Why Data Scientists Love To Work with Blockchain Technology?

By Jyoti Nigania |Email | May 2, 2018 | 13014 Views

Data Science is a central part of virtually everything from business administration to running local and national governments. At its core, the subject aims at harvesting and managing data so organizations can run smoothly.

For some time now, data scientists have been unable to share, secure and authenticate data integrity. Thanks to bitcoin being overly hyped, blockchain, the technology that underpins it, got the attentive eyes of data specialists. Bitcoin touted the decentralized ledger as an open-source and transparent network that is secured by robust cryptographical calculations. 

Well, if we look at blockchain in regards to bitcoin, its implications to data science wears thin. However, if you look at it as a public distributed ledger for permanent record keeping and a system of contracts, you can see how it relates to big data analytics.
Here are some of the reasons that why data scientists are enticed by blockchain:

Fostering Data Traceability:
Blockchain is software that fosters peer-to-peer relationships. For instance, if a published account insufficiently explains a methodology, any peer can review the process and see how the results were obtained.
The ledger's transparent channels can help anyone know what data is reliable for use, where it came from, how to store it, who does the update and how to use it in an ethical manner. Simply put, it's possible to trace data on a distributed digital ledger from the entry point to the exit.

Real-Time Analysis:
Banks and other fintech organizations have a hard time analyzing data in real time. The ability to monitor changes in real time is deemed the most effective way to detect fraudsters.

For a long time, it was considered to be impossible to do that. Thanks to the distributed nature of blockchain, many companies can detect anomalies in a data base very early on. Being able to see data changes in real time is a feature we have all experienced in spreadsheets. Like the said method, blockchain too allows two or more individuals to work on the same piece of info in one go.

Generating Trust:
Trust is becoming a rare quality to find nowadays, especially where many responsibilities are left to biased central authorities. Putting too much power in the hands of systems with a single point of failure has always been regarded as dangerous.

Many companies don't allow other parties to use their data due to lack of trust. This makes information sharing nearly impossible. With trustless operations of blockchain, organizations can effortlessly collaborate by sharing a pool of information at their disposal.
Beyond the financial world, some countries like Venezuela have gone ahead to host blockchain-powered elections to avoid rigging and foster participatory democracy.

Easy Data Sharing:
An easy and smooth data flow can minimize setbacks or even prevent a business from stalling. Current paper records existing in offices are pretty tedious to work with, especially if vital data is needed somewhere else. Sure, the files can eventually reach the other department, but after an inconveniently long time, some copies can be edited and get lost in transit as well.

Data scientists are thrilled by blockchain due to its ability to provide many people access to data at once and in real time. This digital ledger is like a big pool with smaller pools where an individual with access is allowed to jump from one sub-pool to another. When information flows unrestricted to all parts, the administration process becomes streamlined.

Blockchain Improves Data Integrity:
Over the past few years, many companies have been focusing on increasing their data storage capacity. This has become a huge problem for many organizations and companies, since they harvest data from several centers. Even internally produced data or that pulled from government offices can be inaccurate. To add to that, other sources of data like social media can be completely erroneous.

Data scientists are now relying on blockchain to authenticate and track data at every point on a chain. Its immutable security is one of the main drivers for its adoption. This decentralized ledger protects data through multiple signatures, thus preventing data leaks and hacks.

For one to access information, the exact signatures have to be provided. If such a system was in place in 2015, perhaps the hack that saw 100 million-plus patient records getting stolen could have been stopped.
To make things a little bit more clear, here are some of the security attributes of blockchain in relation to data entry:

  • Encoded transactions: Blockchain employs complex mathematical algorithms to encrypt all transactions. The transactions usually exist as irreversible digital contracts between two parties.

  • Data lakes: Data scientists normally store organization info in data lakes. When the decentralized ledger is used to track the provenance of data, it's stored in a particular block with a specific cryptographic key. This means anyone utilizing this data has the right key from the data originator and hence the information is genuine, accurate and of good quality.
Confirmed Data Quality:
Blockchain info is encoded and stored in several nodes both private and public. Records are cross-checked and analyzed at the entry point before being added to other blocks. This in itself is a way of verifying data.

Data science is an ever-evolving field and will continue to evolve as companies and organizations strive to unearth new ways to run efficiently. With robust security and transparent record keeping, blockchain is set to help data scientists achieve many milestones that were previously considered impossible. Although the decentralized digital ledgers are still a novice technology, the preliminary results from companies experimenting on them, like IBM and Walmart, prove that they work.

Source: HOB