The big data market is predicted to reach a total value of $275 bn somewhere around the year 2023. More and more companies understand the importance of big data analytics and its influence on market comprehension, consumer trends analytics, detection of consumer patterns, etc.
With cryptocurrency reaching its peak last year and establishing a stable business front. It was only a matter of time when people are going to introduce big data into the cryptocurrency mining process. With this, Big Data Analytics and the Blockchain learning process have come in trend. You can use the Intellipaat blockchain and Big data Training platform if you are interested in learning them.
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The benefits of combining big data with cryptocurrency are numerous; however, we’re going to check out those which seem to be on top of the list.
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Table of Contents
Identifying fake and dangerous users
Safety and anonymity are some of the perks of the cryptocurrency trade. However, doing business in the dark carries an amount of risk that you could end up trading with criminals or dangerous organizations, which could easily get your business blacklisted. With more than 200.000 transactions per day, it’s safe to assume that this risk is more than real, and such a vast trade volume makes it even harder to track down the flow of currency.
This is where big data steps in with pattern recognition across transactions and in-depth blockchain data analytics. Just by using these two simple tools, it’s easy to identify dangerous users and avoid doing business with them.
No matter how secure a system may be, it can still leak information or suffer a hack attack. Cryptocurrencies, especially Bitcoin, are very secure and provide a limited amount of public data; however, with the rising tide of data-based hacking and quantum computer technology, the risk of losing all your hard-earned cryptocurrency is very real.
You could think that you’re paying for that essay you ordered on aussiewritings.com and find out that it was just a ruse to break into your private information. In order to identify the potential leaks and security hazards, security analysts use big data analysis so they could improve the overall safety and prevent theft.
Since cryptocurrency value depends heavily on trade volume, it’s important to have some sort of advantage over the market if a person wants to make a profit. According to an article published by IBM’s Ralph Jacobson, there are more than 2.4 exabytes of data being created on a daily level. Such an ocean of information is a valuable source of data that, when carefully analyzed, can show us in which direction the value and trade volume of Bitcoin or any other cryptocurrency for that matter is going to move.
The rule is simple since there is a predictable amount of cryptocurrency on the market. And its value is not affected by any physical goods such as gold, oil, etc. The market demand is the only thing that establishes the price of coins.
Using social data to predict consumer behavior
For the conventional monetary system, using big data to predict consumer behavior could be tricky. Most financial instruments depend on various factors which make it difficult to predict the direction in which the market will move. However, for cryptocurrency, this is not the case because, as we said earlier, demand depends solely on supply.
Big data gathered from social media profiles can show us a clear picture of people’s feelings towards the current state of the cryptocurrency market, the latest events which concern cryptocurrency, etc. According to a recent article written by NYC Data Science Academy CEO Chris Neimeth, cryptocurrency meets all the conditions to benefit from social network data analysis.
The demographics related to social media and cryptocurrency trade are the same, the trade relies on individuals more than on large companies, and all the events that can affect cryptocurrency are predominantly first, and on the largest scale published on social networks.
Helping startups to scale faster
It’s never easy to get those extra funds when you’re running a startup, especially if your business is based on cryptocurrency. The use of big data made cryptocurrency much safer, which made investors feel more secure in placing their money with cryptocurrency-based startup companies. Additionally, the ability to track transactions and analyze them allows startups and large businesses to establish a more profound and long-term collaboration.