Blockchain as a service (BaaS) is a service model provided by third-party vendors to help companies optimize existing blockchain technologies and transactions for their business goals and needs.
What is Blockchain as a Service?
But despite being a hot topic in tech and pop culture, there is still a lot of confusion on how blockchain can be implemented for business use. As a result, several major and lesser-known providers offer solutions in BaaS platforms.
Portions of this definition originally appeared on Enterprise Networking Planet and are excerpted here with permission.
How does BaaS work?
BaaS enables businesses to meet compliance and transparency requirements by securely completing transactions and data transfers over a blockchain.
Blockchains use cryptography to develop a distributed network, allowing authorized participants to make changes to a digital ledger. These changes or transactions are all stamped and documented on an encrypted block which is saved and linked to the previous block in the transactional chain, creating a “blockchain” over time.
Adapted from software-as-a-service (SaaS) models, BaaS offers businesses a way to easily implement agentless documentation. Other ways BaaS providers help businesses with their blockchain goals include:
- Development: BaaS enables businesses to create the right blockchain protocols and other details for their needs.
- Implementation: BaaS offers assistance with hardware provisioning, software installation, certificate development and management, and other network configuration requirements.
- Consultation: Providers guide in-house teams as they manage or add to their blockchain strategy.
- Maintenance: Many features of blockchain implementation need to be updated and closely monitored for security over time in addition to keeping up with the business’s growing blockchain infrastructural needs.
- Hosting: Several BaaS providers host private blockchain networks for their customers who want to separate and privatize their blockchain needs.
Enterprise Networking Planet takes a look at 10 top BaaS providers.
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What are the benefits of BaaS?
Smart Contract Development
Using smart contracts, BaaS offers a way to simplify merger and acquisitions transactions and eliminate the need to meet expectations of outside institutions and individuals.
Smart contracts are contracts that are hosted, time-stamped, and encrypted on the blockchain ledger, which certifies transactional changes by both parties without needing certification from additional parties.
In addition, these contracts can be used to exchange NFTs, or non-fungible tokens, so buying and selling organizations can complete a transaction from any distance and at any time.
Specialty Program Development
Using NFTs, businesses can keep track of customer interactions with real-time digital ledgers that can integrate with other applications and databases. As a result, they are able to monitor customer behavior toward their brand. This data can then be used to track customer milestones and automate company loyalty programs.
While there is no guaranteed central security hub, blockchain offers transparency and detailed tracking information on the ledger to prevent unwanted interaction on the chain.
And in private blockchain networks, only authenticated users have access to make changes. Therefore, even if an attacker were to get into the blockchain, permanent timestamps and transaction recordings make it difficult to alter ledgers that have already been stored.
Business Process Efficiencies
Blockchain enables businesses to organize and automate processes in e-commerce, identity management, and supply chain management among others.
Moreover, blockchain provides regular updates of the transaction ledger as well as the ability to track assets at every stage of a product lifecycle. Because of this, many businesses opt to use BaaS with or even in place of enterprise resource planning (ERP) and other business intelligence software.