Blockchain as a Service (BaaS) is a great way to boost the digital transformation of your business without the hassle of developing and managing sophisticated infrastructure. The technology helps businesses gain a competitive edge without significant investment into research, planning, development, and hiring.
This article uncovers the notion of BaaS, its benefits, and use cases across industries.
What is Blockchain?
Blockchain is a decentralized, immutable ledger that exists across the network and allows users to record and store transactions or any other data.
Blockchain is a chain of blocks connected with the help of unique identifiers known as hashes. Blocks contain data that can’t be altered, which makes them immutable.
Each block consists of digital data, a unique cryptographic hash, and the previous block’s hash to which it’s linked. The data on the blockchain is stored in multiple copies on multiple devices (nodes) in the network.
What does Blockchain-as-a-Service (BaaS) mean?
Blockchain-as-a-Service (BaaS) is a cloud-based blockchain solution that provides companies access to blockchain services and infrastructure without the need to develop and manage their own blockchain network.
In a way, Blockchain as a Service can be compared to a cloud service provider or a web hosting service, but specifically for blockchain.
In the case of BaaS, businesses outsource the work to blockchain development companies providing blockchain integration services, creating and running applications on the blockchain.
Building and administering blockchain applications can be rather time- and money-intensive, requiring a team of specialists on board to maintain the system. BaaS is an extremely helpful way for businesses, especially small ones, to deploy and operate blockchain-based solutions with minimal effort and costs.
Use cases of Blockchain-as-a-Service
Healthcare
Blockchain technology in healthcare helps store patient health data in a universal and transparent yet secure way, revolutionizing how data is stored and managed. Organized and up-to-date health records enable multiple medical professionals to access data and provide instant care to patients.
Blockchain helps verify the authenticity of medicines and trace their origin. This feature is beneficial for drug and vaccine manufacturers.
Logistics and Supply Chain Management
Identity verification is vital in the logistics and transportation of goods and passengers. A blockchain-based identification token significantly accelerates and simplifies the passengers’ verification process. The same applies to cargo movement, verification, and error protection.
Blockchain-based smart contracts optimize supply chains and increase their efficiency. They can help cut costs and increase transparency by automating the tracking of payments and shipments.
Blockchain-as-a-Service can be used to trace the origin of goods and combat counterfeiting.
FinTech
FinTech app development services allow FinTech companies to implement blockchain to automate financial processes and eliminate intermediaries and mark-ups. The technology also helps achieve immutability and transparency to aid in dispute prevention.
Blockchain technology has introduced smart cards and contracts, helping to settle the funds faster without the lengthy central authority verification process.
BaaS acts as a secure platform for cross-border transactions, remittances, creation and trading of digital assets, like cryptocurrencies and tokens.
Intellectual property rights
Copyright infringement and verification are major issues on the agenda in entertainment, media, and art. Blockchain can facilitate digital copyright management, cut costs, and enhance productivity.
Blockchain can be used to register and archive intellectual property entitlements like copyrights, patents, and trademarks. This provides irrefutable proof of ownership and protects intellectual property rights.
Blockchain allows artists and creators to track their works and receive royalties, as the system stores data regarding each resale.
BaaS solutions can benefit audio and video streaming services by providing tools for monitoring the use of copyright material and creating a payment structure.
Smart Contracts
Smart contracts are blockchain-based scripts that are automatically executed when predefined conditions are met. The code and the conditions exist within the blockchain network.
Smart contracts allow various parties to conduct transactions and perform agreements without external control from a central authority or legal entity. The system facilitates secure, transparent, and traceable transactions.
Blockchain-based smart contracts streamline various business processes and accelerate procedures. Smart contracts can be used to:
make timely payments;
adhere to quality standards;
process insurance claims;
transfer property ownership;
streamline NFT development;
build decentralized applications (DApps);
build Web3 development solutions;
automate supply chain agreements.
Advantages of using Blockchain-as-a-Service (BaaS)
Digitalization: Permissioned users can immediately access the documents or transactions stored on the blockchain remotely, thanks to the immutable, auditable, and transparent nature of blockchain data.
