Knowing the advantages of blockchain technology will make it much easier to decide whether a business will benefit from it. From there, we can observe how it is altering several niches and the entire globe. Let’s discuss BaaS in detail now.
Table of contents
Check this video on Blockchain by Intellipaat
What is Blockchain?
Blockchain is a collection of blocks linked together. These blocks contain data and are immutable. Every block in a blockchain has a unique identifier, also known as a hash of the block. These hashes help in connecting each block to its previous one.
A block comprises three necessary things:
- The digital data
- The unique identifier (hash)
- The hash of the previous block with which it is linked
Blockchain consists of a distributed network. The data on the chain is distributed and stored across multiple nodes(devices) in the network. This means that the data on the blockchain is stored as multiple copies. Therefore, it can also be known as a distributed ledger.
Two of the most popular use cases of Blockchain today are:
- Cryptocurrency- Like Bitcoin and Ethereum
- Data Storage- Like Filecoin
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What does Blockchain-as-a-Service (BaaS) mean?
Before the origin of the Blockchain-as-a-Service model (BaaS), a popular model named the Software as a Service(SaaS) model came into existence.
Several small companies needed to be more capable of accessing expensive software applications due to their expensive licenses or deployments. To overcome this problem, Software as a Service was introduced.
Similarly, the BaaS model was brought about to help the small companies that could not afford to operate and manage their decentralized applications on Blockchain due to the cost factors. In the case of Blockchain-as-a-Service, there is a third-party involvement as one company or organization can offer the services of building or running an application on the Blockchain network to other companies for a fee or price.
Since establishing and maintaining blockchain applications can be extremely expensive, BaaS is an immensely helpful way for businesses to deploy their applications and services on the Blockchain network with minimal costs.
This way, a business can easily use and run applications on the Blockchain, without actually having to worry about the cost incurred during the build and maintenance.
To put it simply, we can say Blockchain-as-a-Service is similar to a web hosting service or a cloud service provider, but specifically for Blockchain and blockchain applications. This is why several cloud service providers such as Amazon and Microsoft also offer the BaaS model for their businesses.
Today Blockchain technology is not only limited to cryptocurrency, but instead, it helps in making all different types of transactions secure.
Use cases of Blockchain-as-a-Service
The following mentioned use cases exhibit how Blockchain can be used in different organizations for transparency and immunity purposes.
Healthcare – By maintaining a universal and transparent version of patients’ medical data, blockchain has revolutionized healthcare to a large extent.
Because of organized and up-to-date records, blockchain technology has enabled several medical professionals to provide immediate care to individual patients.
Furthermore, Blockchain aids in determining the authenticity of medicines. This means that any drug or chemical can be traced back to its origin.
This has been a huge help to manufacturers recalling specific chemicals for aid drugs.
Automotive – The most difficult challenge for the automotive industry is combating counterfeit parts and managing supply chains.
The blockchain platform as a service comes to the rescue here by providing end-to-end accessible records for the transportation of automotive parts. This assists automobile companies in tracking and distinguishing genuine spares from counterfeits.
Furthermore, Blockchain-as-a-Service in the supply chain and manufacturing has disrupted the industry’s efficient flow.
There is no shortage of critical components, and businesses enjoy optimal production with minimal downtime.
Transportation and logistics – Identity verification is critical in the logistics and transportation industries for both goods and passengers.
Passengers can complete the entire process quickly and easily with a single identification token. Likewise, for cargo movement, verification efficiency, and fault proofing.
Blockchain-as-a-Service offers a fail-safe mechanism for industries and other data silos.
Data storage – The risk of data loss is greatly reduced when data is stored in a decentralized Blockchain. Regulated industries such as healthcare, real estate, and so on benefit greatly from Blockchain’s immutable, secure data storage facility.
Document tracking – Blockchain technology allows for the creation of a distributed, immutable document tracking system. By storing the documents on Blockchain, all participants have equal access to the data. Furthermore, because Blockchain technology is immutable, the documents are secure.
FinTech – Blockchain in FinTech has brought peace to the average banking customer by automating the majority of the financial process. In addition to adding immutability and transparency to avoid disputes.
Customers can now use smart cards thanks to blockchain services. These smartcards allow for faster fund settlements without the need for central authority verification.
