integrated blockchain solutions to improve various business processes for some of their largest clients through the Hyperledger Fabric framework and Ethereum.
The Dragonchain project’s primary focus is the security of business data and other vital digital assets. They do so by implementing a cloud-based infrastructure that does not require servers to run. In doing so, they can improve security, privacy, and interoperability between various blockchains that share important data.
Ultimately, the success of Blockchain-as-a-Service (BaaS) companies will heavily depend on the technical advancements in the space. As scalability and other issues are solved, implementing a blockchain solution for a business may be no harder than creating a website. While certain companies may be better off with simple DLT (distributed ledger) solutions, those that need the blockchain will be able to implement solutions faster and far more efficiently.