Data sources are fragmented, making it difficult to establish trust in data quality. Blockchain technology might be the answer
Blockchain has emerged as an incredibly hot topic across the board, but one of its biggest applications is within big data. Last year IBM released a report that said 66 percent of enterprises are “actively involved” with blockchain deployments.
Big data isn’t always trustworthy, but blockchain could provide solutions to this problem by mathematically proving the integrity of an individual piece of information while also providing a mechanism for distributing and exchanging information securely among disparate parties.
The technology would allow users to “track the provenance of each piece of data back to its origin,” said Bernard Marr in Forbes. Companies want to use it for everything from supply chain management to digital payments. As a result, many organizations are now exploring blockchain technology as a way of solving big data problems.
In the context of big data, blockchain has been described as “a distributed ledger representing a network consensus of every transaction” that’s ever occurred on the chain, explained Tom Goldenberg in Big Data-Market Trends and Analysis 2018.
Distributed networks have led to new ways of understanding trust and security around information sharing, he added. But if you’re unclear about how it works or what exactly makes it appealing from a business standpoint, here are some things you need to know:
What is Blockchain?
In simplest terms, blockchain is a method for recording transactions or any digital interaction among parties so that all participants have access to the same version of the truth. This could be anything from record-keeping to managing medical records, Goldenberg said. “Blockchain is designed for decentralized control,” he added. “A distributed database creates a shared platform for data storage and management that can be applied across industries.”
The blockchain ledger is typically managed by peer-to-peer (P2P) networks, but these P2Ps don’t have to trust one another in order to transact on the network, Marr explained. All nodes in this network talk to each other directly using open APIs when they need something verified—and it works whether participants are inside or outside certain organizations’ databases or firewalls, according to IBM.
“It’s important for companies whose employees are geographically dispersed to use a system that spans the business operations,” Goldenberg said. “Blockchain lets them do this easily.”
What Does Blockchain Bring to Big Data?
In a nutshell, blockchain’s ability “to provide end-to-end transparency and accountability” for any kind of digital interaction is one of its most valuable features, according to IDC. In addition, the technology has been shown to not only secure data from tampering but also limit access from unauthorized third parties. This new openness could redefine how we approach to trust in transactions and subsequent contract enforcement,” the company added in a separate report.
Essentially, blockchain provides a way of tracking complex deals involving multiple parties without needing banks or other intermediaries as middlemen. The decentralized nature of the technology makes it possible to maintain trust even as data is shared among multiple parties—and that could be incredibly valuable for big data, Marr explained.
“Adding an immutable layer of transparency and accuracy will go a long way towards helping companies feel comfortable using their newfound treasure trove of data to gain new business insights,” he said. “As a result…we’ll see more advanced forms of artificial intelligence and machine learning embedded in every business process.”
Blockchain technology also offers a heightened degree of control over user access rights, Goldenberg noted. After all, if accurate information is what you’re after, this would prove invaluable when sharing sensitive information with third parties or trading partners.
Blockchain technology holds promise for big data by promoting more efficient transactions between business partners who may not know or fully trust one another, Marr added. Moreover, blockchain technologies’ anonymity could prove useful in industries that handle medical records and financial information.
Organizations won’t need to enlist outside experts with complicated cryptography and coding skills to take advantage of the technology, Goldenberg added. “Blockchain is a relatively new technology but it’s already pretty simple for people to experiment with,” he said. “Companies don’t have to make a significant upfront investment.”
Advanced Tracking Capabilities
The immutability that comes with blockchain opens up huge possibilities for big data analytics, according to IBM—and not just in business settings. Government officials using this technology could create more accountable systems of record-keeping across agencies.
In different localities, these distributed ledgers could provide secure voting mechanisms that ensure ballots are properly counted, as well as help tax authorities identify businesses and citizens who aren’t paying their fair share. “[It] can give users a way to ensure that certain activities remain in the record,” Marr said. “A blockchain would be a perfect way to keep a public ledger of electoral votes, for example.”
The benefits of blockchain technology for Big Data are manifold. Blockchain’s decentralization helps companies organize vast amounts of big data from a variety of sources, track it and share it securely. This would improve the security of data analytics, which in turn could mean more advanced insights with fewer risks for companies.
With the right software, blockchain technology could boost innovation in areas like predictive analytics and machine learning. Perhaps most important, blockchain will help ensure that all data is accounted for, rather than just the part of it that companies want to share.