Blockchain Infrastructure as a Service: Deep Dive & Provider Comparison

Blockchain is complex technology, but its promise and recent rise in popularity in the past few years has left many wanting to use blockchain technology within the structure of their own business. There’s just one catch, in order to communicate with the blockchain, you need to have access to a node, and it’s complicated, time consuming, and expensive to configure and operate nodes for most companies. To learn more, watch our 6 minute explainer or navigate through the table of contents for a deep dive.

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What is a Blockchain Node?

Nodes can be any kind of device like a laptop, computer or even bigger servers, and they contain a full copy of the transaction history of the blockchain. For example, miners always need to run a full node in order to form new blocks.

Node structure: Computers/servers that are all connected to each other

But with the technical expertise and hardware required to run and maintain a node, many companies would have to take the focus off of their core functions in order to just set up and operate the node they would need to be able to connect to the blockchain.

This is why many companies that want to adopt this technology choose to outsource this process, and blockchain infrastructure as a service (IaaS) providers are helping to fill in the gaps.

What is Blockchain Infrastructure?

The main components that make up the infrastructure of a proof-of-stake blockchain are nodes, clients, node-supporting infrastructure, and security infrastructure.

Nodes

A node is the core component to proof-of-stake blockchain infrastructure, and they are computers that carry out the essential functions of the network. These functions include validating transactions, submitting votes on network governance, and storing records of the blockchain.

There are different types of nodes that each have a specific function that they are optimized for.

Clients

Clients are the software implementations that dictate how the essential functions of the network are carried out. Depending on the design, a decentralized network can support multiple clients, and clients can be built to leverage a variety of programming languages, such as Solidity, or the Move language by Facebook, by running virtual machines.

There are also light clients, also known as lightweight nodes, which are not full nodes, but reference a trusted full node’s copy of the blockchain. They allow users to interact with the blockchain, and make and confirm transactions without needing the memory required to run a full node. Most mobile wallets are light clients, but you can also download light clients for computers as well.

Node-supporting Infrastructure

In order for nodes to work properly and efficiently, there is supporting infrastructure to help nodes carry out their functions. To improve the responsiveness of nodes, load balancers distribute traffic across multiple servers. Should a system go out of commission, failover protection ensures that a node does not experience extended downtime. There are also monitoring and alerting services that ensure nodes are healthy and participating optimally in the network.

Container services enable mass actions within all of this node-supporting infrastructure and allow applications and their packages to be pulled together into a form that can be version controlled. Containers are an executable unit of software in which application code is packaged in common ways so that it can be run anywhere. This allows applications to be built within a microservice architecture so that services can be updated or bugs can be patched independently without redeploying the entire application or if one service goes down, the entire application doesn’t go with it.

Security Infrastructure

Another important aspect of blockchain infrastructure is the security infrastructure, which includes key management, networking firewalls, and other security considerations. One of the biggest aspects of blockchain is crypto, which you need private keys to access. Private key management and security is very important since it’s your money at stake. An example of blockchain security infrastructure is hardware and software created to help manage and keep your private keys safe, like a hardware security module (HSM), which is a device that safeguards your private keys by encrypting them.

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What Is Blockchain Infrastructure as a Service?

Blockchain infrastructure as a service are cloud-based blockchain services that establish direct access to computers and servers that serve as nodes to customers, all while the provider maintains the infrastructure and the tasks and functions required by said infrastructure.

When you participate in a proof-of-stake blockchain, you need significant time, resources, technical expertise, reliable and scalable hardware, updated software, and a stable internet connection so you can communicate with and participate in the blockchain network. IaaS providers give their clients the opportunity to have a full-use blockchain and operate blockchain applications without having to build and maintain their own node.

Let’s say you want to build a decentralized app (Dapp) on the Ethereum blockchain. In order to do this, you would need access to an Ethereum node. Because Ethereum is a well-established and popular blockchain, there is already a wealth of infrastructure solutions available. So you wouldn’t need to operate and maintain your own node, most services that run on Ethereum don’t.

