Alibaba Cloud BaaS — Part I: What is Blockchain?

What Is Blockchain?

The blockchain that we know today is an invention by a person, or a group of people, known by the name or pseudonym Satoshi Nakamoto. Since its inception, it has constantly been evolving, potentially into something great. Blockchain has revolutionized the world by introducing the core principle of the distributing digital information but not to be copying. Although the main idea of the blockchain is for digital currency, but there have been numerous use cases for blockchain, such as for healthcare and IoT.

Blockchain for Businesses

Before we talk about how exactly the blockchain works, let’s see whether it is essential for businesses to adopt it or not.

  • Public blockchain: A public network where anyone can join and be part of the network.
  • Permission blockchain: A private network where the existing participants should before making when you want to be the part of the network.
  • Is there any need for the company or product to have an audit trail to make sure everything is in place?
  • Are you dependent on third-party services for all the operations?
  • Are those that third-party services are charging a lot for the number of transactions?

Considerations for Blockchain


Reasons that Enterprises is much more interested in blockchain is that it will be able to reduce a lot of operational costs because of blockchain integration. Big financial institutions like banks run on mainframes. Mainframes are known for their tremendous processing power and practically zero downtime. Instead of removing the entire mentioned systems, we can reuse the existing systems for running the blockchain technology. There is a fitment analysis which is yet to be done to check whether mainframe-centric blockchain is going to be extremely cost effective or not. However, we are sure that mainframes solve the problem of blockchain scalability.

Power Consumption

If you are an IT administrator, you might not think about this as a priority but if you want to implement blockchain. But remember, this takes up a lot of power (electricity). Blockchain requires a lot of computation and power resources, so implementing a blockchain may increase electrical costs.


Let’s not allow the term “distributed” fool you in terms of storage. Blockchain database is ever growing, and it becomes massive overtime. Every participant in the blockchain network maintain a copy of the entire data and synchronize regularly. It’s ok in the beginning, but over time the cost increases exponentially.

Deep Dive into Blockchain

Blockchain provides a fully automated and safe way of passing information from one user to another. One user creates a transaction that initiates the process of creating a block. Different participants verify this blog (were usually in millions of nodes distributed across the network). Once verified, this is added to the chain which is stored in the network, creating a unique record with a unique history.


There are several projects which are created to simplify the implementation of blockchain. One of the popular options in that project is the Hyperledger. Remember Hyperledger is not a company/blockchain/IBM Blockchain Coin. It is like a common place for industrial blockchain development. This is what Hyperledger is according to their website

Cloud and Blockchain

Cloud has revolutionized the infrastructure using the infrastructure as a service model. It is nothing but renting a server whenever it is needed. Operating blockchain on the cloud is a great combination as we know that blockchain requires a lot of storage and computing power as we go ahead. Renting blockchain infrastructure in the form of blockchain as a service helsp organization to reduce the IT spending for operation for maintaining the blockchain this will also reduce the current investment need to get started with a blockchain in your product. This paves the way for the industries to test the blockchain without any upfront commitment within the product to see what exactly the market need.



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