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Crypto and Big Data

Mar 4, 2024
11 min read

This blog post will cover:

  • Big data explained
  • The reciprocal benefits of blockchain and big data
  • Big data crypto projects 
  • Challenges and future areas of development

We are living in the age of information: large amounts of data became something that made the world truly incorporated. That is why big data has the potential to completely transform pretty much every industry out there. Blockchain technology and cryptocurrencies are the spheres that both benefit from further advancement of big data and contribute to it at the same time. 

Today, we are going to explore the intricate relationship between crypto and big data. 

Big data explained

The vast and complex datasets that surpass the capabilities of traditional methods of processing information are called big data. These datasets encompass diverse information types, from structured to unstructured, that are analyzed extremely fast. 

Three key characteristics of big data are sometimes called 3Vs:

  • Variety: various kinds of analyzed data; 

  • Volume: quantity of information; 

  • Velocity: the processing speed. 

Big data and artificial intelligence (AI), similarly to crypto and AI, are closely intertwined, because big data gives the extensive datasets needed to train AI algorithms effectively. 

AI utilizes these datasets to find patterns, make predictions, and automate decision-making processes. Simultaneously, big data technologies facilitate the processing, analysis, and optimization of extensive and intricate data sets. This collaboration enhances insights and improves decision accuracy across many domains.

The reciprocal benefits of blockchain and big data

Using blockchain together with big data allows mitigating some of the negative aspects connected to both technologies. Blockchain's decentralized and tamper-resistant features ensure that data stays secure and intact, minimizing the chances of unauthorized access and tampering.

Moreover, the incorporation of smart contracts brings automation to enforce rules in big data transactions. This streamlines processes and diminishes the potential for errors or disputes.

On the flip side, big data analytics enhances blockchain applications by providing useful insights. This helps understand how users behave, find trends, and make processes in blockchain networks work more efficiently. Also, big data technologies assist in making the storage of data on the blockchain smaller and more efficient, dealing with worries about block size and boosting its overall performance. Big data tools also make it easier to process data in real-time on the blockchain, making decisions faster and more responsive in decentralized applications.

The joint efforts of blockchain and big data create a strong partnership that could change the way we handle and secure data.

Big data crypto projects 

Several innovative crypto projects leverage big data to enhance their functionalities. For instance, DeFi platforms utilize big data analytics to assess risk, streamline lending processes, and optimize investment strategies. Here are a few examples of the collaboration of crypto and big data:

  • The Internet Computer. is a blockchain-based network designed to function as a World Computer, containing smart contracts and large amounts of information securely. Utilizing a multi-subnet architecture, it employs canisters, each with its own isolated storage, hosted on subnets that act as independent blockchains. The replication of code and data across nodes ensures fault tolerance through the Internet Computer Protocol (ICP). 

  • NEAR Protocol. NEAR Protocol introduces the NEAR BigQuery Public Dataset, offering a user-friendly and cost-effective solution for real-time blockchain data querying. This dataset simplifies the process by providing easily accessible and cleansed blockchain data, allowing SQL queries without the need for custom indexers. The NEAR LakeHouse in Databricks further supports the transformation of raw data into enriched tables, subsequently accessible in the GCP BigQuery Public Dataset.

  • Injective, a blockchain based on Cosmos, seamlessly integrates elements of AI with DeFi. In collaboration with Big Data Protocol (BDP), Injective has developed structured data token products. This partnership enables users on the Injective platform to participate in creating and trading data derivatives linked to the BDP Data Market. This functionality facilitates the trading of tokenized data futures with leverage and the establishment of new derivative markets.  

Challenges and future areas of development

While the collaboration between cryptocurrency and big data holds significant promise, it is not without its challenges. One notable issue arises from the substantial amounts of data necessary for functioning of both blockchain and big data processes. The main challenge is making sure the system can handle the growing amount of data and transactions. If it cannot scale up properly, it might take longer to process transactions and end up costing more.

Another important aspect is that big data relies on high-quality, reliable data. To trust the data on a blockchain, we need careful procedures to check and include it in the ledger. If the data is not trustworthy, it could undermine the benefits of using big data analytics.

Also, the laws and regulations around cryptocurrencies and blockchain technologies are still changing. When we bring big data into blockchain, we need to follow the rules of protecting data and dealing with money. This brings challenges related to following the law and dealing with legal matters.

Looking ahead, the partnership between cryptocurrency and big data is set to change various industries. As data analytics get better and blockchain keeps evolving, we can expect new ways to have secure, clear, and efficient transactions.

As the rules become clearer and technology keeps improving, combining cryptocurrency and big data might become a crucial part of the next stage of the digital revolution. This could impact areas like finance, healthcare, and how supply chains are managed.

In conclusion, the coming together of cryptocurrency and big data shows a big change in the digital world. If we tackle challenges and work together, we could create solutions that are stronger, more transparent, and fair for both businesses and users.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

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