Over the last few years, blockchain has been one of the hottest areas of technology development across industries. It’s easy to see why. There seems to be no end to the myriad ways that forward-thinking businesses are finding. Furthermore, they are doing this to adapt the technology to suit a variety of use cases and applications. Much of the development, however, has come in one of two places. One is deep-pocket corporations and crypto-startups.
That means that the latest in blockchain technology is out of reach for businesses in the small and midsize enterprise (SME) sector. This leads to creating something of a digital divide that seems to be widening every day. But, there are a few blockchain projects that promise to democratise the technology for SMEs. Furthermore, this could even do the same for Big Data and analytics, to boot.
In this blog, we will explore the basics of both big data and blockchain. Furthermore, we will analyse the advantages of combining both big data and blockchain. In the end, we will have a look the applications in real-world and wrap up with predictions about blockchain in future!
Big data, in general, refers to sets of data that are so large in volume and complexity. Traditional data processing software are not capable of capturing and processing this data within a reasonable amount of time.
These big data sets can include structured, unstructured, and semistructured data, each of which can go through analysis for insights.
How much data actually constitutes “big” is open to debate. But it can typically be in multiples of petabytes — and for the largest projects in the exabytes range.
Often, big data is a combination of the three Vs:
- an extreme volume of data
- a broad variety of types of data
- the velocity at which the data needs processing and analysis
The data that constitutes big data stores can come from sources like web sites, social media, desktop and mobile apps etc. The concept of big data comes components that enable organisations to put the data into practical use. Furthermore, they can solve a number of business problems with this. These include the IT infrastructure to support big data; the analytics applied to the data; technologies needed for big data projects; related skill sets; and the actual use cases that make sense for big data.
The blockchain is a technology that is revolutionising the way the internet works. Some of the main distinguishing points of blockchain technology are:
- The technology works by creating a series of data records where each new record resides in a block and has a link to the previous record. The term blockchain is derived from this system of linking blocks of data.
- Blockchain technology makes possible a distributed ledger system which makes records more transparent.
- It uses cryptography to protect user information, and the distributed ledger system is almost, if not impossible, to hack.
- Forms the backbone of cryptocurrency but also has several other applications.
- Cryptocurrency exchanges on the blockchain network can be central or a network.
- Decentralised cryptocurrency exchanges are virtually impossible to hack because there are multiple nodes supporting the system.
- Blockchain technology has made peer to peer sharing of content possible without the need for a middleman platform.
- Regardless of what you share via the blockchain network, you retain ownership of your content unless you sell it to someone.
- Personal information is highly secure and under protection with private key cryptography.
In a nutshell, the blockchain is a network technology that provides users with a chance to share content or make transactions securely without the need for a middleman or a central governing system.
What are the Blocks?
In very simple terms, a block, which is part of the blockchain, is a data file that records any type of transaction on the network. Data resides permanently on the block and becomes part of the chain and impossible to tamper with. For example, if you buy two bitcoins, the transaction is available in a block along with your private key. The private key is your digital signature and links the transaction to you. It is now forever recorded in one block that on that date, you bought two bitcoins.
If you want to buy something with one bitcoin, you will need to provide your private key. A bitcoin miner will use your key to track the last transaction to you and can verify that you have two bitcoins. When you use one bitcoin, that transaction resides in a new block and linked to your last transaction with a series of characters. In this way, all your transactions are audited on the network.
What are Hashes?
One of the reasons the blockchain is so popular is because the information on it, although distributed, is highly encrypted. Data on the blockchain is under encryption by creating a hash. An algorithm is required to create a hash, and it acts by taking the transaction information and converting it to a series of numbers and letters. Hashes are always of the same length.
On the surface, a hash does not make sense to anyone. This is where miners come in. Miners have the special skill set and the resources to decipher a hash and verify the transaction. Miners get paid in bitcoins that undergo generation every time they deliver a service.
What are the Nodes?
The blockchain and cryptocurrency have become synonymous with being decentralised. Decentralisation forms the entire basis of the transparency and the security of the system. But, even a decentralised system requires a support system to give it some form and structure. This support system comes in the form of nodes.
Nodes are focal points of activity spread all over the blockchain network. It is at nodes that blockchain copies are available, transactions undergo processing, and records are available. Nodes consist of individuals that are connected to the system via their own device. Each cryptocurrency has its own set of nodes to keep track of its coins.
The advantage of blockchain is that it is decentralised — no single person or company controls data entry or its integrity; however, the sanctity of the blockchain is through check continuously happening 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.
