Blockchain Infrastructure as a Service: Build vs. Buy

Should You Build or Buy Blockchain Infrastructure?

As financial operations evolve, blockchain infrastructure has become a critical layer for secure and efficient asset tracking and settlement. For institutions, it offers transparency (via a tamper-resistant transaction history) and auditability, features that strengthen governance and client trust.

The next question is strategic. Build and maintain blockchain infrastructure in-house or work with a blockchain-as-a-service (BaaS) provider?

The in-house route requires institutions to build and host their own blockchain on company infrastructure, which can be costly and involve long deployment times, not to mention compliance risk. Conversely, partnering with a BaaS provider enables institutions to quickly deploy custom blockchains with less strain on the bottom line.

Here's a look at the pros and cons of outsourcing blockchain infrastructure to a trusted third-party versus building and hosting a blockchain entirely in-house.

Key Takeaways

• Building blockchain infrastructure in-house institutions maximum control but introduces material risks (e.g., cost, deployment time, compliance exposure).

• Outsourcing blockchain infrastructure to an experienced third party with expertise offers short- and long-term benefits, such as speed and operational support.

• Before deploying any new blockchain solution, it’s critical to review security and compliance to avoid downstream risk and regulatory complications.

Key Components of Blockchain Infrastructure

Blockchain network infrastructure is composed of several key elements, including software and hardware components.

Nodes and Clients

At the core of any blockchain network infrastructure are nodes and clients. Nodes are computers that handle peer-to-peer (P2P) networking, relay transactions and blocks, and maintain the ledger. Clients, on the other hand, are the protocol implementations that those nodes run.

Using Ethereum blockchain software, for example, typically means pairing an execution client with a consensus client. In production, operators may deploy a small cluster behind private gateways and load balancers to ensure a reliable blockchain deployment.

Consensus

Consensus is how a blockchain builds the official ledger to finalize, accept, and record transactions. 

Two common frameworks include proof of work (PoW), where computers compete to solve complex cryptographic equations to add new data blocks to the blockchain, and proof of stake (PoS), where major holders choose computers to act as validators who collaborate to add new data blocks.

Bitcoin is an example of a PoW blockchain, while the latest implementation of Ethereum relies on PoS.

Networking and APIs

Networking and APIs are how applications talk to the blockchain. In production, private endpoints are securely exposed to manage throughput, protect sensitive data, and maintain low latency. APIs (application programming interfaces) enable different apps to exchange data with each other, including systems outside the network.

What Is Blockchain-Infrastructure-as-a-Service?

Blockchain-infrastructure-as-a-service, often referred to as blockchain-as-a-service, is a managed model where experts in blockchain and financial technology deploy and maintain custom blockchain solutions for others. That way, organizations can build and run applications without standing up their own infrastructure.

With BaaS, institutions don’t have to worry about technical issues like adding nodes and integrating new APIs. They can fully outsource their blockchain infrastructure; the provider maintains uptime, applies security patches, and supports compliance controls across environments. The goal is faster time-to-production with lower operational risk, not just “hosting.”

Depending on the program, Wallet-as-a-Service (WaaS) can complement BaaS by providing policy-driven wallet infrastructure (e.g., multi-signature/MPC policies, approvals, audit trails) and APIs for secure transaction workflows.

Build vs. Buy: The Economics of Blockchain Infrastructure

For most institutions, it’s not about adopting blockchain infrastructure. Instead, it typically boils down to whether to build the infrastructure internally or buy it as a managed service. Beyond security and compliance, many financial companies want to get down to the dollars and cents of which is more economical.

Building In-House

Building in-house represents a capital investment in an organization’s future. But with ownership of the asset comes managing the varying costs of maintaining infrastructure, employing IT and security personnel, additional compliance support (and more). It’s not just the software. It’s also the hardware, people, high-speed network connections, and other pieces of the blockchain infrastructure puzzle.

Buying BaaS

Buying blockchain-infrastructure-as-a-service shifts those capital and staffing costs into a predictable operational expense. It may also accelerate time-to-market, giving businesses a competitive edge as they work to grow their market share.

Security and Compliance Considerations

Security and compliance often tilt the math further. Reputable providers harden deployments, handle rolling upgrades, and expose audit-ready logs and controls, reducing operational risk and internal staffing burden. Not only are those requirements outsourced, but the liability shifts in the unlikely event of a problem to the vendor.

There are still trade-offs to weigh. Building maximizes control and can limit vendor dependency, while buying lowers the total cost of ownership and speeds delivery. For most institutions, starting with blockchain-infrastructure-as-a-service offers a balanced path. It’s fast to deploy, cost-effective to operate, and flexible enough to transition components in-house as needs change.

Why Blockchain Infrastructure Matters for Institutions

For financial firms, blockchain infrastructure unlocks a range of potential benefits, including secure custody, transaction processing, and access to on-chain markets. The right tech stack improves reliability and scale while reducing operational burden. It also allows for quick and accurate audits and policy controls that align with institutional governance requirements.

It’s also worthwhile to note that a misstep in homegrown infrastructure may not be immediately apparent. Many well-meaning businesses find themselves the victim of data breaches or service disruptions that turn into costly endeavors. In rare circumstances, regulatory or security mistakes can lead to the end of a company.

Blockchain comes with myriad benefits for financial services providers, but as with any other new technology, a careful and planned implementation with the right partners can set up institutions for success.

Building Institutional Trust With Blockchain Infrastructure

Financial institutions require blockchain infrastructure that inspires confidence, meeting rigorous regulatory, security, and operational standards. The right partner delivers audited controls, qualified custody, and global awareness so assets stay segregated, policies are enforced, and uptime remains consistent.

BitGo delivers that foundation through regulated trust entities, third-party-audited security, and institutional products that span custody, wallets, and APIs. BitGo’s infrastructure helps institutions launch and scale to support growth without compromising governance or compliance.

FAQs

What is the true total cost of ownership for building in-house versus buying BaaS?

Estimate the full three-to-five-year cost of ownership, including engineering salaries, 24/7 operations, hardware, upgrades, audits, and downtime exposure. Building creates ongoing capital and staffing expenses, while a BaaS model consolidates those into a predictable service fee.

How should we quantify time-to-market impact in the build vs. buy decision?

Estimate monthly revenue, savings, or strategic value forfeited while building, then compare that to a faster BaaS launch. In many cases, earlier market entry and cash flow outweigh theoretical savings from internal development.

Which security controls are non-negotiable in a BaaS platform?

While each business has different requirements, most BaaS customers should expect SOC 2 Type II compliance, strong key management, tight access controls, asset segregation, and tamper-evident audit logs. Providers should deliver real-time visibility and audit-ready evidence to verify ongoing compliance.

How do we avoid vendor lock-in, and what are the exit options?

Select providers with open APIs and data formats, plus clear contractual terms for data export and service exit. Documentation should be detailed enough for internal teams to migrate or integrate alternative solutions when needed.

What SLAs/SLOs and performance guarantees should we require?

For financial services, it’s wise to target at least 99.9% uptime, clear latency objectives for reads/writes, severity-based support response times, and geo-redundancy. Expect real-time observability and post-incident reviews.