Use of Data Science in the Making of Cryptocurrency Blockchains

Learn more about the use of data science in cryptocurrency blockchain

Emerging technologies such as big data and blockchain are touted to be the next big things set to revolutionize the way organizations do business. Most of us are under the impression that these technologies are mutually exclusive – each having its own unique paths and used separately. However, that will be off the mark. While data science deals with utilizing data for proper administration, blockchain ensures the data security with its decentralized ledger. These technologies have vast untapped potential that can increase efficiency and enhance productivity. Blockchain technology rose to prominence with the increasing interest in digital currencies such as cryptocurrencies and bitcoin. However, today it has found relevance not just in recording cryptocurrency transactions, but also recording anything of value. The aim of data science is to extract insights and other information from data, both structured and unstructured data. The field of data science encompasses machine learning, data analysis, statistics and other advanced methods that are employed to gain an understanding of the actual processes that use data.  

Big Data and Blockchain

Corporate giants such as Facebook, Google, Apple, and Amazon are mining volumes of data every day. The vast field of data science has spurred the demand for data scientists who are tasked with deriving meaning from data and assisting in solving real-world problems. This demand is also fed by the area of big data, an advanced area of data science which deals with extremely huge volumes of data that cannot be handled by conventional data handling techniques. With blockchain, a new way of handling data is possible. It has eliminated the need for the data to be brought together and has paved the way to a decentralized structure where data analysis is possible right from the edge of individual devices. Additionally, data generated through blockchain is validated, structured and immutable. Since the data provided by blockchain ensures data integrity, it enhances big data. Today, most businesses are looking towards deeper, advanced analytics as data has become more accessible and robust. Currently, the data that businesses use are mostly scattered which demands weeks or months of effort to sort out. The integrity of the data can be affected greatly by any sort of human error, affecting the end analysis. Data also faces the risk of being compromised when it is stored in one centralized location. There is also the possibility of data centers being tampered with and getting released to the public. Everyone wants needs, but it is a huge chore to ensure that it is accurate and secure. For executing data analysis and predictive modeling, data science needs a functional and solid data set. With a decentralized blockchain, data scientists can strengthen their ability to manage data and also set a solid infrastructure.  

Data Science in Cryptocurrencies

A straightforward utilization of big data and data science in the crypto space is to perform cryptocurrency analytics. Big data infrastructure can handle the massive volume of cryptocurrency data generated from transactions. Data science techniques can generate useful investment insights and predict future outcomes. By taking transaction data for analysis, it is possible to identify the price fluctuation of any given crypto (doing Bitcoin future predictions, for example), enabling investors to improve profitability and prevent substantial losses. In addition, crypto forecasting can also be trained using social-based data. Information like user activities and participation, combined with transaction data, current market price and computational powers, better prediction on the market volatility over time can be generated.