Why combine Big Data with Blockchain
Instead of uploading data to a cloud server or storing it in a single location, blockchain breaks everything into small chunks and distributes them across the entire network of computers. It effectively cuts out the middle man. There is no need to engage a third-party to process a transaction. You don’t have to place your trust in a vendor or service provider when you can rely on a decentralized, immutable ledger. Also, everything that occurs on the blockchain is encrypted and it’s possible to prove that data has not been altered. Because of its distributed nature, you can check file signatures across all the ledgers on all the nodes in the network and verify that they haven’t been changed
2. Data Quality
Blockchain provides superior Data Security and Data Quality and, as a consequence, is changing the way people approach Big Data. This can be quite useful, as security remains a primary concern for the Internet of Things (IoT) ecosystems. IoT systems expose a variety of devices and huge amounts of data to security breaches. Blockchain has great potential for blocking hackers and providing security in a number of fields, ranging from banking to healthcare to Smart Cities.
This is one of the main ways in which blockchain sets itself apart from the traditional models of technology that are common today. Blockchain does not require any identity for the network layer itself. This means no name, email, address or any other information is needed to download and start utilizing the technology. This lack of a hard requirement of personal information means that there is no central server storing users’ information, making blockchain technology considerably more secure than a central server which can be breached, putting its users’ sensitive data at risk.
One of the most appealing aspects of blockchain technology is the degree of privacy that it can provide. However, this leads to some confusion about how privacy and transparency can effectively coexist. The transparency of a blockchain stems from the fact that the holdings and transactions of each public address are open to viewing. Using an explorer, with a user’s public address, it is possible to view their holdings and their transactions. This level of transparency has not existed within financial systems before, especially in regards to large businesses, and adds a degree of accountability that has not existed to date.
These days, the trend in business processes is undeniably moving away from slow, manual methods and toward greater automation and centralization. Automating your processes has a number of benefits: completing tasks faster, increasing visibility, standardizing outputs, reducing errors, and lowering costs, just to name a few. Although automation has done a great deal to help companies become more efficient and productive, there’s further change on the horizon. In particular, blockchain workflow automation can help organizations that rely heavily on transactions and document-based processes to take the next step in their digital transformation.
1. Anti Money Laundering
Blockchain technology and its ledger allows for more transparency with regulators improving the reporting process. Furthermore, the shared and immutable ledger allows for unaltered transaction history. Also, the ledger can act as a central hub for data storage to process transactions. It can act with the activity across with risk officers within the financial services companies and regulators.
Improved identity management using encryption-based technology on a decentralized network could be established. Furthermore, digital identity improvements can help financial institutions meet the ever-changing KYC and CDD requirements. Moreover, this can happen simultaneously reducing the costs associated with implementing a robust KYC program. Ultimately, financial crimes and compliance violations could be reduced in the long term.
Blockchain technology is present in every sphere of our lives from banking to healthcare and beyond. Furthermore, cybersecurity is an industry which has a lot to gain by this technology with a scope for more in the future. Also, by removing much of the human element from data storage, blockchains significantly mitigate the risk of human error, which is the largest cause of data breaches. The reason why this technology has high popularity is that you can put any digital asset or transaction into the blockchain, the industry does not matter. Additionally, blockchain technology can prevent any type of data breaches, identity thefts, cyber-attacks or foul play in transactions. Hence, the data remains private and secure.
3. Supply Chain Monitoring
The possibilities for application of Blockchain in Big-Data Supply Chain solutions are present in this KPMG Report. The goods are in addition to the Blockchain and a Mobile App monitors the status of the goods as they are in transportation. Data is available with all parties in “near real-time” according to the report. Among the benefits include verification of Product Labeling Claims and that of Product Origins. And most important is the possibility of ensuring human rights with regard to fair wages etc.
4. Financial AI Systems
In terms of financial transactions, Blockchain is taking off in a major way and is set to become a significant aspect of monetary transactions. There are many other innovative ways wherein Big Data and Blockchain can be synchronous to deliver powerful products in the financial services industry. Auditing can have enhancements in a very thorough manner by Blockchain implementation. Also, the Ernst & Young Report states that the “time for experimentation is now.”
5. Automobile AI Systems
The Automobile industry is entering an altogether new phase of existence as cars are now more in sharing, self-driven and available with a host of sensor and communication technologies. As automobiles become autonomous, the range of options available using Blockchain begins with the complete standardisation of vehicle data which makes up a 100 per cent information automobile market.
6. Medical Records
This is an area where records are crucial and are always reside and scrutinized. When the Big Data systems that power this data-oriented sector is put through a Blockchain system, all records preserve with a clear track record while all migrations and interpretations that have been made to records are maintainable in a transparent manner. Also, systems have been in talks whereby researchers can contribute to mining in return for data at an aggregate level. Google is also developing a Blockchain system towards ensuring the security of health records.
Blockchain technology is just one of the ways to evolve automation and business process management in the future. While Blockchains are still early in the technology life cycle the constant stress tests by wider public adoption will only make the ecosystem more robust by improving on the building blocks already in motion. No doubt that blockchain is promising for data science. But, the truth is that we do not have many blockchain technology systems on an industrial scale. Furthermore, for data scientists, this means that it will take a while for the data treasure that Blockchain technology has to offer.
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