Though blockchain is a hot trend in technology right now, not everyone seems to know exactly how to use it and there are still few experts in the field. However, one thing is for sure: businesses are eager to harness blockchain technology and software-as-a-service (saas) as a kind of distributed ledger technology for their own profit.
Several companies are stepping up to the immense demand for blockchain technology by establishing a cloud-based blockchain. Amazon’s AWS blockchain services allow easy and adaptable information sharing since it integrates with the already-popular AWS cloud service. IBM has created a high-efficiency model that lets users record and look up transactions at auditing levels. Microsoft’s inexpensive and low-risk platform makes it easy for businesses to collaborate and experiment with new business processes before they launch them in-house. R3 Corda has the largest group of collaborators—about 100 financial institutions—that, when using the service together, can effect transactions globally without central authorities and create better financial markets. By working together through blockchain, companies can ensure accurate and safe transactions without discrepancy or risk.
Though the focus seems to be in the financial front currently, blockchain has the potential to be used in all kinds of fields, such as music, law enforcement, ride sharing and education. Its early stages will determine how it is used in the future, but first blockchain users must learn how to use it and use it responsibly.
Pros to Blockchain as a Service
- Transparency: Businesses are looking to blockchain technology not only to store and share valuable information; blockchain allows high levels of transparency and traceability of transactions that consumers are learning to expect in the digital age.
- Time and money: Saas’s like the ones offered above outsource the blockchain service (baas) to help organizations save time and money from building their own blockchains and give them a reliable way to use the technology. Blockchain also saves costs on hiring developers to deploy and maintain software.
- Customizable template: For those looking to avoid building their architecture from the ground up, companies offering blockchain services can provide templates for users to easily integrate into an existing system and applications. Oracle’s Blockchain Cloud Service lets organizations build their own networks off its platform and is “future-proofed” so that later developments and features don’t have to be reworked into the code.
- Focus on features: Additionally, since they don’t have to build it from scratch, an organization’s development team can focus on their own job requirements and allow the blockchain service to complement their projects. Once the blockchain’s infrastructure is set-up, the service provider maintains it, usually with bandwidth management, resource allocation, hosting and security features.
- Testing: Perhaps the most exciting outcome of blockchain is its ability to let organizations try out new technology without the risk of a failed deployment in-house. Organizations can test their code within the confines of the blockchain, which creates a “proof-of-concept,” or confirms the tested feature’s feasibility.
Cons to Blockchain as a Service
- Lack of knowledge: Organizations rushing to join the club may be too eager to take up blockchain technology. Those without the proper know-how, training and understanding could unintentionally put their organizations at risk for failure and a wasted investment. Alternately, companies that are intimidated by the technology may miss out on its dry potential.
- Still new: Startups developing with Blockchain technology aren’t using verified algorithms.
- Personnel and support required: A qualified and dedicated staff or host is vital to this type of technology since one vulnerability could cost a lot. Computer World cites the instance where a coding vulnerability led to hundreds of millions in Ether cryptocurrency being frozen and locking up $300 million of other people’s money.
- Energy use: Blockchain uses a lot of energy. As one of the largest networks in the world, Blockchain uses as much electricity as Nigeria. Though people are working on solving this issue, it is having massive repercussions both economically and environmentally.
- Compliance issues. Since blockchain relies on dispersing information across a global network, international regulations could affect the information shared across borders. So, for instance, though AWS centralizes its offering, the decentralized nature of blockchain could lead to some compliance issues concerning data residency as it is hosted in other countries.
- Scalability issues. Decentralization can create an environment where if usage drastically increases suddenly in on application, another’s processes could be impeded. Users must understand the nuances and select the best method to work with their needs and capabilities.