Blockchain cloud comparison: What is blockchain-as-a-service (BaaS)?

Welcome to another installation of Cloud Provider Comparisons. In this series, we take a look at the same cloud services across different cloud providers. We'll look at the similarities, the differences, and anything else that might be interesting. In this post, we're going to be digging into what the cloud providers have to offer in the way of blockchain.

To understand blockchain, just know that a block is just some chunk of data. It can be a financial transaction, an invoice, a bill of lading, most anything really that can be stored digitally. That block also includes something else — a hash from the block added to the chain right before it.

What is a hash? Think of it as a mathematically calculated fingerprint that represents all the data in that block.

Each block includes the fingerprint of the prior block, and it's this chaining of hashes that gives the blockchain its immutable properties. If someone were to go back and change a transaction in the chain, that would change the hash of that block and also all the subsequent hashes.

Blockchain-as-a-service (or BaaS — though the "BaaS" acronym is also more commonly used for "backend as a service") is a cloud-managed platform that allows people and organizations to more easily and quickly build, host, and manage blockchain applications.

With blockchain-as-a-service, a third-party handles the backend and infrastructure, lowering the barrier around blockchain adoption for individuals and organizations.

When you hear the word “blockchain,” you might think of bitcoin or cryptocurrency. For many people, that's the context in which they first heard the term. But the concept of a blockchain predates all that.

Back in 1982, David Chaum proposed a blockchain-like process in his PhD dissertation at the University of California, Berkeley.

Nearly a decade later, researchers at Bellcore published a paper on using a blockchain method to guarantee document timestamps. And they would go on to create a company called Surety (more on them in a second). It wasn't until 2008 that a person or group of people, calling themselves Satoshi Nakamoto, created a blockchain concept that would go on to power Bitcoin.

Back to Surety: Every week since 1995, Surety have been publishing the then-current hash of every electronic record they have ever sealed in the Public Notices section of The New York Times. This taps into another strategy blockchains leverage, and that’s the fact that it is widely witnessed. The more widely distributed a hash is, the more difficult it would be for someone to slyly change some block already in the chain. This concept ensures integrity in public and consortium blockchains as all the participants have copies of the current hash.

Today, blockchains are used in a wide variety of applications, such as supply chain traceability, real estate transactions, retail loyalty rewards programs, and even digital voting.

How do the cloud providers stack up when it comes to blockchain? Pretty differently.

As of right now, Google Cloud Platform (GCP) does not offer any blockchain services. Of course, one could download and install a blockchain platform on some VMs, but you're still going to have to manage it all.

Microsoft Azure exited the blockchain-as-a-service business in September 2021 by retiring their Azure Blockchain Service product. Customers of that service are being directed to ConsenSys, a third party that provides Quorum blockchain-as-a-service on the Azure Cloud.

This doesn't mean that Microsoft Azure is completely turning its back on blockchain, though.

Microsoft has integrated blockchain technology into some new products that are currently in preview. A new ledger feature for the Azure SQL Database is built upon blockchain technology, enhancing record integrity and allowing customers to prove records haven't been tampered with.

Similarly, Microsoft has also introduced Azure Confidential Ledger for the same purpose. Except with Confidential Ledger, your data is stored as objects on your Azure storage account rather than in a SQL database.

Amazon Web Services (AWS) has by far the most comprehensive offering for those looking to get on the blockchain train. If you're looking for a turnkey blockchain option, AWS offers Managed Blockchain. With the click of a few buttons, customers can launch a node on the public Ethereum blockchain network.

Customers can create or join private Hyperledger Fabric networks with just a few clicks as well. These public nodes and private networks are fully managed so you don't have to mess with any of the details – you just pay by the hour.

AWS also offers Amazon Quantum Ledger Database. This is a database geared towards application developers who need to ensure absolute immutable data change tracking. QLDB, as it's called for short, is comprised of two parts, a portion that stores the current state information and an append-only journal that tracks each change to that current state database. As it's really just a database, developers and applications can interact with it using SQL or the API. The blockchain ledger portion is handled behind the scenes.

If you're familiar with other databases, you'll notice that this ledger sounds a lot like transaction logs or journaling. And that's because it's kind of the same thing. The difference is that each entry in that journal is cryptographically bonded to the entry before it and after it. This makes it easy to verify and impossible to alter.

AWS has landed some well-known names who use its blockchain products: Nestle, Sony Music, The BMW Group, and Workday are some of the familiar names that have put AWS’s blockchain products to work.

Additionally, AWS boasts over 70 verified blockchain solutions on its AWS Marketplace and claims to host at least 25% of all nodes on the Ethereum network. But is AWS the only blockchain-as-a-service game in town? Not at all.

IBM Cloud was one of the first significant cloud operators to get into the hosted blockchain game. As a result, it has one of the most mature offerings. IBM hosts blockchains for some mega corporations, such as Walmart, and shipping giant Maersk. Additionally, IBM has and continues to contribute heavily to Hyperledger Fabric, a very popular open-source blockchain framework – and the software behind their branded blockchain offerings.

Then there's Oracle. The Oracle Blockchain Platform is an implementation of Hyperledger Fabric with some extra features built into it to make it work better with the Oracle Cloud. They currently host blockchains in the fashion, transport, healthcare, and financial services industries. Both Oracle and IBM leverage their large enterprise customer relationships to promote their blockchain offerings – it’s just another tool in the toolbox for their customers.

Beyond the big cloud providers, there are dozens of cloud-native startups out there looking to cash in on blockchain through industry-specific solutions or other unique value propositions. Because the use cases for blockchains are usually pretty long range, just be sure to consider carefully who you might partner with.

So that is the current scattered and varied cloud landscape for blockchain. While the public clouds like Azure and SAP Cloud may have stepped back from the blockchain-as-a-service options, others are staying firm and continuing to invest.

According to Gartner's famed Hype Cycle, blockchain-as-a-service is currently drudging through what Gartner calls “the trough of disillusionment.” Meaning, all those elevated expectations are being hashed out, no pun intended.

Want to learn more about blockchain? Continue your blockchain learning at ACG with these courses and videos:

• Blockchain Explained
• Blockchain Essentials
• The Future of Tech: Blockchain
• AWS Service Spotlight: Amazon Managed Blockchain
• Azure This Week: Blockchain’s Role in Azure SQL Database Ledger

And keep being awesome, cloud gurus!