Everything is moving to the cloud these days, and for good reason — cloud-based services offer reliability, scalability and support to a degree that is unattainable for a company without an experienced IT team.

In short, the cloud lets companies focus their efforts on their products, and leave the hosting to professionals.

In the digital currency space, many application developers have experience in IT, but for mainstream development, it makes sense for block chains to move to the cloud. Enter BlockCypher, which offers cloud-based solutions for on-block chain applications.

Founded by a team of software veterans, BlockCypher’s goal is to be the infrastructure for the next-generation of block chain applications, providing users the ability to host multiple block chains on a single infrastructure that gives users a consistent interface across multiple coins.

With the recent addition of litecoin to BlockCypher’s platform, for example, Love Will Inc, the creator of the Pheeva wallet, is already working on a new wallet, potentially opening up Gyft card purchases to litecoin users.

Potential applications

Building and managing a high-volume, data-driven application can be challenging. Introducing one or more block chains into the application then adds a whole new array of complications: each block chain requires its own dedicated infrastructure for processing, storage and peer-to-peer protocols.

BlockCypher says it can collapse all of that into a single intuitive interface that is both reliable and scalable across multiple block chains.

What sort of applications require multiple block chains running simultaneously? Take an exchange, for instance, which must maintain a full node for each coin they offer trading for and they must support a wide range of capabilities, from the latest price to algorithmic trading.

A service such as BlockCypher’s gives the ability for their developers to focus on the exchange business without the additional burden of running the back-end for multiple block chains.

Another example is a gaming casino application with a web front-end leveraging the bitcoin and litecoin block chains. As users place their bets, communication must occur between the game’s back-end and the block chains. To achieve this, developers must host full nodes to get block chain data and broadcast new transactions.

For both the exchange and gaming examples, they have to decide whether they want to host multiple full-node block chain infrastructures themselves or use web APIs.

Need for APIs

Clearly there is growing market demand for APIs that can process and store block chain data in convenient forms and broadcast transactions on a user’s behalf, as the bitcoin ecosystem has seen a number of API companies emerge recently.

APIs offer major benefits for application developers because they greatly simplify having to build out the necessary infrastructure. However, APIs raise concerns for reliability and privacy. If everyone uses the same API and it goes down, the whole ecosystem takes a serious blow. Also, if all your requests travel through a single company’s servers, that company can maintain a lot of behavioral data. That being said, those concerns have been largely addressed by cloud solution providers in other industries.

While a low-volume app can get away with free APIs that may or may not work consistently, more serious applications cannot afford to bet their business on such services. Both reliability and performance are required for high transaction applications and are complicated to achieve.

In the case of BlockCypher, Catheryne Nicholson, CEO and founder, says their primary focus is scalability and performance:

“We run in multiple data centers with redundant servers for low-latency and failover prevention. This means that requests are fast and that there is no single point of failure in our architecture […] We could literally lose more than one-third of our servers with no outage. We can easily handle several 100,000 requests/hr and it doesn’t matter if you make 100,000 requests on one block chain or 1,000 requests on 100 different block chains.”

Challenges and opportunities

BlockCypher’s founders, Catheryne Nicholson and Matthieu Riou, are software veterans with a long history of building platforms in finance, defense, CRM, energy and education.

In rebuilding the Bitcoin client, they generalized it across multiple digital coins and block chains to isolate the different roles outlined in the original Satoshi white paper. Their architecture has modular and separated components which allows them to scale linearly, distribute their software onto multiple sites and support many use cases.

Nicholson explained:

“We can build APIs that range from the basics (e.g. balance and unspents for an address, basic transaction WebHooks) to advanced capabilities (e.g hosting your own custom coin – we incur no overhead by hosting an additional block chain) to very advanced capabilities (e.g. multi-sig transactions) to future capabilities (e.g. transactional cross-chain transfers with pegs).”

Their infrastructure also takes into account the accelerating size of the Bitcoin block chain (it’s nearly 18Gb, growing over 2.5 times in the last year):

“We use multiple instances of a distributed database, so the block chain can grow to whatever size, and we can support it. If you want to visualize the entire block chain or run analytics on it, we can help you do that.”

BlockCypher’s initial targeted users are wallets and exchanges, but its service could be useful for any application that leverages the block chain.

BlockCypher will offer a tiered pricing system, based on usage and data volume, which will include a free tier for low-volume users and an extended free plan for early adopters. It will also offer custom solutions and specially purposed APIs that can be licensed to businesses to accelerate and support those applications.

Future plans will permit integration of their software into enterprise architectures.

This article was co-authored by Ethan Buchman