Blockchain As A Service (BaaS): Although blockchain technology is related to the world of cryptocurrencies, it has been increasingly used to generate solutions in other areas.
Is the term used for services that are developed within the blockchain? Before, operating blockchain technology was a tough job, and because of this, there needed to be more resistance for companies to get familiar with the blockchain.
However, today, big players like IBM, Microsoft, and Amazon offer BaaS solutions to other businesses, which has helped to spread this technology.
SaaS: What Does It Mean?
SaaS is an acronym for (Software as a Service). This term is used for solutions made on the internet that allow people and companies to use certain features without needing any software on the user’s computer.
The idea of SaaS is closely related to the emergence of cloud computing. When you create a website, you need to host it on the network. Generally, you can purchase hosting services like HostGator or Google Cloud. These services are examples of SaaS.
Through them, you focus on exclusively developing your website’s content instead of spending hours creating lines of code, connecting to the web, and programming.
However, suppose you are a person who wants to program. In that case, SaaS solutions offer features like API (Application Programming Interface) to make it easier to develop and implement the functionality of your website.
What Is Blockchain, And How Does It Work?
A blockchain is a chain of blocks on which information is recorded. This technology is commonly associated with cryptocurrencies such as bitcoin, but it can be applied in other areas.
The functioning of the blockchain may seem complicated, but I will explain it in a simplified way enough to understand the article’s content.
For information to be registered within the network, it must go through an encryption process by users known as miners.
In addition to encrypting information, users also work on securing the block identity (hash). The hash of the block being created takes into account the hash of a previously validated block. In this way, the blocks establish a connection, forming a chain.
Knowing how blockchain works and what SaaS means, we can move on to understand the main point of this article: Blockchain as a Service (BaaS).
What Is Baas?
BaaS stands for “Blockchain as a Service.” The idea is the same as that of SaaS. Still, when we talk about BaaS, we refer to solutions created within the blockchain by specialized companies with the necessary infrastructure to operate the network, bearing in mind that working with the blockchain is a complex job.
How Does BaaS Work?
The operation is similar to SaaS. Imagine that you own a company and want to use cryptocurrencies as a payment method. You have two possibilities:
- Set up the entire infrastructure to use blockchain payment networks with Ethereum, Bitcoin, or Ripple.
- Hire a third-party company that provides a ready-to-use cryptocurrency payment service.
The second option is an example of BaaS. When blockchain emerged, people began to identify how difficult this technology was to operate and pointed to this as a possible barrier to blockchain diffusion.
However, some companies like IBM and Microsoft developed friendly environments so that companies from all sectors could use the blockchain network, thus developing applications known as BaaS.
Today, companies and industries see the potential of blockchain, and the demand for BaaS has increased because of the benefits that this technology can bring to a business. Want to know why you use BaaS? Check the topic below.
Three Reasons To Use BaaS Solutions
The main reasons for using BaaS technology are:
This is the principle of the whole idea behind blockchain—a secure system for storing information that prevents fraud and changes to records.
Once the information is inside the network, it would be necessary to attack all miners’ computers to change that information. What a virtually impossible task!
Financial transactions that take place within the blockchain are less time-consuming than those that take place today. This is because there is no need for a centralized and intermediary body to approve the operations.
Did you know that an international financial transaction can take up to 2 days to be validated? Using a BaaS payment system, validation would take a few minutes.
Using a BaaS prevents companies from concentrating resources on infrastructure to operate on the blockchain.
Know that it takes considerable computational power to mine on the blockchain. It would not be worth the investment in a sector within a company to work on the blockchain network. It is more practical to hire a third-party service specialized in BaaS development.
Where To Apply BaaS Technology?
The emergence of blockchain began to be associated with cryptocurrencies. Today, it is possible to use BaaS technology in areas such as:
- Government services;
- Justice and law;
- Intellectual property;
- Food safety.
And many others. Blockchain solutions can be applied wherever there is a need to record information, track data, and streamline processes securely.
Also Read: Blockchain: Main Benefits For Companies