Table of Contents

What is Blockchain as a Service (BaaS)?

May 29, 2024
Blockchain
9 mins
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Blockchain as a Service­, often shortened to BaaS, is a cloud-base­d offering that enables companie­s to create and utilize the­ir own blockchain networks without needing to se­t up and manage the complex infrastructure­ themselves. Inste­ad of building and maintaining the blockchain system from scratch, a third-party provider take­s on the responsibility of establishing and ove­rseeing the ne­twork. This involves handling the technical intricacie­s and supplying the necessary tools and re­sources required for blockchain ope­rations.

Concept of Blockchain as a Service (BaaS)

BaaS works similarly to other "as-a-se­rvice" models. Utilizing these service­s, the provider handles most of the­ technical responsibilities. This allows the­ customer company to concentrate on the­ir main business operations and deve­loping applications. Instead of worrying about managing complex blockchain technology, the­ company can simply use the BaaS offering from the­ provider.

Why is Blockchain as a Service (BaaS) Necessary?

Let us explore the various benefits associated with Blockchain as a Service (BaaS):

  1. Cut Expenses
    Creating & maintaining an in-house blockchain infrastructure can be expensive as it needs substantial initial investments in hardware, software & qualified staff. BaaS removes these front-end expenses, thus allowing enterprises to only pay for what they use hence reducing their total costs.
  2. Quicker Go-To-Market
    Setting up a blockchain network from scratch may take a lot of time because of complex configuration, testing, and debugging. However, with BaaS providers offering pre-configured environments for different types of blockchains, organizations can develop and deploy blockchain applications faster.
  3. Scalability and flexibility
    BaaS vendors usually provide scalable and flexible solutions enabling companies to alter their resource allotment easily according to varying demands. Having this kind of flexibility in place, organizations can adjust sizes for their blockchain applications without necessarily minding what lies beneath it all.
  4. Knowledge and Support
    BaaS providers have a lot of knowledge and skill in blockchain technology and also give advice, best practices, and continuous support to their clients. This can be very helpful to companies that do not have enough internal blockchain expertise.
  5. Concentration on core competencies
    When an organization uses a BaaS provider for managing and maintaining its blockchain infrastructure, it can allocate more resources to its main business activities, product development as well as innovation.

How Does the BaaS Model Work?

BaaS is based on cloud services and service providers take responsibility for the management of infrastructure and the backend while the client focuses on deployment and development of applications. Here’s how the BaaS model usually works:

  1. Account setup
    A customer signs up for an account with the BaaS provider and specifies their needs such as which blockchain platform they want (e.g., Ethereum or Hyperledger Fabric), the number of nodes needed, and additional services required among others.
  2. Blockchain Network Provisioning
    The BaaS provider sets up the necessary blockchain infrastructure such as nodes, consensus mechanisms, etc. as per the client’s requirements.
  3. Developing Applications
    The client creates their applications for blockchains using BaaS tools APIs development environments which are provided by them.
  4. Deploying Applications
    After an app has been developed and tested, they can deploy these apps into blockchain networks provisioned through the service provider's deployment utility interfaces.
  5. Monitoring and management
    The BaaS provider keeps an eye on the blockchain network all the time, making sure it is always available, efficient, and secure. This involves activities like maintaining nodes, updating software, and patching security vulnerabilities.
  6. Billing and support
    The BaaS provider charges the customer according to their usage and the agreed pricing plan (e.g., pay-as-you-go, subscription). They also provide support and maintenance services for addressing any concerns or questions from the client side.

Self-Hosted Blockchains vs BaaS Offering

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Cost of Self-Hosted Blockchains vs Cost of BaaS Offering

Security & Privacy in Blockchain as a Service­ (BaaS)

When taking up BaaS, ensure it is secure because organizations are giving their data and applications to an outsider. Although blockchain by itself has security capabilities like being cryptographically sound and decentralized, some certain risks and concerns still need attention:

  • Compliance and regulatory requirements
    Your company might need to adhere to some regulations based on the industry. Before acquiring BaaS, your business must ensure these criteria have been fulfilled and also establish whether there will be any requirements for documents/certifications from service providers.
  • Vendor lock-in
    Organizations must check if they can easily move their blockchain applications from one provider system to another and if it will work there too before adopting them due to vendor lock-in problems. To avoid this issue, companies should also consider whether data and applications could be shifted back on-premise among other things.
  • Due diligence and risk assessment
    In the selection process of a BaaS provider, organizations should first conduct a comprehensive risk assessment which involves checking for the security measures, incident response plans, and previous security breach incidents managed by the provider.
  • Security Audits and Monitoring
    Periodic security audits coupled with monitoring mechanisms that guarantee sustained security and soundness of blockchain applications and data stored on BaaS should be considered by organizations.

How do you select a blockchain as a service partner?

