How Leveraging Blockchain Data Can Be Revolutionary

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The legitimacy of cryptocurrencies is constantly threatened by bad actors. Wash trade is a huge problem, for example, and is prevalent in NFT sales: a high-profile case was exposed in a popular marketplace where 94% of the $2 billion traded turned out to be wash trade.

How did we learn it? An NFT analysis site examined blockchain data over an eight-day period. It’s not a small business, but a high-value service that should become commonplace if the industry is to foster trust.

Data analytics and aggregation companies are thus poised to become mainstays of the space by providing vital insights into what is really happening on blockchains. In their absence, critics and regulators have been right to express doubts about the burgeoning technology.

Business applications will also proliferate, as evidenced by the major developments coming from Chainlink (LINK). Last year, the company announced a partnership with the Associated Press news organization to make its datasets available to leading blockchains, where the data can be used to automate key processes that occur on-chain. .

Whether it’s informing the markets of race calls, triggering a chain trade when a company’s quarterly financial statements are released, or even augmenting the appearance of NFTs based on real events , this partnership has a significant impact. Applied to the entire business world across multiple sectors, there could be a gigantic shift in the use of data.

good information

Properly collected and well-analyzed data has the potential to weed out questionable companies and individuals and prevent them from achieving nefarious goals. In theory, blockchain data is publicly available. It follows that anyone can do the job themselves. In practice, this isn’t feasible because your average vigilante or even a fledgling analytics company doesn’t have the technology to create large datasets at a scalable pace.

Knowing exactly what is needed in terms of data is a significant hurdle. So, a bespoke platform should work with industry players, and more specifically developers, to extract useful data on a scale yet unheard of in the blockchain industry. In its early stages, aggregation and analysis will face steep learning curves.

Apply data holistically

For business applications, private blockchains predominate. Personalized and structured data can be processed accordingly in a private dataset. It will be useful commercially. When a company has paid a lot of money to extract data based on very specific requests, they are likely to want to protect them, especially considering that these datasets are constantly expanding due to the nature of the blockchain and therefore remain highly relevant. Access can also be sold to other companies under a license agreement.

When it comes to entities seeking to siphon off data for the public good, it is possible to construct datasets that allow for participatory analysis. The crypto industry needs it badly. There is not enough money to expose bogus trading and other malicious activity: we currently rely on the actions of a dedicated minority. Adequate and universal access to clean data can stimulate the emergence of public bodies that help cryptocurrency become a self-regulating domain.

We have barely scratched the surface. Insurance is a huge consumer of data as it informs the entire business model as brokers need to know how to charge competitive yet profitable premiums. And Chainlink is leading the charge here again: Last year, they signed a deal with insurance startup Arbol, which provides crop insurance to farmers and businesses to provide decentralized weather data. In this case, smart contracts can trigger payments based on weather data.

Data reconciliation

Traditional businesses face a plethora of issues when selling data to third parties, but in the realm of crypto, this is less of a concern because everything is transparent. However, most projects in the Web3 space are not completely decentralized, leading to decision making on whether to remove certain data from the chain.

The beauty of a global data aggregation protocol reconciles on-chain data with off-chain data: companies will be able to customize data links to make them work. Most projects only see half the data because all they need is on-chain data movement to make the decisions they need.

The core technology for a successful data aggregation and cleansing process must be cross-chain compatible, because while Ethereum virtual machine (EVM) chains dominate the space, you also have chains like Solana that create cutting-edge solutions.

The text itself in blockchain data needs to be structured very specifically for chains like Solana because the whole technology behind it is different. Additionally, the high rate of transactions per second offered on Solana means that from the genesis block to real-time, the database is far larger than most other chains. There are hundreds of thousands of transactions per second on Solana.

When a database is full of data, it is not necessarily very useful for other people. For a data cleansing service provider, it becomes very difficult to structure data to filter clean party noise given the huge volume of transactions, many of which are meaningless and have no value to the user. ‘to analyse.

For centralized chains, data aggregation and subsequent analysis can help build trust in an environment where the entity itself controls the validators when they can, in turn, exercise political control over the actors. keys to the entire ecosystem. Once trust is lost, you can’t get it back easily, so cutting through the noise and seeing what happens with on-chain transactions can be invaluable. This is one of the reasons why blockchain data is so important and can trigger sweeping changes in the way we interact with cryptocurrencies.

Guest post by Tom Tirman of IQ Protocol

Tom Tirman is the CEO of IQ Protocol, the leading NFT leasing solution that allows games and other platforms to wrap digital assets and lend them to users looking to play and win. Prior to crypto, Tim graduated from a leading technology university in Eastern Europe for law and continued his studies at the Stockholm School of Economics. He also runs PARSIQ, a web3 data aggregator in his spare time.

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