Instead, with the help of the Infura API Suite, you have instant access via HTTPS and WebSockets to rapidly build, test, and deploy your Dapp on Ethereum. Infura owns and operates Ethereum nodes, and provides developers with web APIs, effectively outsourcing node operation and management, and removing a major hurdle to blockchain adoption.

How Does Blockchain Infrastructure as a Service Work?

It’s pretty simple, the client pays the IaaS provider and in return, the IaaS provider operates and maintains the node and node-related infrastructure for the client. Normally, you’d have to build and maintain the hardware and code bases that nodes require, but with blockchain infrastructure as a service, the provider does that for you.

We mentioned Infura earlier, but Infura is only an example of a node provider for the Ethereum blockchain. There are plenty of other blockchains out there and whichever one you choose to build your Dapp on, you’ll need access to a node from that specific blockchain, which you can gain from an IaaS provider.

Many providers have their own tokens which can be bought on exchanges and then used to access their nodes and infrastructure. Not all providers specialize in one chain either, some node operators focus on deploying nodes across many different protocols, so if you desire access to multiple blockchain protocols, a provider exists for you that can do that.

The Pros and Cons of Using Blockchain IaaS

As with almost anything, there are pros and cons to using a blockchain infrastructure as a service provider, so let’s take a look at some of them.

Pros:

Save Time and Money

Like we mentioned earlier in the article, creating and maintaining your own blockchain node can be costly and time consuming. By hiring a blockchain IaaS provider, you save money and time on finding and hiring blockchain developers to configure the node as well as maintain it. You can use that time and money saved on your back-end to focus on your front-end development and leave the running of the node to the seasoned professionals.

Customizable

If you need scalability, there is a company that specializes in that. If you want to be able to connect to multiple blockchains, there is a company that specializes in that. There are many blockchain IaaS providers out there now, so you can choose the one that suits your project’s needs the best.

No need for blockchain knowledge

We get it, blockchain technology is not your area of expertise, but you still want to be a part of its adoption. IaaS providers give you that opportunity with absolutely zero need to know how to do it because they do it for you. You can keep your blockchain knowledge to a strictly need-to-know basis and let the provider handle the rest.

Cons

Lack of Control

Say there is network downtime and your nodes aren’t running. Customers will likely contact you first about any technical issues. But since you’ve outsourced the technical know-how, you have no way of resolving the issue as a company. Any technical issues that arise you’ll have to contact the IaaS provider in order to get the issue resolved. This can lead to longer wait times until the issue is fixed and if it happens often, it can reflect poorly on your business.

Centralization

By using a blockchain infrastructure as a service, you are centralizing the infrastructure aspect of your product. This isn’t necessarily a bad thing and is sometimes unavoidable. There are also node providers that offer solutions to centralization that make their infrastructure offering more decentralized, you just have to choose what is important to your project.

As you can see, blockchain infrastructure as a service allows you to save time and precious resources and use them to further your core business areas, all while adopting blockchain technology. That being said, the cons can be mitigated by carefully selecting the infrastructure as a service provider.

How to Choose A Blockchain IaaS Provider

Ultimately, your project’s needs will determine which provider you should choose, but let’s take a look at some of the things you should consider when selecting a nodes as a service provider.

Smart Contract Abilities

Does your project plan to use smart contracts? If so, you’ll need to choose a node provider that connects to a blockchain that has smart contract abilities.

Serviced Blockchains

Which blockchain do you plan to use as the base for your project? Do you need smart contract abilities? Do you want the ability to build on several different protocols? These matter greatly when choosing a provider as some service multiple blockchains, and some only service one.

Scalability

IaaS providers should be scalable in that they need to be able to meet the demanding increase in the number of nodes when your business expands. Also, they need to be able to handle the node as the size of the blockchain increases.

Pricing

Different providers have different pricing options, and many even offer free tiers. Make sure to check out different providers for their prices to figure out which one would be most cost effective for your project.

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Which Blockchain Iaas Provider Should I Choose?

Again, you can choose a provider based on your specific needs, and there are plenty of providers out there so we recommend doing your own research. But to get your started, here are some popular node providers and some of the things that make them unique.

