The Distributed Ledger Technology (DLT) — or blockchain — remained shrouded under the frenzy around the Bitcoin for a long time. The attempts made to understand and control Bitcoin unveiled the genius of the blockchain technology behind it. Blockchain offers decentralized, secure, transparent, and immutable transactions.
This means that blockchain could potentially disrupt almost every sector in some way. This technology has garnered interest from governments, institutions, start-ups and corporate giants alike.
Here’s a look at how Amazon.com (AMZN) is working with that technology.
There is a rising interest in testing and implementing blockchain networks, however there are a number of hurdles in doing so. Creating a blockchain platform from scratch is time and cost intensive, especially when it is still in the trial-and-test phase. Further, companies are reluctant to commit a huge amount of resources towards those efforts before understanding its efficacy. Some of these challenges are addressed by technology giants through their Blockchain-as-a Service which gives enterprises a chance to get familiarized with the technology.
The term Blockchain as a Service (BaaS), a cloud-based service is inspired by the likes of Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) wherein companies are provided with plug-in, scalable, consumption-based services via cloud. The ‘as-a-Service’ model on cloud comes with a number of advantages such as flexibility, reduced capital expenditure, easy anytime-anywhere access, disaster recovery, and opportunity for smaller enterprises to use infrastructure which cannot be afforded in-house—all for a fixed subscription.
The year 2018 witnessed the leader in cloud computing—Amazon—enter the blockchain domain with its BaaS. In November 2018, Amazon launched a managed blockchain, a fully managed service that makes it easy to create and manage scalable blockchain networks using open source frameworks such as Hyperledger Fabric and Ethereum in just a few clicks. Amazon’s managed blockchain provides a cost-effective way to create the network by eliminating the overheads and provides the benefit of scalability to meet the demands of thousands of applications running millions of transactions.
To enable easy analysis of the network activity outside the network and gain insights into trends, the managed blockchain replicates “an immutable copy of your blockchain network activity into Amazon Quantum Ledger Database (QLDB), a fully managed ledger database.”
This isn’t Amazon’s first foray into blockchain. Back in April, AWS blockchain templates were introduced by Amazon for Ethereum and Hyperledger Fabric. These templates allow its users to focus on building blockchain applications instead of spending time and energy on manual setup of blockchain network.
In May, the technology giant partnered with Kaleido, an offshoot of the blockchain incubator ConsenSys to make it simple for organizations to adopt the decentralized technology for their businesses. In October, QTUM partnered with Amazon Web Services (AWS) to establish Blockchain-as-a-Service through AWS, primarily focused on creating the bases for enterprise-grade solutions.
The interest in blockchain is evident from the service providers in this segment. Microsoft was the pioneer in the field with its BaaS through its cloud computing platform Azure in November 2015. Microsoft was joined by IBM with its enterprise-ready blockchain services on IBM Cloud in March 2017, although IBM had been working on blockchain much before that.
Oracle was next with the launch of its enterprise-grade blockchain cloud service in October 2017. It was soon followed by Hewlett Packard Enterprise (HPE) BaaS solution for enterprises. In June this year, enterprise software giant SAP introduced its cloud platform to facilitate corporates to develop blockchain applications while in July, the integration of some companies with Google’s Cloud Platform (GCP) was announced for developing and running blockchain-based applications.
It is estimated that the business value-add of blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030, per Gartner. While the BaaS market is expected to grow from $623.0 million in 2018 to $15.45 billion by 2023, at a compound annual growth rate of 90.1% during the forecast period. In a recent report, the Bank of America (BOA) estimates the technology could be a $7 billion market, even if 2% of servers one day run on blockchain.
The participation of technology giants into the blockchain space will provide a stimulus to its growth while opening a revenue segment for their respective cloud computing divisions.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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