Microsoft Introduced New Blockchain Product
Main page News, Microsoft, Ethereum, Blockchain

Computer giant Microsoft introduced a new "blockchain-as-a-service" (BaaS) product, which allows companies to use a flexible version of Ethereum, modified specifically for their business needs.

Ethereum on Azure allows companies to create applications based on the Ethereum blockchain network, which does not use the Proof-of-Work (PoW) consensus algorithm and, therefore, does not require mining. These functions are better suited for networks where participants are not inclined to trust each other. Instead, Ethereum on Azure uses a Proof-of-Authority.

What is BaaS?

It’s a solution that allows any user to create their own applications and smart contracts, manage and use them through cloud services. In this case, all necessary operations to maintain functionality and flexibility of the blockchain are performed by the provider, which supports the use of the system via (PoA) algorithm.

BaaS is a lease of blockchain to users for implementation of their projects. The client does not become the owner of the blockchain, but simply get the right to use it. BaaS operates similarly to the concept of SaaS (software as a service). The most known and widespread SaaS system can be considered e-mail, for example, Gmail.

What are PoW and PoA?

Proof-of-Work (PoW) is the most well-known method of confirming transactions. To confirm transactions nodes of the network do quite complex computing work and calculate algorithms. The result of their work can be easily and quickly verified by other nodes in the network.

The first node, which has fully completed all necessary calculations, receives a reward from the blockchain network. All nodes are competing with each other to be the first node to be rewarded, thus increasing the capacity of computing resources.

Proof-of-Authority (PoA) is a consensus algorithm that checks transactions with a certain number of nodes acting as system administrators. These nodes have the authority that allows them to establish truth of transactions for other nodes. PoA has high bandwidth and is optimized for closed networks. You are unlikely to see PoA running on a public network, because of its centralized nature.

What does Microsoft offer?

Network management can be separated from its actual functioning, since all participants of the corporate blockchain-network are known and trustworthy, explained the software developer Cody Born from Azure Global.

PoA product is also equipped with a built-in decentralized application called Governance DApp, which gives members of the consortium powers to manage the network and delegate its voice to others. Network members can delegate voting from their own person to other nodes, if the main nodes are not on the network. This ensures that all members will constantly participate in the process of securing consensus.

Users with administrators authority can also vote and individually change management structure within the network. At the same time, all changes are fixed so that transparency conditions are respected.


1. Azure protocol greatly simplifies the installation procedure of the blockchain. Network can be adjusted in a few minutes. Such a system provides the company with a blockchain-based solution, which is installed in one click.

2. Microsoft added an ability to create smart contracts using the Parity WebAssembly (Wasm) toolset to increase the ease of use of its product. It allows developers to write smart contracts in familiar programming languages like C, C ++ and Rust, without having to learn Solidity, the main programming language for Ethereum.

Read also:
Please describe the error