As blockchain technology continues to be explode in popularity and be adopted by organizations around the world, new types of data are becoming available for analysis by the most recent big data technologies
As defined by the World Economic Forum (WEF), “Blockchain technology allows parties to transfer assets to each other in a secure way without intermediaries. It enables transparency, immutable records, and autonomous execution of business rules.”
Investments in the blockchain are on the rise. Banks, private businesses, and even governments are investing in the technology. The WEF predicts that smart contracts alone on the blockchain could equal 10 percent of the global GDP by 2027. As with any new technology, it’s important to note the value of the data that comes with it. And arguably the most valuable data involved with blockchain technology is that of virtual currency use.
Over the past few years, and with the development of bitcoin, the use of virtual currencies is gaining momentum around the world. However, the currencies remain unpredictable and only partially understood, even by experts. To create clarity, organizations interested in the blockchain, and more specifically bitcoin, are beginning to use big data to provide insights into the virtual currency’s future performance. The IDC recently reported that global IT spending is in the trillions and big data revenues will grow to more than $203 billion by 2020. By 2027, the value of big data as a service is predicted to be between $500 billion and $1 trillion, and managing virtual currency on the blockchain could account for a significant portion of that revenue.
Many of the best ways to realize the full potential of the virtual currency, and alleviate some of the risks involved, may be by harnessing its big data. As the blockchain is essentially a ledger that every bitcoin transaction must pass through for verification by the millions of other peer-to-peer users, the insights to be collected from that ledger are potentially endless. And even though there is no identifying information in a transaction on the blockchain itself (the blockchain only knows the two wallets that exchanged the currency and the amount), all transactions are public and each user’s activities are visible to everyone on the blockchain.
Organizations are beginning to perform data analysis on virtual currency activities to uncover powerful insights into trends and events surrounding currencies like bitcoin. So what type of trends can be revealed? Here’s a brief overview of what data enthusiasts are beginning to unmask in the world of the blockchain and cryptocurrencies with a big data mindset and the right data analytics tools.