Blockchain-as-a-Service (BaaS) is starting to gain real traction as an offering.
This is no surprise. The technical complexities and operational overheads involved in creating, configuring, and operating blockchain solutions can be formidable barriers for enterprises.
Factor in a shortage of accomplished and experienced blockchain developer teams, and it makes sense for businesses to leverage cloud-based solutions to build, host and manage their blockchain apps and smart contracts.
BaaS is a clear and sensible route – perhaps the only foreseeable route – to blockchain’s mass adoption. The BaaS market is expected to grow from around $623million in 2018 to $15billion by 2023 – a pretty impressive compound annual growth rate of 90%.
But to achieve this kind of growth, providers know they need to find ways to solve the current data storage scalability issues.
This is a more pressing problem than most people realise.
A guide to blockchain-as-a-service (BaaS) for CTOs and IT leaders
A tidal wave of data
Innovation and economic development across the world in the 21st century is becoming increasingly dependent on data. The volumes of data we generate, and the insights we extract from this data, are expanding exponentially. Factor in the Internet of Things, and the imminent mass arrival of driverless cars on our roads, and this expansion rate will soar off the charts.
Worryingly, the world isn’t doing enough to prepare for this new reality. Of course, cloud computing giants like Oracle, Microsoft and AWS already nicely handle the world’s database needs. But for them to scale up in line with the exponential growth trajectory of data, they need to add larger and more efficient centres continually. This simply isn’t sustainable.
Turning to nature for help
But a far more elegant solution that doesn’t require the mass construction of vast data centres across the world is emerging.
In nature, we see fish working together in schools to hunt and move around safely. Birds fly in flocks, detecting motion in chain reactions. Bees swarm when a queen bee leaves a colony with thousands of worker bees to find a new home.
These creatures gather together to act as a single organism with a collective “wisdom”.
Blockchain technology can bring humans together in similar ways. Decentralised cloud systems, which can distribute information across networks, give humans the power to work together in swarms. And these swarms could provide the long-term data solution the world is looking for.
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Using spare capacity
In return for renting out their hardware to a decentralised data storage network, businesses and individuals across the world could receive tokens. Their computers, acting as storage nodes, would keep the data in shards or fragments, with one node never holding all the information. For this reason, swarm networks are much more secure than cloud networks that rely on centralised server farms.
The fact that each computer in such a network would be encrypted in different ways means a successful attack would be virtually impossible. The data being stored could only eventually be pieced together by a keyholder.
Speed and scale
A data storage network of thousands of computers spread out across the world could be lightning fast. Think of swarms like torrent peers in peer-to-peer networks. When someone wants to access their data from the swarm it comes from the closest nodes. And when that data is retrieved from several swarms at once, it comes in parallel.
It’s a scalable and more environmentally friendly system than centralised cloud storage – making use of the hardware that is already out there in the world. During peak usage times, this hardware can be called into action, while during low usage times it can stand down. While centralised cloud providers have to build new data centres to scale up, a decentralised cloud can simply incentivise new users to lend out free hard-drive space.
Building a decentralised internet
A new, decentralised internet is already in the process of being built. Blockchains like Ethereum can be thought of as the new operating systems. FileCoin or Storj do file storage (just like Dropbox or Box do on the centralised web). Then there are companies like Golem, which are harnessing computer power everywhere to build a worldwide supercomputing system. A decentralised internet database that stores and manages data so it can be easily accessed by websites and applications now need to be built. BaaS providers’ futures rely on it.
Why should CTOs in the financial sector consider blockchain technology?
A BaaS future
Good BaaS providers take care of keeping the blockchain infrastructure and its associated artefacts up and running, providing support activities like bandwidth management, allocation of resources, and hosting requirements.
This is a manageable – even relatively simple – task at the moment because we’re at the very early stages of the blockchain. In internet terms, we’re in the mid-90s, when the very concept of the internet was hard to explain, when the few that used it relied on dial-up connections, and when dealing with larger files like video simply wasn’t feasible.
Look what happened to the internet next.
Thanks to the technological infrastructure and computing power already in place, blockchain’s development will, of course, be far more rapid. We’re on the cusp of exponential progress, and the BaaS providers can look forward to some profitable years ahead. But the data storage problem needs to be addressed.
Written by Pavel Bains, CEO of Bluzelle.
