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What is blockchain data analytics, and why should you use it in your business?
Blockchain data analytics has become a better option for businesses to analyze their data on blockchain for better data security and efficiency.
But what are the other benefits of blockchain data analytics? Let’s check in detail about blockchain data analytics, how it works, and the methods to analyze data on the blockchain.
What is blockchain data analytics?
Blockchain data analytics is the process of analyzing data on a blockchain. The process involves inspecting, identifying, understanding, and visualizing data on a blockchain. The analytics help users understand the various aspects of that specific blockchain network.
Blockchain analytics helps improve the security of the blockchain network from unwanted transactions such as money laundering and other kinds of online fraud.
Key Market Takeaways for Blockchain and Data Analytics
Data analytics and blockchain are revolutionizing industries, and their market dominance is poised to continue. Here’s a glimpse into their projected growth:
- Blockchain Market: Expected to surge from $7.18 billion in 2022 to a staggering $163.83 billion by 2029. This translates to a Compound Annual Growth Rate (CAGR) of 56.3%.
- Data Analytics Market: Projected to reach a colossal $329.8 billion by 2030. This signifies a CAGR of 29.9% from 2022 to 2030.
Both markets are experiencing significant growth, highlighting the increasing demand for these transformative technologies.
How does blockchain data analytics work?
Blockchain analytics help extract and process data into easily readable formats. Ethereum ETL is an open-source project allowing users to convert blockchain data into readable formats such as CSV.
The most common objective of using blockchain data analytics is to track each transaction on their network. Blockchain analytics tracks the crypto wallets of each user to track all the transactions. A readable data format helps companies analyze suspicious transactions in their networks.
Each crypto wallet has its unique address that acts as a unique identifier through which the blockchain data analytics tracks each user’s transaction. The business can easily find suspicious users through their wallet addresses with the help of blockchain analytics, so the companies can make their networks more secure.
Know how blockchain and data science relate to each other to understand their work in depth.
Relation between Blockchain and Data Science
You can understand the relation between blockchain and data science by knowing them separately.
What is blockchain?
Blockchain is a decentralized and irreversible virtualized data record that tracks crypto transactions and other digital assets across the internet. The assets include patents, trademarks, smart contracts, indirect commodities, etc. The multiple computers are connected across a blockchain network, providing shared computing power and data storage.
What is data science?
In data science, we extract knowledge and information from organized and unorganized data with the help of machine learning, artificial intelligence, and other advanced data science methods. Data science helps companies and organizations know the outcomes from their previous data records to make better decisions.
Now, let’s check how blockchain and big data differ.
The Main difference between blockchain and data science
The following parameters help you better differentiate between blockchain and data science.
| Blockchain | Data Science | |
| Working | Data recording and validation. | Data analytics. |
| Aim | To allow data to be recorded and distributed immutably. | To construct the methods for data extraction. |
| Uses | Real-time transactions. | Gives in-depth data analysis. |
| Benefits | Maintain Data Integrity | Enhances data efficiency. |
| Purpose | Maintain Data integrity | Accurate data prediction |
Now, let’s understand why blockchain data analytics is important.
Why Analyzing Blockchain Data is Important for Your Business
Blockchain technology is revolutionizing industries, and the vast amount of data it generates holds immense potential. But just like any valuable resource, it needs to be analyzed to unlock its true power. This is where blockchain data analytics comes in.
Here’s why analyzing blockchain data is crucial for your business:
- Unprecedented Transparency: Blockchains offer a transparent and immutable record of transactions. By analyzing this data, you can gain insights into everything from supply chain movements to customer behavior. Imagine tracking the origin of your products in real-time, ensuring authenticity, and identifying potential bottlenecks.
- Enhanced Security: Blockchain data analysis can be a powerful tool for identifying and mitigating security threats. By analyzing transaction patterns, you can detect suspicious activity and prevent fraudulent actions on the network. This is especially important for businesses dealing with sensitive data or financial transactions.
- Informed Decision-Making: Data is the new oil, and blockchain data is no exception. Analyzing this data can provide valuable insights to make informed business decisions. You can identify market trends, understand customer preferences, and optimize your operations for better efficiency.
- A Competitive Edge: In today’s competitive landscape, staying ahead of the curve is essential. Blockchain data analytics can give you a significant edge by providing insights that your competitors might be missing. Analyze data to identify new opportunities, develop innovative solutions, and stay at the forefront of your industry.
- Building Trust: Blockchain technology is built on trust, and analyzing its data can further strengthen that trust with your stakeholders. By providing verifiable data about your operations, you can build stronger relationships with customers, partners, and investors.
How do you analyze data on the blockchain?
There are many ways to analyze the data on the blockchain, and each method requires three general steps of blockchain analysis.
The first is address classification, in which we connect the location address to real-world entities.
Next, we check the transaction risk score among the blockchain connections between the entities.
The third step is an investigation where we use data visualization tools to represent newly organized blockchain data. Let’s check the steps to showcase graphical representations of blockchain data efficiently:
1. Data filtering
The data involved in blockchain data analytics is big and expanding rapidly. You will need to filter data based on your preferred attribute, such as transaction size, wallet ID, risk score, transaction times, etc.
With data filtering, the automatic layout is another best way to help investigators and analysts investigate big and complex blockchain data.
2. Data grouping
The process involves creating a new address for each transaction across multiple wallets. The grouping will help insurance to reduce the risk of fund theft. Investigators need to combine different wallet addresses manually for data grouping.
3. Enabling users driven capabilities
After extracting data from the blockchain, the analyst can represent that data to the user with custom graphics styling. Describing data in a customized way allows users to analyze and understand blockchain data more efficiently.