Cost and time savings: Due to digitization and automation, blockchain enhances operational efficiency, streamlines processes, and reduces compliance costs. BaaS provides businesses an easy and secure way to deploy the technology and cust costs of hiring developers, implementation, and maintenance of the blockchain.
Reduced operational risks: BaaS reduces operational risks for businesses by offering decentralization, process automation, and encrypted transactions.
Transparency: Blockchain allows companies to store and manage valuable data and offers unprecedented transparency, security, and traceability.
Customized template: Companies offering blockchain application development services provide templates that can be tailored to the business needs and existing applications. This guarantees rapid and easy deployment, as businesses don’t need to develop the system from scratch.
No development hassle: The customer’s development team doesn’t need to focus on the development and maintenance of the blockchain system, as Blockchain as a Service providers generally take care of hosting, bandwidth management, and security. This means the customer can focus on meeting its business goals, launching new products and services, and integrating new features.
How does BaaS help businesses?
Establishing Trust
Thanks to immutability, transparency, and decentralization, blockchain offers businesses an unprecedented level of trust and data integrity. Encryption keys and consensus mechanisms build trust by reaching a consensus on the status of the blockchain without relying on central authorities.
The encryption keys to the blocks a company owns should be in possession of this company to be able to alter the records when needed.
Blockchain uses Proof-of-Work and Proof-of-Concept consensus mechanisms to verify and approve all transactions.
Immutability is achieved via cryptographic hashes and unique digital fingerprints created for each block. After adding a new block to the chain, changing data in prior blocks requires revising all subsequent blocks, making it impractical.
Establishing Contracts
Smart contracts execute certain actions when predetermined conditions are met, which makes them trustworthy and reliable.
Smart contracts on the blockchain eliminate intermediaries, define legal terms, enable verification, and create immutable records. These elements are vital for contracts with financial institutions and other businesses.
Blockchain-based customized smart contracts are developed using programming languages like Vyper or Solidity. Such contracts use cryptography, sophisticated logic, and multi-signature mandates to comply with business rules and regulations.
Transfer of Value
One of the first applications of blockchain was the transfer of value of different cryptocurrencies, and the options for transfer have greatly expanded.
Most BaaS platforms support cryptocurrencies with their unique protocols and underlying technologies. For example, Bitcoin relies on the UTXO model and Ethereum – on an account-based model. Implementing cryptos into applications requires knowledge and experience with their APIs and protocols.
Tokenization plays a part in value transfer, encompassing the digital representation of assets on the blockchain. To create and manage tokens effectively, it’s vital to have expertise in token standards like ERC-20 or ERC-721 and smart contract codes.
Smart Contracts
Smart contracts allow businesses to sign automatically executed contracts with the help of encryption keys, verify identities, and keep transaction records.
Smart contracts are integrated into bytecode and executed on blockchain nodes. After deployment, the contract’s bytecode can’t be modified, ensuring consistent contract functionality.
Blockchain’s decentralized nature minimizes the risks of failures and manipulations with data, ensuring trust. Execution results are verified with the help of consensus mechanisms among blockchain nodes.
Audit
Blockchain keeps immutable records of all transactions, meaning records can’t be altered or deleted. Blocks are time-stamped and can include metadata. This approach offers capabilities for audit trail and transaction history tracking.
Structured logs and records allow businesses to analyze transactions and data, which can be helpful in internal audits and regulatory compliance.
Blockchain’s transparency means all transaction details, including time-stamp, sender, receiver, and amount, are visible to the network members.
Final Thoughts
Blockchain as a Service (BaaS) market size is continuously growing, allowing businesses to enjoy the benefits of blockchain technology without the need to invest in the infrastructure, building, and maintaining the system. Outsourcing development and management allows companies to focus on their business needs and goals instead of tech details. However, it’s vital to weigh all the pros and cons of blockchain specifically for your business before making the decision about implementation.