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- Is Blockchain-as-a-service a workable solution?
- Is Blockchain-as-a-service for business the answer to how to make Blockchain technology accessible to an audience?
This article will discuss the BaaS solution to business work, the benefits, and how to select the best BaaS providers in the market.
What is a Blockchain?
A blockchain is a distributed ledger or database that is shared between nodes of a computer network. A blockchain is a digital database that stores information in an electronic format.
Blockchains are most well-known for their role in cryptosystems such as Bitcoin. They keep a decentralized and secure record of transactions. Blockchains are unique because they guarantee the security and fidelity of data records and can generate trust without the need to be trusted by third parties.
A blockchain's data structure is a crucial difference from a traditional database. Blockchains collect information in blocks that are organized into groups.
Each block has a specific storage capacity linked to the previously filled block. This creates the chain of data called the blockchain. Every new block added after a block has been filled is combined into a new one, which will be added to that chain once it's complete.
A database typically structures its data in tables. However, a blockchain structures its data in chunks (blocks), then strung together.
This data structure creates an irreversible timeline when implemented in a decentralized manner. Once a block has been filled, it becomes part of the timeline. Every block is assigned a specific timestamp when added to the chain.
What is Blockchain-as-a-service?
The technology is now available in the cloud and as a service to offer the benefits of Blockchain-based services to a wider range of users.
It is operationally similar to the SaaS and PaaS models. This allows cloud-based storage and apps.
This allows companies of any size to access Blockchain-based technologies without investing in in-house development.
BaaS allows companies to use the service of a Blockchain provider, where they can create Blockchain applications at minimal expense. This is why it has been a crucial part of the Blockchain technology trends.
BaaS is a business solution that requires a certain amount of centralization. All transactions must be routed through the host's Blockchain services.
Companies are often wary of Blockchain adoption because it is at the heart of decentralization.
How Does Blockchain-as-a-Service Business Model Work?
A blockchain-as-a-service business model describes how third parties install, host, and maintain a Blockchain network on behalf of organizations.
In return for fees, the service provider provides services such as setting up Blockchain infrastructure and technology.
In many ways, the role of Blockchain-as-a-service for business is similar to that of a web hosting provider.
Customers can use the cloud-based solutions to develop and host Blockchain applications and smart contracts within the ecosystem managed and managed by the provider.
Here is a visual showcasing the working of Hyperledger Cello Blockchain-as-a-Service, a BaaS-like Blockchain module utility system and toolkit under the Hyperledger project.
BaaS integration into traditional businesses supports resource allocation, bandwidth management, data security features, and hosting requirements.
BaaS has the most significant impact on business because enterprises can focus on their core business and not worry about the complexity of Blockchain operations.
How Blockchain-as-a-service is Shaping Businesses
This is an enormous amount for modern businesses. Blockchain-as-a-service exclusively shapes startups and SMEs that are highly dependent on large data silos.
BaaS includes intelligent data protection and a competitive edge, as well as the ability to expel third-party delegates. This is a cost-saving measure. Below are global numbers for BaaS in the market.
Both businesses and consumers are adopting Blockchain technology. The overhead costs associated with infrastructure development, configuration, operation, maintenance, and technical issues are significant barriers to adoption.
Blockchain's benefits for SMEs are enormous but resource-intensive and energy-consuming, which prevents widespread adoption.
Businesses can rent a Blockchain infrastructure in BaaS to learn the skills required to manage the infrastructure.
The investment required to enter the technology sector is also lower. The service agreement can be scaled up or terminated at short notice.
It allows businesses to remain at the forefront of technology without taking unnecessary risks.
BaaS to start-ups
BaaS is ideal for small businesses that outsource technology and do not have to be involved in the workings of the blockchain.
These firms can better understand the technology without needing to create their own blockchain.
Many industries use BaaS integrations for supply chain management, identity management, and payment processing. The ideal solution to many SME problems, such as lack of transparency and elimination of intermediaries, is Blockchain development services.
