What is Wallet as a Service (WaaS)?
Martin KreitmairChief Executive Officer, Tangany
What is Wallet as a Service and how is it different from Blockchain as a Service?
Blockchain Status Quo
Since the rise of Bitcoin and its distributed ledger technology, known as Blockchain, many more Blockchains have entered the playground. Ethereum is one of the best-known Blockchains for its ability to create smart contracts, which are basically if-then-conditions. Other popular Blockchains are IOTA, EOS, Cardano, Tron, NEO and many more. Due to several different technologies, interoperability between them is nearly non-existing. Hence, some first few signs of progress have been made recently by Bitcoin and Litecoin (who essentially share 99% of the same DNA), which can automatically swap each cryptocurrency for each other.
Taking this fact into consideration, it’s no surprise that the whole market is lacking standardization. Nearly all Blockchains are isolated by each other, using different kinds of smart contracts, tokens and collectibles concepts. Even Ethereum, the market leader, does not yet have a standard programming for collectibles when it comes to Blockchain, which makes it hard and time-consuming to analyze and it may trade different collectibles between apps. It’s same as the Internet before TCP and HTTP became the standard of communication on the Internet. Before that, everything had been a chaos and many websites simply ran in isolated systems, called Intranet. Sounds familiar to the Blockchain Status Quo?
Concept of Wallet as a Service
Wallet as a Service enables businesses and programmers for the first time to make use of Blockchain technology without the need of setting up a node to be connected to the Blockchain or to design solutions to store private keys or to prevent lack of privacy for its users. There are even more challenging issues which need to be addressed before Blockchain can be used.
Let’s assume we, this means you and I, are a business which develops a mobile game app. Like Sim City, our users love to create cities out of dust. They take care of the planning, about the balance between economy, environment and society and love to trade with other players. The number of players is on the rise and we are thinking of releasing a desktop version of the game (wouldn’t it be cool to play the game on mobile and on the desktop?). Can we use Blockchain here? Might this be a great contribution to our game? We can, but we must be Blockchain experts first before we can even think about integrating Blockchain in to our system. We need to find answers to questions like; what are nodes? Why do I need Private Keys? And what’s the matter with this consensus stuff? Most likely we will skip the idea. However, skipping it means we will let go off a great opportunity for both businesses and customers.
We can integrate Blockchain for a fully tokenized economy within our game. Every trade, every creation of goods would represent a value and this value would get valued at the marketplace, run and managed by the players. And we, as the mind who have created the fictional world within our mobile game, would participate by taking a small fee on every trade made. Some cents would be more than enough — probably even just a quarter of a cent (image to get this done with the Euro system: “hey man, for that trade I charge you a small fee of 1/10 cent, got PayPal?”). We can generate more revenue by scaling and, most importantly, by avoiding unnecessary middlemen who normally want their share of the cake too. We will use our own cryptocurrency, which can be set up on Ethereum as an ERC20 token. Well, of course only in case we have once settled with all the challenges before. Remember? Nodes, Consensus, Smart Contracts, and the other stuff.
This is the gap that Wallet as a Services (WaaS) is bridging. To connect the world of existing digital systems (app, websites, software, etc.) with the world of Blockchain by providing easy-to-use solutions. Businesses do not need to be experts in Blockchain to be able to use it (as they are mostly not in Internet technologies like TCP and HTTP to be able to create a simple website). The WaaS is the one which handles all Blockchain related topics and provides a simple interface to bring Blockchain into the game.
Benefits of WaaS
The specific benefits of WaaS are depending on the service which is used. We, at Tangany, believe that the WaaS needs to solve all challenges which are not directly connected with the customer business models. This enables the customer to freely think about Blockchain and it’s possibilities. In the gaming scenario, this would be the tokenization of the game — in other cases, it could be just a digital currency for fast and low-fee transactions, an incentive program for employees based on Blockchain or also the creation of industry-wide solutions like vertical loyalty systems.
Eventually, when the tokenized business model concept is validated and the clear expectations are set, the integration of Blockchain shall begin. Let’s stick to our mobile game to see what this means. First, all users of our game need a crypto wallet to store their assets and value. Second, the system needs to be connected to a Blockchain like Ethereum. And third, someone should handle the safety of Private Keys and the privacy of the user and customer. All these things are managed by Tangany and even more like identity checking of users (known as KYC).
Comparison with Blockchain as a Service (BaaS)
What’s the matter with Blockchain as a Service? Well, you shouldn’t forget that Blockchain is still in its very early years like the Internet in the 1990s. Hence, it misses a clear terminology and standards. BaaS is quite comparable to WaaS, although there are some major differences between these two systems. The following table illustrates the differences between WaaS and BaaS:
As the figure suggests both systems address the same problem: the lack of capability to integrate Blockchain into existing systems. However, Wallet as a Service pays more attention to the integration of public Blockchains into an existing system without any boundaries. On the other hand, Blockchain as a Service tries to bring large enterprises on the Blockchain with a set of features and modules. It also is more likely to be used by companies whose customers are individuals rather than other businesses.
Generally, WaaS also provides a higher grade of independence to the customers and the ability to use Blockchain in a way of standardization with full competence to design it perfectly to enable a smooth integration. BaaS plays its strength when it comes to the needs of large corporates like close consulting services, integration into other cloud services like inventory management systems.
Our mobile game would surely make use of a Wallet as a Service as we would like to be in control of how Blockchain will be integrated and how we want to use it in the future to provide our players the best experience.
Price Comparison WaaS and BaaS
Software as a Service normally charges transparent calculated fees in an abo model. The market of Wallet as a Service is still very heterogeneous and segmented. There is no comparable pricing yet. Tangany for one charges a fair monthly fee depending on the used services. This initiates a free model with no monthly costs up till our premium model.
In the world of Blockchain as a Service, most providers are charging “pay as you use” which means the more resources one uses on the cloud, the more one pays. However, it’s not possible to identify a model either which would allow an easy comparison.
From our point of view, in most scenarios where Blockchain shall be used WaaS is considerably favorable when it comes to the monthly fee. Also, the cost of consultations is lower compared to BaaS which is being offered by businesses like PWC, Ernst & Young, SAP, Oracle, and such.
Blockchain technology is here to stay. The most important thing is to start to deal with it and to evaluate the possible usage and benefit for the own business model. This initial phase of consideration can be accompanied by both WaaS and BaaS businesses. While BaaS might have a greater network of experts and manpower, WaaS on the other side offers solutions which are fully dedicated to the needs of its customers. As soon as the concept is available the integration process begins. If your business is B2C focused, it most likely will obtain the greatest benefits with WaaS. If your business is B2B (or even B2G) you should clearly identify your needs and let pitch booth approaches against each other.
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