A Guide: Ardor and Blockchain as a Service (BaaS)

Ardor is officially adding blockchain to the service-based concept. Dovetailing on the whole Software-as-a-Service (SaaS) model, we now have Blockchain-as-a-Service (BaaS) solutions.

You might be wondering how blockchain technology fits into the whole model, and how businesses can offer blockchain on a service level. In this article, we’re going to look at how Ardorchain has developed a way to provide blockchain services so anyone can leverage their blockchain network.

Introduction to Ardor

Ardor is one blockchain project among various others vying to become BaaS providers. So what exactly is a BaaS provider? Well, in the case of Ardor, they provide the blockchain infrastructure that third-parties are able to build on. This way, enterprises don’t have to invest in developing a custom blockchain solution. Instead, they simply leverage the BaaS, or in this case, Ardor.

Ardorchain represents the entire blockchain network, which uses a unique system of parent and child chains to allow for an easy-to-integrate blockchain infrastructure. Ardor coins, called ARDR, are used for transactional fees on the Ardorchain network.

The developers behind the Ardorchain project are the same group that developed and launched the NXT platform, an open source project intended to standardize access to blockchain technology.

Before going further into Ardorchain, it’s important to understand the NXT platform to get the bigger picture and see the pain points Ardorchain solves.

NXT Evolution: Ardorchain

 

Ardor is often dubbed “NXT 2.0” because it directly pulls much of its core programming from NXT. Back in 2013, NXT was actually one of the first Initial Coin Offerings (ICOs) to launch a cryptocurrency. It was also one of the first projects to write the code for a new blockchain from the ground up, without taking any code from Bitcoin. NXT is an open source platform written in Java.

One key attribute for NXT is their platform was the first to implement the Proof-of-Stake (PoS) model, rather than the Proof-of-Work (PoW) model traditionally used by Bitcoin.

In the old PoW system, miners are required to calculate an intensive computation, and the reward is given to the first miner who solves the computation and gets the answer. Miners in the network compete to be the first to get the answer.

The PoS system changed the mining structure. Instead of block rewards, miners are paid in transactional fees. Each new block creator is determined based on the stake of each miner, the more coins you hold the more likely you get to mine the block.

The goal behind NXT was to experiment with allowing companies to implement their own blockchain solutions using the NXT APIs. The value of using the NXT platform is ease-of-use for entities to develop new blockchains, create new tokens, and use them immediately.

However, there were a couple primary issues with the NXT platform:

Native Tokens

Basically, you have to own NXT tokens to interact with the network. All transactional fees are paid with NXT. So even if you’ve developed your own blockchain and created your own token, you still need NXT to pay transactional fees to miners.

Scalability

The NXT platform is expected to run into scalability issues as the blockchain grows in size. Miners need to download the entire history of transactions on the blockchain, which perpetually grows as transactions and blocks are added to the chain. This could create a high barrier to entry for miners and unsustainable long-term.

How Does Ardor Solve These Problems?

Those key issues threatening NXT are where Ardor comes into the picture. Ardorchain boasts all of the same features as NXT, but changes the architecture a bit on how new blockchains get implemented into the network. Ardorchain leverages parent and child nodes to separate the security and functionality of the blockchain.

The parent chain is the single blockchain responsible for network security and decentralization of the entire system. In essence, the parent chain is simply a bare-bones blockchain built to focus on speed and security.

The ability to add child chains on top of the parent chain is the root of the blockchain service Ardor provides. There can be multiple child chains built using the parent chain infrastructure. The various child chains are responsible for operational transactions like creating token assets, submitting votes or sending messages.

The value of the Ardor child chain solution is getting your very own out-of-the-box blockchain application for various business use cases. Child chains on Ardorchain still maintain the same functionality and custom features supported on the NXT platform. They are linked to the main chain, or parent chain and rely on it for security and decentralization as the parent chain still verifies the network’s block transactions.

Ardor deals with the native token issue through a process called ‘bundling.’ This bundling process is how transactions from child chains are reported to the parent chain. Bundlers in the network package together multiple transactions from various child chains into a single ChildChainBlock transaction, then add that to the parent chain. Bundlers pay fees to the parent chain using Ardor coins, ARDR. Bundlers get paid their fees from the child chains in their child chain native token.

Ardor also addresses the scalability problems by implementing a new transactional pruning system. When the blockchain becomes too large and cumbersome, it won’t be necessary for every node to download an entire version of the blockchain ledger. Instead, only the relevant and recent transactions are required to maintain the network. When validation of older entries in needed, archival nodes will be called upon to support those transactions.

BaaS Solutions

The vision for Ardorchain as a blockchain-as-a-service is that child chains would be used by other organizations to create all types of applications: equity trading platforms, digital file transfer services, private enterprise blockchain applications, etc.

BaaS provides a model that alleviates the burdens of single token dependency and cumbersome blockchain ledgers. On a structural level, an enterprise that needs to run their own blockchain can use BaaS solutions and basically outsource the maintenance of the network servers and overall system security.

Instead, organizations can focus on building on top of the existing blockchain infrastructure, leveraging the core development team to customize features depending on specific business needs and applications. For example, if an organization is using BaaS for private internal use, they could choose to serve as the single transaction bundler for the child chain, ensure transaction costs are covered and include all transactions on the parent chain.

The benefit of emerging BaaS solutions is the ability for enterprises to use secure, convenient, and functional blockchain solutions with support available from the core development team. Soon, the child chain creation process will be automated, making it a true plug-and-play blockchain scalability solution.

Final Thoughts

As servitization business models have grown in popularity with infrastructure-as-a-service to software-as-a-service, it’s only natural that we see the same model emerging with blockchain applications. The overall service model could shake up how blockchain is used within enterprise and business applications.

Ardorchain is a prime example of a project trying to make this model viable and gain enterprise adoption. The out-of-the-box functionality, partnered with the customization capabilities, makes Ardorchain an interesting development among BaaS solutions.

The project’s success will likely depend heavily on the initial adoption rate for early applications, and if the development team can realize substantial traction with real-world use cases. However, Ardorchain’s poses several strengths with the rapid setup time and tailored approach to child chains, enabling businesses to incorporate blockchain technology without needing resources for a custom development.