Chapter 1. Introduction to the Report

Blockchain has made quite a splash in the world of business. There are great debates taking place these days about how cryptocurrency, a tokenized monetary system built on blockchain, will impact everyday banking and finance. Meanwhile, blockchain—a distributed ledger technology (DLT) that underlies cryptocurrency—can be applied in many other ways to solve problems that have plagued organizations for years. To spur organizational adoption of blockchain, a great many technology providers and leading businesses have begun offering cloud-based Blockchain-as-a-Service (BaaS).

BaaS is now possible thanks to the cloud and web application programming interfaces (APIs). Authorized developers can now integrate most systems without even being able to see or modify the source code for—or even knowing what programming language was used for—the systems being connected.

Now, cloud providers are offering cutting-edge, highly complex services like artificial intelligence (AI) and blockchain. The first example I saw of one such AI API was at South by Southwest, the music/film/technology event held in my current hometown of Austin, Texas. IBM was demonstrating a robot that I could direct with my mind (yes, really!) simply by wearing a computer/brain interface on my head and training the robot, starting by thinking the words “forward,” “backward,” and “stop.” I was amazed, and asked the IBM rep, “How did you do this?” They answered, “A few lines of JavaScript.”

As a longtime web developer, I was immediately sold on writing applications that called on these cloud-based APIs to do amazing things. My company, Kilroy Blockchain, went on to become the North America regional winner of the IBM Watson Build 2017 Challenge. We built a smartphone app, Riley, to support people who are blind and visually impaired with audio descriptions of what is around them via Watson’s descriptive abilities. This idea was inspired by the pupils of the Texas School for the Blind and Visually Impaired, with whom I work as a volunteer dragon boat coach. Because of the rapid application development capability available to us via the IBM Cloud, a small team was able to bring Riley to production within four months.

Discovery of IBM’s AI cloud offerings also led me to IBM Blockchain, which was in beta when I learned about it. Because it is a Platform-as-a-Service (PaaS), it resides in the IBM Cloud. BaaS systems, like the IBM Blockchain Platform, are base blockchain platforms that are bundled with other critical services. A BaaS system can include hosting, node distribution, identity management, and other functionality not found in base blockchain offerings. IBM’s BaaS is built upon such a free, open source offering—Hyperledger Fabric. Most of the BaaS offerings available today are based upon a core technology, then enhanced.

My own company offers Kilroy Blockchain Platform-as-a-Service, which is a middle-tier service for integrating external applications with blockchain. Our other blockchain product, Carnak, is a blockchain-based navigation system for automated vehicles. Carnak is being developed with help from the Mobility program of the Austin Technology Incubator (ATI), which is affiliated with the University of Texas.

About This Report

The world of BaaS is still in its infancy and evolving. Exactly what goes into making a BaaS is still being debated, and the standards are just starting to be defined. This report is intended to help technical business leaders, solutions architects, and innovation officers evaluate options for BaaS, understand the landscape of BaaS offerings, get a project started, and learn where the technology is going.

In order to provide the most valuable insights possible, I interviewed a number of enterprise blockchain experts and practitioners. I quote their experience-based insights throughout the report.

Feel free to read the chapters in order, or to jump straight to the sections you need:

  • In Chapter 2, we define blockchain technology and help you sort out whether or not you need blockchain. We’ll also explore what’s under the hood as well as how blockchain for business differs from cryptocurrency.

  • In Chapter 3 we dive into the nuts and bolts of a blockchain network, including definitions of participants, assets, transactions, and smart contracts. We’ll discuss how to architect the layers of the application and how to find the right development team.

  • In Chapter 4, we’ll learn about special features of BaaS, how a typical BaaS application might be architected as both a standalone multiuser application and integrated with other systems via APIs, and under what circumstances you might want to build your own BaaS.

  • In Chapter 5, we talk about the current BaaS offerings and give you some tips on choosing the one that is right for you.

  • In Chapter 6, we look at five industry-changing use cases for BaaS.

  • In Chapter 7, the final chapter, you’ll be walked through the BaaS systems available today versus the BaaS likely to be available in the future, as well as next steps you can take to continue toward a successful outcome.

If you are short on time and want to start with planning your use case, you should begin with Chapter 3, then review the use cases in Chapter 6 and find the ones most similar to your own project. This will give you ideas as to architecture and workflow. Chapter 5 can be a quick reference for which BaaS to choose, based on the feature sets that most closely match your own business network.

Regardless of how you utilize this report, make sure that you have a thorough understanding of the business requirements for your own use case before committing to a particular technology stack. To get the best results, dedicate substantial time up front to documenting your requirements as completely as possible so you can easily share them with your business network, partners, and advisors.

Also, using the common terminology explained in Chapter 3—specifically, participants, assets, transactions, and smart contracts—will help you better communicate your requirements to programmers and BaaS suppliers.

Acknowledgments

I’d like to thank the following people who made this report possible: Lynn Riley, Deepak Bhatta and the team at Kilroy Blockchain, Todd Little and Carolin Bachmann of Oracle, Paige Krieger of IBM, Pete Harris of Austin Blockchain Collective, Emma Aitken of the Australian Consulate, Rob Hanson of Australia’s Data61, Keith Guidry of Sawblade Ventures, Saleem Khan and Cari Zoch of Dun & Bradstreet, Reshma Moorthy of Frontier Technologies, Mark Sanders and Richard Amato of Austin Technology Institute, and last but certainly not least, Michelle Smith, Nicole Taché, and the team at O’Reilly Media.

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