Microsoft ending Blockchain Service:: Why?

Azure Blockchain as a Service

Nearly 6 years after the launch, Microsoft is stopping its Azure Blockchain As A Service (BaaS). The service portal says

Azure Blockchain service will be retired on September 10, 2021. During this retirement period, no new member creation is supported. Please refer (to) the announcement for more details.

The announcement does not provide any reason for retirement.

Is this the beginning of the end of the blockchain?

Blockchain is a distributed ledger technology. It is a decentralized public ledger, where the contents of the ledge are stored in the form of blocks. The blocks are secured with the cryptographic algorithm so that no one can tamper a block.

Cryptocurrency is one of the use-cases of blockchain technology. The other use cases are contract execution, document origin tracking, resource sharing and supply chain management, etc.

One of the interesting coincidences is that on the same day Tesla announced they would not accept Bitcoin cryptocurrency, Microsoft announced the retirement of Blockchain service on the Azure platform.

And as a side note, a tweet by Elon Must caused Bitcoin to plunge 17% on a single day

Yes, this is a sheer coincidence, as cryptocurrency is not the only use case of Blockchain.

Now, why did Microsoft announced the retirement of Blockchain, while many of the market researchers since way back in 2016 shouting a market size of few tens to few hundreds of billion USD?

These can be few reasons:

Blockchain for enterprise applications is not the same as blockchain for cryptocurrency. In the case of cryptocurrency, blockchain holds information on how much cryptocurrency is owned by a person. It does not tell us if the currency itself is authentic. Because currency is mined and added into the Blockchain, the currency’s authenticity is not important. Just the transactions on the currency are important.

On the other hand, let us take the case of a document (say identity proof of a person) stored in the Blockchain. How can we make sure the document itself is authentic, while it is stored in the Blockchain. Any further modification to the document inside the Blockchain is tamper-proof, but one can not ascertain the authenticity of the original document. The same arguments can be extended to agreements, contracts, supply chain transactions.

While technologists showed many enterprise use cases of Blockchain, some of these were not practical. The multi-organization contracts in Blockchain needed consortiums to define operational rules. Enterprises were never able to converge into these consortiums. Also, enterprises did not feel the real necessity to move the supply chain into Blockchain. There was no strong incentive associated with moving the supply chain to Blockchain

While Microsoft did not give any strong reason for retiring Azure Blockchain, the obvious reason could be a lack of business growth and traction. Does this mean the beginning of the end of the Blockchain?

S Chetan Kumar is the co-founder and C.E.O of Aikaan Labs (www.aikaan.io), an Edge computing company. We help in performance management of edge app and infra.