It’s been a strange year, 2020. The last 12 months featured a pandemic that has no sight of abating anytime soon, an 11th-hour trade deals that took the UK -and the whole of Europe- back from the brink of commercial chaos, and more. What wonders will 2021 bring is anyone’s guess, but truth be told, few will miss the last 12 months.
Funny thing is, blockchain technology could have addressed some -if not all- of the issues that turned 2020 into such annus horribilis for so many people worldwide. In a recent piece, we discussed a range of use cases for blockchain technology, including early pandemic detention and digital identity. We will soon follow that piece with more use cases, but the point is that blockchain can, and will become an integral technological asset very soon, particularly for enterprises.
In this piece, we will focus on Blockchain-as-a-Service (BaaS), one of the most versatile applications of the blockchain provision environment.
Blockchain-as-a-Service: An enterprise guide
Everything needs a definition to become clearer, and this service modality is no exception. In simple terms, BaaS refers to the provision and management of blockchain services to enterprises by third parties. Said differently, it’s a business model where a private company offers cloud-based services to a client. The private agency creates the infrastructure and offers configuration, deployment, data security, and many other benefits to the client enterprise, greatly simplifying the latter’s access to and availability of blockchain technology.
There are many companies out there offering BaaS, but within the European realm, Europechain is a leading, fully GDPR-compliant BaaS provider. BaaS agencies like Europechain act as bridges between enterprise companies and the blockchain platforms these companies want to reach.
One of BaaS’ main provisions centers around the Proof-of-Concept (PoC) principle, the process to determine the real-world feasibility of a particular blockchain project. Many ideas might sound great on paper, but their real-world applicability might be somewhat lacking.
A PoC blockchain offers an additional advantage, as it tests the waters for potential investors. Again, it is one thing to offer a theoretical concept, but quite another to see that idea tested out and running on a blockchain. Investors would probably be swayed by the latter.
BaaS business models have achieved one key goal: To make blockchain development simpler and safer for organizations and enterprises looking to implement blockchain solutions, but were hesitant to do so because of safety concerns that might have perhaps been misguided by rumours and hearsay. Blockchain technology has greatly improved and evolved from its niche beginnings, but it still carries a residual stigma because of its early association with Bitcoin.
But how does it all work?
Every BaaS provider features its own idiosyncrasies and terms and conditions, but the core process of providing blockchain platform/s as a service is actually quite simple. How about an analogy to explain it?
When you sign up to an internet provider, a cable TV company, or a streaming service, all you need to have is a laptop or a TV, or any other device that you can connect to those services. The provider itself looks after the rest. They provide the technological platform, its deployment and maintenance, and any other aspect associated with the provision of the service. You, the end user, simply avail of that service and pay a monthly or quarterly fee. (Netflix, for instance, is another company that uses the -aaS suffix, only in Netflix’s case is Software-as-a-Service)
A BaaS provider does the exact same thing. They host the service, implement the necessary security protocols, manage the bandwidth, and let you, the user, use all this infrastructure for a monthly or quarterly fee, just like any other service.
In essence, a BaaS model enables the client to focus on the business’ core functionalities and strategies, while the -aaS provider leases out the technical infrastructure.
How to choose the right BaaS provider
There is no hard and fast rule to choose one provider over another, as it all comes down to the client’s requirements, existing business relationships, and of course, pricing. But generally speaking, these are the basic aspects to consider when searching for a BaaS provider:
- Backend infrastructure
- Integration capabilities
- Data security
- Provisioning speed
- Pricing model
Blockchain is the biggest opportunity set we can think of over the next decade or so, according to Nasdaq’s Chief Executive Bob Greifeld. And Europechain’s Founder and CEO, Rhett Oudkerk Pool, agrees when he says that ‘The future of blockchain in Europe is compliant.’
BaaS has established itself as a leading business model in the crypto/blockchain itself. -aaS models work. Netflix is a prime example of this. Amazon Web Services (AWS) is another. And as long as there is a need for blockchain, there will be good business for BaaS providers.