Blockchain, big data, and open source are independent technologies, but they are also complementary technologies. This article will explore the role of big data and open source in enhancing blockchain technology. But, first things first, what is blockchain technology?
Blockchain is the core technology used in the governance of cryptocurrencies such as bitcoin. It has also been adopted in other industries like banking and fraud prevention.
Blockchain, explained simply, is a decentralized, distributed ledger technology that records the provenance of a digital asset.
When a person makes any transaction like selling BTC to INR through the blockchain, it is recorded, and then nodes (a group of computer systems) in the network validate that transaction.
The network consists of a self-auditing mechanism that checks itself every ten minutes and reconciles transactions made in this timeframe.
Once validated, the record is added to a block, and the block (now with a unique hash code) is added to the blockchain.
Since blockchain uses cryptography, it is impossible to change the records in a blockchain, hence a transparent and incorruptible platform.
Open Source and Blockchain
Open source is at the heart of blockchain technology. At a glance, some people would assume that it would make the blockchain technology vulnerable. But in reality, the open source nature is the secret behind the transparency and incorruptibility of the blockchain network.
Here are a few reasons why open is important for blockchain:
Although blockchain has grown since its first use for bitcoin, it still requires intellectual input from developers in keeping up with innovations and improvements. These improvements are critical to the adaptability of blockchain for different industries.
Developers working on blockchain enjoy a symbiotic relationship, improving the blockchain through community collaboration. Also, through such collaborations, other leading innovations such as Ethereum have emerged.
Open source code allows different developers to test the technology, identify, and fix vulnerabilities in the blockchain. More experienced eyes on the technology mean more security for the system.
It costs a lot to develop and sustain a technology as robust as the blockchain. However, with open source, developers are committed to improving the system, identifying vulnerabilities, and fixing them.
The open source nature of blockchain technology reduces the costs businesses would incur in processing transactions. Businesses using blockchain are also protected from losses associated with fraud if they transact through the blockchain.
Decentralization goes a long way in democratizing currencies as well as other forms of decision making. Open source facilitates decentrazalization by ensuring that no single entity (source of truth) can be corrupted or make decisions that impact everyone.
Next, let’s explore the relationship between blockchain and big data.
Big Data and Blockchain
Big data, as the name suggests, refers to extremely large and complex datasets, which cannot be processed through traditional data management tools and techniques.
Research findings reveal that the blockchain ledger will contribute up to 20% of the total big data market by 2030. Big data analytics will come in handy in tracking transactions and enabling business that use blockchain technology to make better decisions.
Using data analysis strategies on blockchains enables users to identify trends, models, and threats through the data produced and exchanged.
Big data mining applications are capable of recognizing patterns from millions of blockchain interactions which is critical in identifying malicious and fraudulent users.
These applications also cluster and categorize blockchain data to better assess the trustworthiness of financial services, banks and other operators.
One of the real life scenarios where blockchain and big data has been employed in tandem is the banking sector in Japan. About 50 banks formed a consortium and partnered with Ripple- an open source blockchain-based network.
As you can see, big data and open source technologies are indispensable in the blockchain network. The open source nature of blockchain enhances its security and transparency, while big data presents the opportunity for blockchain to shine as a means of transparent data analytics, better authentication, and preserving the integrity of data.