Implement the “land and expand” data visualization approach so the users can easily access a large amount of data.
4. Smooth animation
Integrating the smooth animation will help you maintain the users’ interest. Smooth animation enables a great accessing experience for users to read the blockchain analytics report.
5. Make data easier to export
Along with allowing users to read the blockchain data from the software efficiently, it can be better to allow them to export data into other formats, such as PDF reports and image files. Allowing users to export data will help them to have instant access to the visualized data and will provide an easier way to share it with anyone.
6. Graphics rendering of data
Accessing blockchain data in a large amount requires powerful graphics rendering, so the data loads quickly on their screen. You can integrate high-performing graphical renderers like WebGL, SVG, and other more straightforward visual rendering approaches.
Knowing the different use cases of blockchain data analytics will help you understand why you should use the same in your business.
Different use cases of blockchain data analytics
Understand different ways businesses use blockchain analytics.
1. Identify High-Risk Customers
Blockchain companies can identify their customers who are involved in criminal activities by tracking their crypto transactions.
Blockchain data analytics helps companies screen wallets to discover suspicious or illegal transactions on their networks. Eliminating such suspicious customers from their network helps them manage their good reputation in the market and maintain their users’ trust.
2. Business expansion in other regions
Blockchain companies can identify their customers who are involved in criminal activities by tracking their crypto transactions.
Blockchain analytics helps companies screen wallets to discover suspicious or illegal transactions on their networks. Eliminating such suspicious customers from their network helps them manage their good reputation in the market to maintain their users’ trust.
3. Helps business to keep their data safe from competitors
Companies are now storing their data on blockchain networks to protect them from competitors. Companies perform blockchain data analytics to eliminate the risk of having any security threat in blockchain networks. So they can gain an overall insight and transparency in their blockchain-related networks.
4. Improving data sharing management
Blockchain provides users with easy access to its data storage. With blockchain analytics, companies can distribute their data easily to their different teams to work on and manage the separate data efficiently.
5. Helps in making better business decisions
Companies are now storing their data on blockchain networks to protect them from competitors. Companies perform blockchain data analytics to eliminate the risk of having any security threat in blockchain networks. So they can gain an overall insight and transparency into their blockchain-related networks.
6. Enable real-time analysis
Without blockchain, it is difficult for companies to analyze real-time data. To identify any data irregularities in the early stages, the company prefers using blockchain technology in data science to take full advantage of real-time data analysis.
7. Improves data accuracy
As the blockchain stores data in private and public nodes, the company can examine and cross-check its data at the entry point to validate its accuracy before adding data to other blocks.
8. Prevents data duplication
Blocks and restricts data duplications due to their irreversible nature. Avoiding data replications helps companies to improve the accuracy of the data.
Blockchain analytics verify and cross-check the data at every block with multiple signatures on blockchain records, but they don’t grant data access until the exact signature match has been found.
How is blockchain analytics helping businesses?
Due to the decentralized nature of blockchain, businesses are implementing blockchain technology on their data records by hiring blockchain developers. Using blockchain analytics on a large scale opens new opportunities for entrepreneurs to help them start their blockchain analytics companies.
Also, using blockchain technology for data analytics is economical as it provides data storage and computing capabilities at a low cost compared to technology based on centralization.
There is a great demand for blockchain analytics in multiple sectors to secure their data and make better predictive analytics models for better future decisions such as
- Healthcare
- Insurance
- Automotive
- Media and entertainment
- Telecommunications
- Retail and consumer goods
How can Idea Usher help?
Combining blockchain with data analytics is a good step toward your business’s success. Even more, along with working with data analytics, blockchain has considerable future potential.
If you think there is a need to integrate blockchain technology into your business or want to build blockchain-based digital products, you can contact Idea Usher.
Idea Usher is a team of data engineers and blockchain developers. Their team can help you build and market your blockchain products.
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FAQ
Q. What is a blockchain data analyst?
A blockchain data analyst is a specialist skilled in both data analysis and blockchain technology. They possess the ability to:
- Understand the intricacies of blockchain data structures.
- Utilize data analysis tools and techniques to extract meaningful insights.
- Communicate complex findings to technical and non-technical audiences.
As blockchain adoption grows, the demand for blockchain data analysts is expected to rise.
Q. Can data analytics be used with blockchain?
Absolutely! Data analytics is a powerful tool for unlocking insights from blockchain data. This data offers a unique perspective on transactions, network activity, and user behavior. By analyzing this data, businesses can gain valuable information for:
- Improved decision-making: Data analytics can reveal trends and patterns in blockchain activity, allowing businesses to make data-driven decisions.
- Enhanced security: Analyzing blockchain data can help identify suspicious activity and potential security risks.
- Greater efficiency: Data analysis can optimize processes and identify areas for improvement within blockchain-based systems.
Q. How do you analyze data on the blockchain?
Blockchain data analysis involves specific techniques due to the distributed nature of blockchain technology. Here’s a simplified breakdown:
- Data access: Blockchain data is typically publicly available on public blockchains. However, permissioned blockchains require authorization.
- Data collection: Tools and services can extract and organize blockchain data for analysis.
- Data analysis: Techniques like machine learning and data visualization can be applied to uncover patterns and trends within the data.
Q. Can blockchain handle big data?
While not inherently designed for massive datasets, blockchain technology can handle big data to an extent. Here’s why:
- Scalability limitations: Traditional blockchains can struggle with the sheer volume of big data due to their distributed nature.
- Alternative solutions: Scalable blockchain solutions are emerging to address big data challenges. Additionally, data sharding techniques can distribute data storage across the network.