Industry-Wise use Cases of Blockchain-as-a-Service
Blockchain is a data management platform. This means that all solutions in Blockchain territory will have data keeping at their center.
These use cases demonstrate how blockchain can be used by different businesses to achieve transparency and immunity.
1. Healthcare
Blockchain Technology has made healthcare more accessible and efficient by keeping an open, transparent record of all patients' medical information.
Due to its organized and up-to-date records, blockchain technology has allowed many medical professionals to care for patients instantly.
Blockchain can also be used to verify the authenticity of medicines. This allows any drug or chemical to be traced back to its source.
This greatly benefits manufacturers who recall certain chemicals as aid drugs.
2. Automotive
Automotive industries face the biggest challenge of managing supply chains and resisting counterfeit parts. The blockchain platform is a service that provides end-to-end records for transporting automotive parts.
This allows automobile companies to distinguish genuine spare parts from counterfeits.
Blockchain services have also disrupted industry flow. Businesses can produce optimally with minimal setbacks because essential parts are always supplied.
3. FinTech
FinTech's blockchain technology has made banking more accessible and brought peace to customers. Blockchain technology also provides transparency and immutability to avoid disputes.
Customers have access to smart cards through blockchain services. These smart cards allow faster settlement of funds without any verification from any central authority.
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4. Transport and Logistics
Logistics and transportation industries rely heavily on identity verification of goods and passengers. Passengers can complete the process quickly and easily with a single identification token.
The same applies to cargo movement, verification efficiency, and fault proof.
The Blockchain Platform-a-service is a fail-safe solution for industries and other data silos.
You can use Blockchain development services not only for specific industry use cases but also for general purposes like:
5. Document Tracking
Blockchain technology allows for a distributed and immutable document tracking system. All participants have equal access to all documents by keeping them on the blockchain.
Blockchain technology is also immutable, which ensures that documents remain secure.
6. Data Storage
The risk of losing data is significantly reduced when data is stored on a decentralized Blockchain. This secure, immutable data storage on the blockchain is a massive benefit to regulated industries such as healthcare and real estate.
7. Contract Execution
The intelligent contract's blockchain service provides a platform for contract execution that promises high transparency.
Because it is distributed, all parties should be equally informed.
Blockchain infrastructure-as-a-service has many benefits. It allows for the discovery of new use cases. This allows enterprises to collaborate on real-world blockchain use cases without making long-term commitments.
They would need to partner with a Blockchain service provider and then fully embrace blockchain's capabilities.
We have now looked at how Blockchain platform-as-a-service can be beneficial for SMEs as well as enterprises. Let's look at its regional adoption.
The Region Wise Adoption of Blockchain-as-a-service
BaaS has an extensive global market in the U.S., Mexico, and Canada. This is due to many SMEs and large companies based in the U.S.
and the willingness to integrate the technology with public utility services.
Europe is also a leading BaaS market. The government support of different countries is one of the main drivers for Blockchain adoption.
BaaS integration is third in the Asia Pacific (APAC)region. The technology is expected to grow due to the integration of BaaS in traditional businesses as well as the growing investment in Japan and South Korea.
Several tech companies are now offering Blockchain platform-as-a-service to businesses. Here are some examples:
The Top Blockchain-as-a-service Providers
A look into the Alternative - Self-Hosted Blockchain
We have examined the BaaS ecosystem and how Blockchain infrastructure-a-service impacts small businesses and the top providers.
Although it is a good idea, it can be detrimental for businesses to use this approach. This is because they could lose the essence of Blockchain fundamentals and decentralization.
What is the alternative? Self-Hosted blockchain is the answer.
The Self-Hosted Blockchain App Development Costs are generally higher due to startup, retirement, and operational costs.
This model also allows for a cost of up to 100 thousand dollars to develop and deploy a smart contract.
A Blockchain app hosted on the cloud as a BaaS offering costs $0.29 per CPU hour. Businesses would pay only for the services they use and not as much as they spend.
