Banking / Finance

Why big data needs the benefits of blockchain

29th Jun `17, 11:00 AM in Banking / Finance

Big data and blockchain are two technologies that are expected to transform the way we do business the…

Megan Ray Nichols
Megan Ray Nichols Contributor
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Big data and blockchain are two technologies that are expected to transform the way we do business the coming years. They’re powerful on their own but even more so when combined. Here’s why big data needs the benefits that blockchain provides.

What Is Blockchain?

The blockchain was originally created for Bitcoin, a digital currency, but today a variety of industries are finding uses for this new technology.

A blockchain is a ledger like an Excel spreadsheet, but it has some special qualities that make it potentially game changing. If someone wanted to edit a spreadsheet on most modern networks, they would must pull it from the location where it’s being stored, edit it and then send back the newly edited version to its storage location. While that document is being edited, no one else can access it.

With a blockchain, the document isn’t stored in one centralized location. It’s stored and owned in a distributed way by all the nodes in a network. Everyone in the network can see when changes are being made, and nothing can be altered without the approval of every member of the network.

The Benefits for Big Data

This new method for managing information has several benefits. The process is much more transparent because nothing can be changed without the approval of every server in the network, everyone can see what changes are being made and there is no one authority who controls information.

Blockchain has been used for financial purposes because it makes it much more difficult for mistakes and fraudulent transactions to occur.

Every transaction that occurs on a blockchain network is encrypted and time stamped. They can’t be tampered with once they’ve been created and often occur automatically, which enhances security even further. Since the worldwide cost of cyber crime is expected to grow to $2 billion by 2019, this is extremely important.

Blockchain leads to higher quality data. In a more traditional network, there are multiple points at which someone could enter information incorrectly, files could become corrupted or other issues could occur.

With this new technology, there is no single weak spot that can damage a document. There is one document that’s shared by every node. If one user makes a mistake, it won’t be recorded because the other servers will override it.

Because every node in a network shares information, it will also be much easier to access it. With today’s big data technology, it can often be difficult to get a full picture of the available information because it has to be collected from multiple locations.

Blockchain networks allow every member of a network access to all data, which allows everyone to get a clearer picture of data and reach better analytical conclusions.

Implementing Blockchain

While blockchain is quite an exciting technological development, and this is expected to be a big year for the technology, it will likely take a while for it to be implemented. It will require new infrastructure and retraining staff to use the technology.

Of course, implementing blockchain also means convincing those in charge that investing in the technology is worth it. There is an upfront cost, but implementing it could result in long-term financial savings. It’s been estimated that blockchain could save financial companies up to 30% of their back-office costs, which comes out to about $16 billion across the industry.

To implement blockchain, a company should explore which areas the technology should be used for to get the most customer benefit. Smaller companies will then look to an outside company to implement it for them, or, if they the resources, build it internally. A budget, implementation schedule and training program for using the technology must then be established.

Thus far, only a few innovative companies in a few industries have adopted blockchain technology. By starting to prepare for the new technology now, any company can be ahead of the curve.

Experts believe that blockchain could be a gamechanger in the world of tech, which affects almost all industries, and preparing for the change now could help any business become a leader in tomorrow’s world.

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