Amazon Managed Blockchain

Amazon Managed Blockchain allows you to join public networks or create and manage private scalable networks using the popular open-source frameworks Hyperledger Fabric and Ethereum. It automatically scales to meet the need of thousands of applications running millions of transactions and you can easily add peer nodes using the Managed Blockchain’s API.

BlockDaemon

BlockDaemon supports more than 30 blockchain networks with an easy-to-use, secure, and scalable node management platform. Their nodes are fault-tolerant and high-traffic, ensuring a node failure does not take the network down. They price on a per node basis.

Chainstack

Chainstack offers node access to multiple blockchain protocols like Ethereum, Polygon, Corda Network, Bitcoin, Binanace Smart Chain, Hyperledger Fabric, and MultiChain. They have paid options, but they also allow you to get started for free. They offer enterprise grade security, allow you to invite other members to deploy their own infrastructure, and allow you to deploy network infrastructure on several cloud service platforms.

Infura

As mentioned earlier, Infura owns and operates Ethereum nodes and their APIs enable instant access to the Ethereum network. Infura offers a free tier, as well as more expensive tiers for bigger projects or those looking to expand.

Pinknode

Pinknode has been called the Infura for Polkadot. Polkadot is a relatively new and expanding blockchain ecosystem that consists of multiple parachains interconnected by the Relay Chain to increase security and scalability. Pinknode puts it’s sole focus on the Polkadot ecosystem, providing developers with secure, reliable and scalable web API access to the Polkadot Relay Chain and its parachains. With its token model, they plan to introduce node ownership to retail holders and have a long term goal to decentralize the node network.

Comparison of popular Blockchain Infrastructure providers

How Does Pontem Work With Infrastructure as a Service Providers?

Pontem Network is a Dapp framework built on Polkadot that allows crypto projects to test their ideas and market fit in the Polkadot ecosystem, before migrating to the Facebook backed permissioned Diem Blockchain once it becomes available. It is a scalable bridge for public blockchains like Ethereum and Bitcoin through the Polkadot internet of blockchains Parachain shards model. With the help of blockchain infrastructure as a service providers like Pinknode, Pontem Network allows developers to build, test, and deploy decentralized applications before porting to the Diem Blockchain. Using node access through IaaS partners like Pinknode, Pontem is helping bridge the gap between crypto and Facebook’s 3.1 billion users.

In conclusion, blockchain infrastructure as a service is an important key to speeding up the adoption of blockchain technology. It’s through these node providers that dApp developers can gain access to blockchain ecosystems to test and run their dApps. Without this node support, there is a high barrier to blockchain development

With the support of Pinknode providing Polkadot node infrastructure, developers on building for the Diem Blockchain will be able to connect to the Polkadot network with just a few clicks. Pontem is the much needed middleware that will connect public blockchains to Facebook’s Diem blockchain, and through provided infrastructure from companies like Pinknode, faster and scalable dApp development is achieved.

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  1. Blockchain fees. Most NFTs are issued on the Ethereum blockchain, where you have to pay for gas. NFT minting involves a complex smart contract and thus requires a lot more gas than simply sending crypto. Plus, the gas has been very expensive in the past few months, so you can expect to pay at least $50–100 in gas fees per NFT collection.
  2. Marketplace fees. While you can issue an NFT on your own, it will be hard to promote it and find buyers. That’s why most creators work with NFT marketplaces like OpenSea and Rarible. And while minting NFTs on OpenSea is technically gasless and free, there is a gas fee to initialize a seller account and accept a bid from a buyer — expect to pay around $150 in total. On Rarible, the costs can exceed $600.
  • Facebook has almost 3 billion monthly active users, giving Diem the largest potential audience of any blockchain project on earth;
  • The stablecoin will probably get integrated into transactions on Facebook, Instagram, Messenger, and Whatsapp (shopping, paying for ads, sending money to friends etc.);
  • Facebook can afford to hire the best developers and marketers, so the execution and promotion will be top-notch;
  • Diem’s programming language, Move, is safe, flexible, and well-suited for writing smart contracts;
  • It should be possible to add third-party dApps to the Diem ecosystem — think of WeChat with its thousands of mini programs, but on blockchain.

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