The legitimacy of cryptocurrencies is under constant threat from bad actors. Wash trading is a huge issue, for example, and is widespread in NFT sales: one high-profile case was exposed on a popular marketplace where 94% of $2 billion transacted was proved to be wash traded.
How did we find out about it? An NFT analytics site examined blockchain data over a period of eight days. No small undertaking, but a highly valuable service that should become commonplace if the industry is to foster trust.
Analytics and data aggregation firms are thus primed to become mainstays of the space by providing vital information on what is really happening on blockchains. In their absence, critics and regulators have been well justified in expressing doubts over the burgeoning technology.
Business applications will proliferate, too, as evidenced by major moves coming out of Chainlink (LINK). Last year, the company announced a partnership with news organization Associated Press to make its datasets available to leading blockchains, where data can be used to automate key processes that happen on-chain.
Whether informing markets of election race calls, triggering an on-chain trade when a company’s quarterly financials are released or even augmenting the appearance of NFTs based on real-world events, there is significant scope in this one partnership. Applied to the entirety of the business world across multiple industries, there could be a gigantic shift in the use of data.
Good Information
Properly collated and well-analyzed data holds the potential to weed out dodgy companies and individuals and stop them from fulfilling nefarious goals. In theory, blockchain data is available to the public. It follows that anyone can do the work themselves. Practically speaking, this isn’t feasible because your average vigilante or even nascent analytics company lacks the technology to create vast datasets at a pace in a scalable manner.
Knowing exactly what is needed in data terms is a…
