March 22, 2018
Currently, different types of businesses use predictive analytics like the financial services, which is majorly their life force. Other businesses like e-commerce stores and online video streaming services have enjoyed the sweet power of predictive analytics. Predictive analytics is a modern marketing tool. Prediction becomes difficult if significant meaning cannot be translated from a large data set.
Arguably the most significant development in information technology over the past few years, blockchain development has the potential to change the way that the world approaches big data, with enhanced security and data quality just two of the benefits afforded to businesses using Satoshi Nakamoto’s landmark technology.
The advantage of blockchain is that it is decentralized – no single person or company controls data entry or its integrity; however, the sanctity of the blockchain is verified continuously by every computer on the network. As all points hold the same information, corrupt data at point “A” can’t become part of the chain because it won’t match up with the equivalent data at points “B” and “C”. With the above in mind, blockchain is immutable – information remains in the same state for as long as the network exists. (1)
Across banking, fintech, healthcare, retail and public administration, establishments have started using blockchain to handle data to prevent hacking and data leaks. For example in healthcare, a technology like blockchain can make sure that multiple “signatures” are sought at every level of data access. This can prevent a repeat of the 2015 attack that led to the theft of over 100 million patient records. But businesses expect to see other benefits from this adoption as well. And like with healthcare, in gambling too, blockchain analytics tools are viewed as handy tools to define gambling patterns and identify patterns of frauds that casinos can use to dig out loopholes.
Up until now, real-time fraud detection has only been a pipe dream and banking institutions have always relied on using technologies to identify fraudulent transactions retrospectively.
Several industry experts have expressed concerns that a technology that can provide a record of every transaction can be exploited for everything “from customer profiling to other less benign reasons”. (2)
From another perspective however, blockchains greatly improve transparency in data analytics. Unlike previous algorithms, the blockchain design rejects any input that it can’t verify and is deemed suspicious.
As a result, analysts in industries such as Retail only deal with data that is completely transparent. In other words, the customer behavior patterns that blockchain systems identify are likely to be a whole lot more accurate than it is today.
The data within the blockchain is predicted to be worth trillions of dollars as it continues to make its way into banking, micropayments, remittances, and other financial services. In fact, the blockchain ledger could be worth up to 20% of the total big data market by 2030, producing up to $100 billion in annual revenue. To put this into perspective, this potential revenue surpasses that of what Visa, Mastercard, and PayPal currently generate combined. Big data analytics will be crucial in tracking these activities and helping organizations using the blockchain make more informed decisions. Data intelligence services are emerging to help financial institutions, governments, and all kinds of organizations delve into who they might be interacting with on the blockchain and uncover “hidden” patterns.
According to Rick Burgess of Freshminds: “Using social data to predict consumer behavior is nothing new, and many traders have been looking to include social metrics into their trading algorithms. However, because there are so many factors involved in pricing most financial instruments, it can be extremely difficult to predict how markets will change.” (3)
Data analysts are now mining social data for insights into key cryptocurrency trends. This, in turn, helps organizations uncover powerful demographic information and link bitcoin’s performance to world events.
Although blockchain offers great promise for data science, the truth is that we do not have too many blockchain-based technology systems deployed at industrial scale in the first place. As a result, the real dangers and threats with blockchain may not be apparent for at least a few more years until blockchain becomes more mainstream.
For data scientists, this means two things. One, it is still going to be a while before the treasure trove of data that blockchain promises to offer is made available to them across various industries. But more importantly though, as the flaws in the technology become more visible, blockchain is at threat of being regulated or being replaced with traditional systems. That is something that data scientists may not want. (4)
Infinity Blockchain Labs (IBL) is a visionary R&D company engaged in intermediary and RegTech services employing blockchain technology. We focus on forming alliances with established businesses and regulatory institutions across various industries, as well as providing collaborative incubation for early stage blockchain projects. We aspire to empower Vietnam to become a global leader in blockchain.
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