When discussing Blockchain services, it is essential to consider "How to choose Blockchain platforms that accelerate your growth."
You might be concerned about the cost of BaaS. The cost of BaaS depends on several factors, such as the number of concurrent transactions, the transaction rate, and the payload on transactions.
To get an exact range and to understand Blockchain development services, please visit "How to calculate Blockchain app development costs."
The Benefits of Blockchains
Accuracy in the Chain
A network of thousands of computers approves transactions on the blockchain network. This eliminates nearly all human involvement in the verification process.
It results in less human error and a more accurate record of information. Even if one computer made a mistake in computation, it would not affect the rest of the blockchain. It would have to be committed by at least 51% of network computers for the error to spread to other blockchains.
This is a difficult feat considering the number of proliferating Bitcoin-related networks.
Cost Reductions
A bank is usually paid to verify a transaction. A notary may sign documents, or a minister can perform marriage ceremonies.
Blockchain eliminates the need to verify third parties and all associated costs. As payment-processing banks and banks have to process credit card transactions, nominal fees are charged by business owners.
On the other hand, Bitcoin has no central authority and only a small transaction fee.
Decentralization
Blockchain doesn't store any information in a central place. Instead, blockchain information is copied and distributed across a network.
Every computer on the network updates its blockchain whenever a block is added to it. Blockchain is easier to manipulate if it is distributed across the network rather than stored in a single database.
A hacker could only access a single copy, not the entire blockchain if they had access to it.
Efficient Transactions
Transactions made through a central authority may take several days to settle. For example, if you try to deposit a Friday night check, you might see the funds on Monday morning.
Blockchain works 24/7, seven days per week, and is open during business hours.
Transactions can be completed within 10 minutes and are considered secure within a few hours. Cross-border trades are especially useful because they take longer due to time zone issues.
All parties must also confirm payment processing.
Private Transactions
Many blockchain networks function as public databases. Anyone with an Internet connection can see a list of transactions from the network.
While users can access transaction details, they cannot access the identifying information of those who made the transactions. A common misconception is that blockchain networks such as bitcoin are anonymous, even though they are confidential.
By entering their special code, sometimes referred to as a public key, a user can carry out a public transaction.
The blockchain is where this data is kept. Their personal information is not. Only on exchanges that demand identification may a person buy Bitcoin. Yet, their Blockchain address is connected to their identity.
But a transaction, even if tied to a name, does not reveal personal data.
Secure Transactions
The blockchain network must verify the authenticity of a transaction once it is recorded. The transaction details are verified by thousands of computers connected to the blockchain network.
Once a computer validates the transaction, it is added to the blockchain block. Each blockchain block has its unique hash and the hash of any block that preceded it. If the information on a particular block is changed in any way, its hashcode will change.
However, the hash code of the block following it will not. This discrepancy makes modifying information on the blockchain extremely difficult.
Transparency
Many blockchains are open-source software. This means anyone can see its code. Auditors can inspect cryptocurrencies such as Bitcoin for security.
This means there is no authority to control the code of Bitcoin or how it is edited. Anybody may recommend system improvements or modifications. Bitcoin can be updated if most network users agree that the upgraded code version is valid and worth the effort.
Banking for the Unbanked
The most critical aspect of blockchain and bitcoin is its ability to be used by anyone regardless of ethnicity, gender, or cultural background.
1.7 billion people need access to bank accounts or other means of storing money or wealth. Nearly all these people live in developing countries, where cash is scarce, and the economy is still in its infancy.
They often make little in cash and only earn a small amount. These people then have to hide their cash in hiding places in their homes or other locations.
This can make them vulnerable to theft or unnecessary violence. You can store the keys to your bitcoin wallet on paper, on a cheap phone, or even in your mind. These options are more accessible to conceal than a small amount of cash under a bed.
The future blockchains are looking for ways to store wealth, property rights, and medical records.
