Azure Blockchain Service’s Impact on Greater Cryptocurrency Adoption
This is a continuation on a series of blog posts focused on why some news and partnerships have the potential to cause a surge in global cryptocurrency adoption. The first piece focused on FDAS, Fidelity’s solution for institutional-grade crypto trading. This piece focuses less on end customers and more on how Microsoft’s Azure Blockchain Service can spur blockchain-based development.
What is Microsoft Azure?
Microsoft Azure is a cloud-based computing platform, which can be used for building, testing, deploying, and managing various applications and services. Since Azure is cloud-based, it means all hardware and data centers are managed through Microsoft. Azure has a tremendous number of services that it’s clients can use, ranging from machine learning to internet-of-things focused offerings.
Microsoft recently released a set of development tools to help clients build Ethereum-based applications on Azure too. This partnership is huge, as it creates an extremely easy way for developers and institutions to have access to a blockchain developer environment. Microsoft has called Azure Blockchain Service. Microsoft released Azure as open source technology, meaning the source code is available for the public.
Why Azure’s Blockchain as a Service is Huge
In an earlier post of this blog series, it was specified that the goal of cryptocurrency is to be adopted at a global scale. For this to happen, big milestones need to be achieved to demonstrate that cryptocurrency can be a robust solution to institutions and the global audience. These milestones need to fulfill three criteria:
- 1 Link cryptocurrency with institutional capital
- 2 Facilitate easier crypto management and investing
- 3 Engage an international user base
The announcement of Microsoft’s Azure Blockchain Service offering does achieve all three of these criteria, but it’s important to realize that the potential behind Azure is targeted at developers than end users. Azure already has a huge number of enterprise clients from all around the world, of which many of these clients use a multitude of different services offered by the platform. Azure Blockchain Service provides a much easier way for developers to create blockchain-specific applications, which has two huge implications for cryptocurrencies.
First, Azure Blockchain Service creates a method to develop Ethereum-based applications that can be easily integrated with existing applications. This gives developers a way to create a fully configured blockchain network in minutes, which can leverage blockchain’s inherent security and Proof of Authority (PoA) consensus models, for example. Given Azure’s global reach, developers all around the world will find it much easier and more accessible to develop applications linked to or built on top of Ethereum’s blockchain technology. Since Azure’s customer base is primarily institutions, it brings institutional developers closer to cryptocurrencies than they ever were before – thus potentially opening the gates for far more blockchain-oriented projects.
Second, having Microsoft’s credibility and resources behind Ethereum greater legitimizes blockchain technology. Microsoft is a technology giant – it’s one of the largest technology companies in the world. The fact that Microsoft poured millions into creating Azure’s Blockchain Service, and then to release it for free to the world, sends a powerful message that blockchain technology is not to be trivialized. Much like how Fidelity launched the first institutional crypto-trading desk, Microsoft’s public backing of blockchain will lead to faster adoption of blockchain technology and will also spur competitors to rethink their strategies.
The Response to Blockchain as a Service
Within the same week Azure Blockchain Service was announced, Microsoft later announced a partnership between J.P. Morgan to create Quorum – the first ledger built on Microsoft’s new service. Quorum gives corporate customers such as Starbucks and Louis Vuitton a way to expand their networks for cheaper, allowing them to shift their focus away from managing infrastructure to developing applications based on business logic. It is clear that Azure’s Blockchain Service is already leading to huge strides being made in institutional adoption of blockchain technology and it is likely going to continue growing momentum.
It’s important to realize that Quorum is just the first round of responses to Azure Blockchain Service. As Microsoft continues to ramp up its offerings through the blockchain service, more firms are going to be enticed to build on it. Competitors will also be pressured to offer an alternative, which will lead to a surge in development infrastructure growth around different blockchain technologies in the future.
Both Microsoft Azure and Ethereum are offerings that are constantly being improved and iterated upon. There is a huge team behind Azure at Microsoft and millions of people interacting with Ethereum-based applications every day. It is likely that alternative services that leverage and interface with other blockchain technology or offerings, such as Stellar or IOTA, could emerge soon.
