Blockchain as a Service (BaaS), an Important Piece of the Evolving Blockchain Puzzle

While blockchain has been around for a while now, some companies are still finding it difficult to secure the resources needed to take full advantage of this ground-breaking technology. This is particularly prominent among enterprises as building a blockchain ecosystem of an appropriate size is simply too pricey of a risk to be worth pursuing.

The reluctance enterprises have towards costly blockchain solutions has created a huge void in the market. Luckily, the rapid development of Blockchain as a Service (BaaS) poses an ideal compromise to the problem at hand.

Instead of heavily investing in blockchain solutions of their own, large companies can outsource blockchain services from a BaaS team that sets up and maintains cloud-based blockchain networks. Companies get to host their applications on BaaS networks and, as a result, they don’t have to deal with developmental and operational aspects of managing a blockchain ecosystem.

In a nutshell, BaaS and its blockchain cloud solutions ease the adoption journey for organizations whose core competencies are not currently capable of creating a decentralized network from scratch.

Obviously, this new business model is a serious game-changer in the world of blockchain service providers. Having an entire workforce to build and maintain blockchain solutions is no longer a necessity, which opens up a world of new possibilities going forward.

BaaS Fills a Massive Void in the Blockchain Market

Before we dive any deeper into blockchain cloud services, it’s a good idea to first lay down some context. Here are a few ridiculous numbers to wrap your head around:

  1. By 2025, the global revenue from enterprise blockchain networks will rise from the current $2.5 billion to an estimated $19.9 billion
  2. By 2026, the business value from blockchain solutions will increase to more than $360 billion, while this figure is expected to reach the $3 trillion ballpark by 2030


If these jaw-dropping numbers turn out to be even halfway correct, blockchain is in store for an incredible decade. Unsurprisingly, these numbers have a lot to do with the swift surge in BaaS companies.

With BaaS, even businesses unable to make their own decentralized networks get to enjoy the decisive advantages of blockchain solutions. This will play a huge part in the development of the blockchain market as it will massively expand its customer base.

How Does Blockchain as a Service Work?

When you decide to get on board with a BaaS partnership, both hardware and software needed to run your blockchain applications are fully provisioned by BaaS companies. Think of it as rentable, cloud-hosted services, only instead of dealing with something as simple as a website, you’re leasing a  full-fledged blockchain cloud storage.

Unsurprisingly, BaaS shares a lot of common ground with SaaS, both in terms of their names and how both these business models work. BaaS blockchain service providers receive a certain fee to deploy, fine-tune and manage decentralized networks for a company that gets to host its application(s) for as long as they’re paying for the service.

Other than handling operational aspects, these types of blockchain services also include the handling of various security protocols common to decentralized networks, such as the right distribution of resources, anti-hack layering, bandwidth management, etc.

All in all, the bottom line of BaaS companies is that they’re in charge of the heavy lifting while clients get to focus their efforts on developing their applications.

As far as the technical details go, a blockchain cloud storage can be configured to run on any platform currently on the market. This means Ethereum, Hyperledger Fabric, Corda, Bitcoin, Chain Core, BlockApps, Quorum and others are all viable options – it all depends on what the client’s end goals are.

Giving further assurances about the potential of the BaaS business model is the fact some of the biggest companies in the world are already jumping on board with it. Heavyweights, such as Microsoft with its Azure Blockchain as a Service or the highly popular Amazon Blockchain as a Service, are already proving BaaS’ worth by providing valuable services for their cloud customers.

The Main Business Advantages of Deploying BaaS Solutions

Organizations across a number of industries can find dozens of key strategic advantages in adopting blockchain technology. Most of these benefits apply for BaaS as well.

The main calling card of Blockchain as a Service is that it requires much less time and money than building an in-house blockchain ecosystem to run your application. That being said, let’s take a closer look at the key benefits of partnering up with a Blockchain as a Service firm instead of creating a custom DLT (Decentralized Ledger Technology) network some other way:

It’s substantially quicker to deploy

If there’s an intent to deploy a decentralized solution, the only real alternative to blockchain cloud services is to recruit or hire a set of developers and have them build an entire network from scratch.

This not only costs a lot more than going with a cloud blockchain, but it also takes more time before the network can be used.

The clear advantage of BaaS companies is that they already have a prepared blockchain solution in place, so all they need to do is customize it in accordance with the particular requirements of the application you want to run on it.

You get to enjoy high levels of efficiency

Various features, such as dynamic joining, physical resource management and switching protocols, ensure that BaaS solutions feature as much efficiency as any in-house blockchain. After all, as BaaS solutions can handle 5000 transactions per second, efficiency can certainly be described as one of the sector’s strong suits.

Better security across the board

Security and blockchain come hand in hand, and BaaS is not an exception to this rule. All distributed ledgers have an incredible track record of preventing internal and external fraudulent activities, so opting for BaaS will always lead to impressive security standards.