The Drawbacks of Blockchains
Technology Cost
Blockchain is not free, but it can help consumers cut costs on transaction fees. The bitcoin network's PoW algorithm, which it utilizes to validate transactions, consumes a lot of processing power.
The power of the bitcoin network's millions of computers is comparable to the annual consumption in Norway and Ukraine.
Users continue to increase their electricity bills to verify transactions on the blockchain, despite the high cost of mining bitcoin.
Because miners who add blocks to the bitcoin blockchain are rewarded with enough Bitcoin to make their efforts worthwhile, blockchains that don't use cryptocurrency will require miners to be compensated or incentivized to verify transactions.
Solutions are addressing these problems. Bitcoin-mining farms, for example, can be set up to use excess natural gas from fracking sites or solar power.
Data Efficiency and Speed
Bitcoin serves as the ideal illustration of the blockchain's potential inefficiencies. It takes approximately 10 minutes for Bitcoin's PoW system to add a block to the blockchain.
It's estimated that the blockchain network can handle seven transactions per second (TPS) at this rate. While other cryptocurrencies like Ethereum perform better than bitcoin, they still have limitations. For context, 65,000 TPS can be processed by the Visa legacy brand.
This issue has been solved for many years. Blockchains boast over 30,000 TPS. After Ethereum launched an upgrade, which includes sharding, a division of the database to make it more accessible to all devices, including tablets, phones, and laptops, its merge between its leading network and beacon chain, Ethereum is expected to be able to deliver up to 100,000 TPS.
This will improve network participation, reduce congestion and increase transaction speeds.
Another issue is that each block can only hold so much data. Block size has been and will continue to be a significant issue for future scalability blockchains.
Illegal Activity
The blockchain network's confidentiality protects users against hacks and protects their privacy. However, it allows for illegal trading and other activity.
Silk Road is the most prominent example of blockchain being used for illicit transactions. It was an illegal online marketplace for money and drugs operated from February 2011 through October 2013. It was shut down in 2013 by the FBI.
Using Tor Browser, users can use the dark web to buy, sell, and track illegal goods illegally. They also can make illegal Bitcoin and other cryptocurrency purchases.
Current U.S. regulations require financial service providers to obtain customer information when opening an account. They also need to verify each customer's identity and ensure they are not on terrorist lists.
This system has both pros and cons. This system allows anyone to access financial accounts, making it easier for criminals to transact.
Many argue that cryptocurrency has many positive uses, such as banking the unbanked, and the disadvantages of using it for illegal activities, especially since most of the money is untraceable.
Although Bitcoin was initially used for these purposes, its transparency and maturity as an asset have seen criminal activity migrating to other cryptocurrencies like Monero or Dash.
Only a small percentage of Bitcoin transactions today are illegal.
Regulation
Many people in the crypto industry have expressed concern about government regulation of cryptocurrencies. As Bitcoin's decentralized network grows, stopping it becomes increasingly difficult and almost impossible.
However, governments could make it illegal for anyone to own or participate in cryptocurrencies.
As large companies such as PayPal allow ownership and use of cryptocurrency on their platforms, this concern has become less critical.
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Conclusion
Cyber Infrastructure Inc. is a Blockchain Development Firm with extensive knowledge and experience in developing and managing decentralized solutions.
Blockchain experts can provide various decentralized solutions to increase your ecosystem's transparency, security, and scalability.
We can help you find top-tier BaaS solutions that meet your business's needs. For personalized recommendations, contact our experts.
Blockchain is making waves thanks to many practical mobile applications explored and implemented.
Blockchain is a buzzword that every investor in the country knows. It promises to make government and business operations more efficient, secure, and cost-effective while requiring fewer intermediaries.
It's not a matter of whether legacy companies will adopt blockchain technology but when. As we enter the third decade of blockchain, it's not a question if they will.
We see an increase in NFTs and tokenization of assets. Blockchain will experience significant growth in the coming decades.