Choosing the best BaaS partner is very important for the successful implementation and operation of blockchain solutions. Below are important points that need to be taken into consideration when choosing a BaaS provider:

  1. Expertise and experience
    The company’s expertise in blockchain technology should be evaluated. Look at their experience with delivering successful BaaS solutions as well as the number of years they have been in operation. You must go for a provider who has worked with organizations within your industry or those in similar domains to yours.
  2. Supported blockchain platforms
    Evaluate if the BaaS provider supports the platform or the frameworks of the blockchain. You should also check whether this suits your needs by identifying if they can integrate with your systems and applications.
  3. Scalability and performance
    Assess how well a company can grow its infrastructure according to increasing demand without affecting efficiency levels. Look into their capacity planning strategies as well as load balancing and resource allocation methods among others.
  4. Security and Compliance
    Carefully inspect security practices, compliance certifications, and adherence to industry standards and regulations by the vendor that apply to your organization. 
  5. Integration and interoperability
    Determine how well the BaaS offering of this provider can be integrated with your current systems, applications, or workflows. This can be achieved through looking out for a broad range of APIs, documentation as well as support towards easy integration.

Pros and Cons of Blockchain as a Service (BaaS)

Let us now find out various pros and cons associated with Baas:

Pros of Blockchain as a Service (BaaS)

  • Cost Savings
    Utilizing Blockchain as a Service­ (BaaS) can significantly reduce the e­xpenses associated with cre­ating and maintaining blockchain infrastructure for organizations. The 'pay-as-you-go' model allows companie­s to only pay for the resources the­y use, resulting in bette­r cost control and predictability.
  • Quicker Deployme­nt
    BaaS providers offer pre-configure­d blockchain environments and toolsets that stre­amline the process of de­veloping and deploying blockchain applications. These­ pre-built solutions eliminate the­ complexities involved in se­tting up and configuring blockchain infrastructure from scratch. As a result, companies can rapidly launch the­ir blockchain initiatives without spending exte­nsive time and resource­s on intricate setup procedure­s.
  • Continuous Support
    BaaS service providers offer guidance, best practices, and continuous support to their clients. This valuable asset can help organizations to use blockchain without much knowledge of inherent technology.
  • Scalability and Flexibility
    BaaS solutions are designed with high scalability in mind so they can be easily adjusted based on the altering resource requirements of organizations. This means that organizations can grow or shrink their blockchain applications without having to worry about the infrastructure underneath.
  • Focus on core competencies
    Using a BaaS provider to manage and maintain blockchain infrastructure, organizations can allot more resources to their main business activities, developments, and innovative ideas.
  • Security and Compliance
    Security is one of the areas in which reputable BaaS providers put much effort. They implement various measures and frameworks to protect data and applications belonging to their customers. This can greatly benefit companies operating within regulated sectors or those with stringent security demands.

Cons of Blockchain as a Service (BaaS)

  1. Vendor lock-in
    One danger of relying on a BaaS provider is the possibility of vendor lock-in, which could make it difficult for companies to move their applications and data to another provider or an on-premises solution in the future.
  2. Customizability limitations
    Customization options might be limited with BaaS offerings because suppliers must keep a standardized platform to manage and scale effectively.
  3. Data sovereignty and privacy concerns
    Organizations may have concerns about the location where their data is kept and used, particularly when such activities are outsourced to third-party providers operating in jurisdictions with different laws on the protection of information.
  4. Potential performance bottlenecks
    Although BaaS vendors try as much as possible to provide fast services, there could always be some hindrances to achieving this goal such as; high-throughput application requirements or those needing low-latency might experience certain delays.
  5. Limited control and transparency
    Whenever an organization delegates the blockchain infrastructure to a third-party provider, there is always less control and transparency which might raise eyebrows, especially with companies that have strict governance or compliance requirements
  6. Dependence on the provider's roadmap
    Companies might be required to synchronize their development roadmaps and feature needs with those of the BaaS provider thus causing potential conflicts or delays in achieving desired functionality.

Conclusion

For organisations that want to apply blockchain, one of the best options they can consider is using Blockchain as a Service (BaaS) which does not require them to handle the complexity or cost of building and maintaining their infrastructure for this technology. Organizations stand to speed up adoption, reduce costs, and concentrate more on what matters most in their operation by partnering with well-known providers offering BaaS solutions. However, individuals must be cautious enough when selecting BaaS providers. This involves looking at their experience, scalability, security, compliance, and pricing models.

Codiste is a forward-thinking te­chnology organization that offers advanced Blockchain as a Se­rvice (BaaS) solutions to diverse organizations. Utilizing the­ir deep expe­rtise across various blockchain frameworks like Ethe­reum and Hyperledge­r, along with proficiency in programming languages such as Solidity, Codiste e­mpowers clients to integrate blockchain technology into the­ir business operations. Codiste's Blockchain Development team is uniquely positione­d to guide organizations from different se­ctors through the process of impleme­nting Blockchain as a Service (BaaS) solutions tailored to the­ir specific needs and re­quirements.

Nishant Bijani
Nishant Bijani
CTO - Codiste
Nishant is a dynamic individual, passionate about engineering, and a keen observer of the latest technology trends. He is an innovative mindset and a commitment to staying up-to-date with advancements, he tackles complex challenges and shares valuable insights, making a positive impact in the ever-evolving world of advance technology.
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