Technological advances will never cease to amaze us. As we speak, blockchain and big data are two of the most talked about recent innovations, and for good reasons. While we can categorize both blockchain and big data as “emerging technologies”, their benefits are gradually getting recognition. Between the two, big data is the older sibling, whereas blockchain is still getting out of its infancy. That said, blockchain and big data are very popular and have a global appeal.
In recent times, there has been a meaningful interest in combining big data and blockchain. But why is this happening? Since most businesses work with abundant volumes of data, big data and technologies around it have become very popular. However, as awareness of the benefits of blockchain technology grows, many businesses are exploring the possibility of combining it with their big data applications.
Blockchain has emerged as a cost-effective, reliable, and decentralized ledger to store large amounts of data daily. Prima facie, one may easily believe that both technologies are mutually exclusive. Against the backdrop of this very viewpoint, there has been noteworthy development to understand if blockchain in big data is workable.
Before we touch upon the benefits of blockchain in big data, let’s look at what they mean.
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What is blockchain?
Blockchain is a decentralized and distributed database system wherein transactions are stored and managed as “open ledgers.” One block in the entire blockchain stores information including transaction timestamp and a link to the preceding block.
Blockchain technology is tamper-proof and restricts users from modifying or changing data or saved records in the future. In addition, the entire blockchain framework is secure by design since the identical transaction is logged across different database servers.
What is big data?
In today’s digital world, data is the new oil. Businesses create, store, and send tons of data each day. But what is big data and why is there so much hype around it?
Big data is nothing but large volumes of data generated from different sources including weblogs, the internet-of-things (IoT) sensors, social media platforms, and other applications. Big data is structured (similar to tables in DBMS), semi-structured (XML files), or completely unstructured (images, videos, and audio files).
The hype around big data began when businesses acknowledged the shortcomings of traditional database management systems. Today, big data is used across the world by companies of different shapes and forms to gain precious insights.
Businesses are turning to big data analytics to draw insights and plan marketing campaigns based on the data collected. Many firms are also using big data in machine learning projects, predictive modelling, and other analytics applications.
So when we say big data deals with large volumes of data, how large are we talking about here? While there is no hard and fast rule, big data deployments can involve petabytes, terabytes, and exabytes of data that are captured over some time.
Combining blockchain technology with big data – what can we expect?
Now that we know what we mean by blockchain technology and big data, let’s examine if combine them.
When we introduce blockchain in big data processes, we are essentially adding another data layer. This layer of data fulfils two key requirements of big data analysis. These include:
- Big data generated via blockchain is safe, secure, and reliable since the network architecture is tamper-proof
- Since big data based on blockchain technology is structured, it is a good source for further analysis
Blockchain in big data makes perfect sense because of many reasons.
Since cryptocurrencies and other blockchain-based real-world applications are gaining steam, we store a large volume of transactional data across multiple ledgers. data lakes on traditional cloud storage services like AWS or Azure are very expensive and not at all cost-effective. A pilot project rolled out by Storj and other decentralized data storage companies exhibited a 90% reduction in costs compared to AWS [1].
Similarly, in Japan, a group of 50 banks joined hands with Ripple, an open-source blockchain network. The idea behind this partnership was to leverage the benefits of blockchain in big data by enabling risk-free transactions at low costs.
It was also observed that traditional financial transactions are expensive because of the high risk involved. By choosing Ripple, the consortium of banks reduced transaction processing time and other costs associated with it.
These instances justify the hype around blockchain in big data. Although blockchain guarantees the ledger’s integrity, the analytical aspect is missing. Big Data and the related analysis tools will be beneficial in this scenario. By using blockchain technology to store Big Data, businesses could save money. We can store a large volume of data on a blockchain for a very long time.
Benefits of blockchain in big data
Here are a few benefits of blockchain in big data worth looking at.
1. Transparent transactional data
The most obvious advantage of using big data techniques for crypto blockchains is finding transactional information. This information can help us determine how many people use a particular cryptocurrency, the frequency of transactions, and the amount that is sent and received. This can help you make informed decisions and help you spot emerging trends related to the usage of cryptocurrencies.
2. Complete control over data sharing
A big-data solution based on the blockchain enables service providers to share records with no risks. Data collected from data studies can be easily stored on blockchain networks in this scenario.
This prevents project teams from manipulating previous data or from duplicating data analysis work by other teams. By enabling them to trade analysis results that are stored on the network, a blockchain platform can also help data scientists monetize their efforts.
3. Improved data security
Improved data security is one of the main benefits of introducing blockchain in big data. Besides, blockchain paves the way for seamless and smooth big data analytics, with no hurdles. Since the entire blockchain network is decentralized, no one individual controls it. Further, it cannot be modified or altered without the consent of all the relevant parties. This prevents fraud and lays the foundations for fair, transparent, and safe data storage.
4. Organized data access
Blockchain in big data makes data access very efficient. Users from across different departments in a company can be added to a blockchain network, providing access to data that is required for analysis.
When a database is moved to the blockchain, an immutable source of data is created for everyone who has access to specific data. When someone wishes to access the records in a blockchain, authorized signatures and permissions from other parties in the network are required. This ensures that everyone can access the data they were looking for with no barriers.
5. Fraud prevention
Blockchain in big data will play a key role in preventing fraud. As of now, big data has not solved problems related to fraud detection and analyzing risk involved in financial services businesses. This is because the current systems in place primarily rely on historic data. Thanks to blockchain, financial institutions can now track every transaction in real time.
As a result, banks can now identify risky or fraudulent transactions instantly, eliminating the need to review the records of previous frauds.
If financial institutions can use blockchain to carry out transactions, they will finally be able to assess risk and spot suspicious patterns in real-time. This will aid in the prevention of fraud among banks and their consumers.
6. Better quality of data
Technological advancements are doing their bit to revolutionize technology. Businesses need to understand the need to replace traditional storage techniques with blockchain to improve data quality. The main reason is that blockchain is transparent, safe, and more streamlined. Besides, introducing blockchain technology in big data systems strengthens the core foundations of big data by getting rid of flaws.
This enhances accuracy and encourages comprehensive analysis, providing rich and reliable business insights. When the data gathered by large enterprises is secure, reliable, and accessible, it makes it extremely easy to make informed decisions based on insights gathered.
7. Data exchange
Thanks to data sharing platforms such as Dock, working professionals can manage their employment profiles on a single platform rather than juggling many profiles on different job boards.
To enable professionals to create thorough profiles, Dock also gathers certificates and other experiences from several sites and keeps them all on the blockchain.
Studies show that only about 75% of company data is used for data analytics. Blockchain, however, can ease these restrictions by enhancing the security and ease of data sharing without incurring large infrastructure costs.
Final words
There is no doubt that blockchain in big data is a perfect fit. That being said, there is a noteworthy amount of work that needs to be done to ensure it becomes mainstream. Blockchain promotes secured data storage and privacy to boost data integrity, whereas big data primarily deals with large volumes of data to facilitate better decision-making.
The concoction of big data and blockchain technology is nothing short of impressive. Both technologies complement each other, and therefore more and more businesses are looking to deploy these technologies to stay ahead of the curve.
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Image 1 Source: Photo by Markus Spiske on Unsplash
Image 2 Source: Photo by GuerrillaBuzz Crypto PR on Unsplash
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Sources:
[1] Epstein. J (2017) “When blockchain meets big data, the payoff will be huge” KPMG [online] Available from: https://venturebeat.com/business/when-blockchain-meets-big-data-the-payoff-will-be-huge/ [accessed September 2022]