On that note, protection of privacy is often cited as one of the main reasons why companies opt for any form of blockchain development. Luckily, BaaS delivers on that front too as clients get to manage permission levels, nodes and keys from a user-friendly control panel.

It offers virtually unlimited customizability

While blockchain cloud services supply businesses with ready-made platforms, these networks still offer a wide array of customizable features. They provide enough flexibility to fit any application regardless of its intent or size, so conventional blockchain service providers don’t have a significant upper hand in terms of customization.

High levels of customization apply for both the fundamental infrastructure and functionalities of the BaaS network, but also for more subtle aspects of combining blockchain and cloud platforms such as bandwidth management, resource allocation, hosting and security surveillance.

It leads to optimal staffing and resource management

By hiring an external team to manage your cloud blockchain, you automatically decrease costs in terms of equipment space, power and cooling on your end.

These kinds of blockchain services also directly translate to reductions in staffing necessities. You don’t have to go deep in your pocket to hire an entire squad of experts to program and sustain your systems, plus the current IT roster can focus on getting the most out of your application.

Other than the aforementioned upsides, BaaS is also a great option for a very particular scenario – it presents an ideal choice for companies to test out the fit between blockchain solutions and their applications without going all in on the idea of decentralization.

As you can easily cut ties with a BaaS company, clients have the freedom to jump out of the arrangement and initiate an in-house blockchain deployment at any point if they become sure that these kinds of systems are indeed the right fit with their application(s).

Cost Comparison Between Self-Hosted Blockchains And BaaS

While there’s a legitimate conversation to be had on whether it’s smarter to outsource your blockchain or keep it in-house, what’s certain is that investing in a blockchain cloud storage is by far the cheaper option of the two. Whoever decides to go with a self-hosted blockchain can expect hefty fees primarily from costly infrastructure and a huge roster of highly skilled programmers.

Neither of these two expenses exist in the blockchain and cloud equation.

For BaaS services, the customer typically has to pay only for the units of service used. There are some great BaaS companies that offer their services for as low as $0.29 per CPU hour. And that’s not even coming from the bottom of the barrel as the $0.29 price tag comes straight from IBM Blockchain Platform.

All in all, it’s a financially much more sound decision to hire a BaaS company – as long as you secure the services of a good team, which leads us to our next chapter.

Most Notable Shortcomings and Issues Associated with BaaS at the Moment

While certainly promising, BaaS still has a lot of room for improvement. Most issues are bound to be ironed out in time, sure, but as of right now, here are the biggest flaws BaaS companies need to focus on solving:

  1. Arduous and error-prone installation processes can take several days to finish
  2. BaaS network environments tend to quickly get too complicated to administer
  3. A lack of hardware resources if too many clients apply for the service
  4. Fixing errors in a cloud-based blockchain network can take days of work to be done properly
  5. Inflexible environments and systems can be difficult to integrate with software from the client’s side, especially without leaving hazardous holes in security
  6. Various scaling issues, which is a common problem for blockchain development in general


As some BaaS companies are by leaps and bounds better than others when it comes to these issues, being aware of them will go a long way in helping you select the perfect partner to host your blockchain network. Here are a few other clues that may help differentiate BaaS companies worth your time from those whose blockchain services leave a lot to be desired:

  1. Sound backup solutions and established processes for cases of emergency
  2. A solid track record of deploying the blockchain network within an agreed time frame
  3. New updates to the platform are common and are transparently communicated to clients on a regular basis
  4. A proven experience in developing and deploying blockchains on a scale and environment similar to the one you are planning to execute.


Finally, we should address the elephant in the room – the biggest drawback of BaaS is that you never get to own any part of the network. The app you run on it belongs to you, of course, but the hosted system is yours only for as long as you’re paying the rent. Furthermore, there’s nothing stopping BaaS companies from pulling the plug at any time they see fit, which can shut down your app without any kind of notice.

So, as you can see, being cheaper and easier to deploy comes with a certain price, so make sure to take both the good and the bad into consideration before deciding to host an application on a BaaS network.

While Flawed, BaaS is Still an Essential Milestone for Blockchain Technology

Blockchain disruption has pushed us to the razor’s edge of technological advancement without leaving enough time for companies to nurture in-house IT departments needed to build on-premises blockchains. That’s precisely what makes BaaS a vital part of the current blockchain development industry.

BaaS and its cloud blockchain solutions enable enterprises to make massive technological strives without necessarily being ready to make that huge step on their own.

Even more importantly, BaaS could turn out to be the catalyst that leads to more widespread adoption of blockchain technology.

As a lot of companies continue to have trouble with deploying blockchains on their own, an opportunity to host a blockchain solution before going all in on an internal project will be of vital importance. As such, BaaS bridges the gap between blockchain and companies with limited resources, which will certainly play a major role in the years to come.