The distributed ledger technology (DLT) of blockchain has been gaining popularity with each passing day. This is because Blockchain's decentralized and digital nature makes it tamper-proof and highly secure. Due to these properties, blockchain is being adopted by various industries for a variety of applications such as payments, supply chain management, identity management, etc.
However, one of the biggest challenges enterprises face while implementing blockchain is the consensus mechanism. Achieving consensus in a decentralized network is not an easy task. There are various consensus algorithms available, but each has pros and cons.
What is blockchain consensus?
Similar to a traditional centralized database, blockchain consensus is an algorithm that simplifies the decentralized record-keeping process. In other words, it is a set of rules that every node or participant in the network must follow to maintain the integrity of the distributed ledger.
The critical feature of blockchain that sets it apart from other DLT is decentralization. There is no central authority in charge of the network. So, it is essential to have a consensus mechanism in place to ensure that all the nodes agree on the ledger's state. Without consensus, it would be challenging to maintain the trust and integrity of the network. Different blockchain protocols work on other consensus mechanisms.
Proof of work (PoW), proof of stake (PoP), and Byzantine fault tolerance (BFT) are some of the most popular consensus mechanisms used by blockchain protocols. However, a new consensus mechanism is gaining popularity among enterprises, especially in the enterprise blockchain space. It is called consensus-as-a-service (CaaS). In this article, we will take a deep dive into the world of CaaS and understand how it works.
What is consensus-as-a-service (CaaS)?
Consensus-as-a-service is a cloud-based service that enables enterprises to deploy and manage blockchain consensus mechanisms. It is a managed service that takes away the hassle of setting up and maintaining a consensus mechanism from scratch. CaaS providers offer various services such as protocol selection, deployment, monitoring, and maintenance. Some popular CaaS providers are Kaleido, MultiChain, Blockdaemon, etc.
Why is consensus as a service needed?
Enterprises are now turning to blockchain to build next-generation applications. However, setting up and maintaining a consensus mechanism is very complex and time-consuming. Moreover, it requires a lot of technical expertise. It is where CaaS comes into the picture. It simplifies the process of setting up and managing a consensus mechanism.
CaaS providers offer various services that help enterprises focus on their core business rather than worry about the technical aspects of setting up and maintaining a blockchain network. As the concept of Web 3.0 is emerging, CaaS is expected to play a significant role in the growth of enterprise blockchain applications.
In addition, for achieving decentralized consensus, many nodes are required. Therefore, it can be a costly affair for enterprises. However, CaaS providers have the infrastructure and resources to support many nodes. This aspect makes it possible for enterprises to deploy blockchain applications at a lower cost.
How does consensus as a service work?
CaaS providers offer a platform or framework that helps enterprises deploy and manage blockchain consensus mechanisms. The platform abstracts away the complexity of setting up and maintaining a consensus mechanism. It also provides various tools and services that help enterprises monitor and troubleshoot their blockchain networks.
The first step in setting up a blockchain network is to select a protocol. Many protocols are available, such as Hyperledger Fabric, Ethereum, Corda, etc. Each protocol has its own set of features and benefits. Therefore, enterprises need to select a protocol that best suits their needs.
Once the protocol is selected, the next step is to deploy it. This process involves setting up the required infrastructure and configuring the network. CaaS providers offer a variety of tools and services that help enterprises deploy their blockchain networks quickly and easily.
After the blockchain network is up and running, it is essential to monitor it regularly to ensure it is functioning correctly. CaaS providers offer a variety of tools and services that help enterprises monitor their blockchain networks.
It is essential to maintain the blockchain network to ensure its smooth functioning regularly. CaaS providers offer various services that help enterprises maintain their blockchain networks.
How does a CaaS model work?
The architecture of a consensus model can vary depending on the type of consensus mechanism used. For example, in a Proof-of-Work (PoW) model, miners need to solve complex mathematical problems to validate transactions. On the other hand, in a Proof-of-Stake (PoS) based model, stakeholders need to stake their tokens to validate transactions.
For better understanding, let's take the example of the Hedera Consensus Service. They offer verifiable event ordering and timestamping as a service. Hedera's platform is based on the Hashgraph consensus algorithm. This algorithm is faster, more secure, and fairer than traditional consensus algorithms such as Proof-of-Work and Proof-of-Stake.
Hedera's platform is designed to provide high security, scalability, and fairness. It uses virtual voting to ensure that all transactions are ordered correctly. In addition, it ensures that the network is secure from Double-Spending attacks. Moreover, Hedera's platform is scalable and can support up to 10 million transactions per second.
Benefits of consensus-as-a-service?
There are many benefits of using a CaaS model. Some of the benefits are mentioned below:
- It helps enterprises focus on their core business rather than worry about the technical aspects of setting up and maintaining a blockchain network.
- CaaS providers have the infrastructure and resources to support many nodes. This makes it possible for enterprises to deploy blockchain applications at a lower cost.
- CaaS platforms offer various services that help enterprises deploy, monitor, and maintain their blockchain networks.
- The architecture of a consensus model can vary depending on the type of consensus mechanism used.
How Can Seven Bits Help Your Business?
Seven Bits is a leading blockchain development company that offers bespoke enterprise solutions. We have a team of expert developers who have experience developing and deploying blockchain applications. In addition, we offer a variety of services that help enterprises deploy and manage their blockchain networks.
With 8+ public and private blockchain frameworks, we offer end-to-end development services for your business. Our experts can help you select a suitable protocol and deploy it quickly and easily. We also provide various tools and services that help you monitor and maintain your blockchain network. Our Blockchain Center of Excellence (CoE) team can take care of your every business requirement. We've got you covered by integrating CaaS service, performing legacy migration, or smart contract development. Get in touch with us at firstname.lastname@example.org to discuss your project today.