How does the BaaS Model work?
When a company (the client) engages in a Blockchain-as-a-Service agreement with an IT partner, they essentially enter into a contract where the BaaS partner agrees to set up all of the necessary Blockchain infrastructure for the customer in exchange for a service fee outlined in the contract agreement.
The blockchain network is maintained and operated by the BaaS provider, and users can connect to it via an API or web-based interface.
This wants to free users from having to worry about the technical aspects of setting up and maintaining the network and allow them to simply create and manage their own blockchain applications, such as smart contracts and decentralized apps.
BaaS also facilitates scalability and flexibility because it is so simple for users to modify the network’s capacity and size as required.
Contracts for the provision of Blockchain-as-a-Service (BaaS) also include maintenance duties including resource optimization, incident management, system health monitoring, proactive security monitoring, and bandwidth management.
Customers that adopt the Blockchain-as-a-Service model are free to focus on their core business operations and competitive strategies while leaving the maintenance of the Blockchain infrastructure and its performance to the BaaS partner.
Advantages of using Blockchain-as-a-Service (BaaS)
Below mentioned are some major pros of using Blockchain-as-a-Service:
- Time and money: Organizations can save time and money by using the blockchain-as-a-service (BaaS), which also gives them a secure way to employ the technology. Additionally, the cost of engaging developers to deploy and maintain software is reduced by blockchain.
- Transparency: Blockchain technology is being utilized by businesses not only to store and share valuable information but also to provide the high levels of transaction transparency and traceability that modern consumers have come to expect.
- Focus on features: Furthermore, because they are not required to build it from the ground up, an organization’s development team can focus on their job requirements while allowing blockchain-as-a-service to supplement their projects.
Once the blockchain infrastructure is in place, the service provider is responsible for its upkeep, which typically includes bandwidth management, resource allocation, hosting, and security features.
- Customizable template: Companies offering blockchain-as-a-services can provide templates for users to easily integrate into an existing system and applications, allowing them to avoid building their architecture from the ground up.
Oracle’s Blockchain Cloud Service allows organizations to build their networks on top of its platform and is “future-proofed,” meaning that future developments and features do not have to be rewritten into the code.
- Testing: Perhaps the most exciting outcome of blockchain is its ability to allow organizations to experiment with new technology without the risk of a failed in-house deployment.
Organizations can test their code within the confines of the blockchain, creating a “proof-of-concept” or confirming the feasibility of the tested feature.
How does BaaS help businesses?
The popularity of blockchain is steadily growing as a result of the technology’s ability to provide organizations with specific features based on their needs. It’s becoming more popular as a result of the transparency it provides to you and your business partners for every transaction.
Establishing Trust
The way that blockchains are built creates a certain level of confidence. For example, no data can be removed and all chain members can see all of the blocks. In business, this transparency is essential.
The setup of the encryption keys is also crucial. The keys to the blocks that you own should be in your possession and that of your company so that you can change the records.
Establishing Contracts
For many types of contracts, being a part of a blockchain eliminates the need for an intermediary. The technology provides the capacity to define legally enforceable terms, verify identification, and create an immutable record.
These three elements are crucial parts of contracts with financial institutions among other businesses.
Although these contracts have not been put to the test in court, current trends point to blockchain being considered by the law in the same way as a regular contract.
Transfer of Value
The value of different cryptocurrencies could be transferred, which was one of the first applications of blockchain technology.
This is still possible with blockchain technology. In any case, the possible products with which you can swap value have greatly expanded.
Smart Contracts
A smart contract can refer to a variety of things. The first is the notion that people can use blockchain technology to sign contracts using their encryption keys.
These contracts are deemed smart since they employ technology to authenticate identities and keep records.
Blockchain technology can be used to create smart contracts that automatically execute when specific circumstances arise.
You can store a piece of code in a block’s record because it is just data. Once the price is appropriate, the contract may then align to buy a particular stock, for instance.
Audit
Blockchain records include timestamps and cannot be deleted. Blocks can even have additional metadata choices for auditing. It’s a great approach to always be able to show the history of your files or transactions.
Conclusion
Blockchain-as-a-Service is currently a unique way to streamline the digital transformation process. It can help your company gain a competitive advantage without having to invest in research, planning, or infrastructure.