By Mayank Singhal, MBA 2019
It’s hard to remember what it was like before ‘analytics’ became such an important function within an organisation. According to Google Trends, the term started receiving interest as a search term in November 2005, and reached its peak in November 2011. During that time, the number of requests that Amazon S3 processed increased by ~150x and storage costs reduced dramatically. At its core, the ability to migrate infrastructure to the cloud and store large amounts of data made it possible to achieve significant business benefits via analytics within an organisation.
Permissionless blockchains (e.g. Bitcoin, Ethereum) are making it possible to achieve significant business benefits via analytics when transferring value to anyone. As blockchain development, experimentation and adoption continues, this will lead to some very interesting possibilities across all industries.
How can analytics be valuable within the Bitcoin ecosystem?
Bitcoin’s vision is to provide a mechanism to conduct payments and peer-to-peer transactions with no central authority or banks. By utilising a permissionless blockchain, the network is able to validate transactions at a low-cost without the need to trust anyone through miners. This has profound effects once you realise that this was not possible before blockchain technology was invented (e.g. credit cards, checks, cash all rely on trusted intermediaries).
A common misconception about Bitcoin is that it is an anonymous blockchain – meaning you can transact on the platform anonymously. This is not true. Instead, Bitcoin should be thought of as a pseudonymous network. If someone is able to identify your public key, they are able to find all of the transactions you have made using it (the person you transacted with would still be anonymous unless they can identify their public key as well). As a result, companies have emerged (e.g. Chainalysis, Neutrino) to help regulators and financial institutions conduct AML/KYC checks on-chain through analytics. This has the power to save significant costs and pave the way for solutions to analyse flows of cryptocurrencies across blockchains.
How can analytics be valuable within the Ethereum ecosystem?
Unlike Bitcoin’s vision for modernising payments around the world, Ethereum has a much broader vision: to build unstoppable applications through a decentralised platform that runs smart contracts. Smart contracts are programmed contracts (e.g. crop insurance, investment tokens, prediction markets) that run without the ability to be manipulated or experience downtime. This has profound implications in any industry that relies on significant manual processes or reconciliation – clearing & settlement of stocks, processing insurance claims and trade finance are emerging as strong areas of exploration.
Companies have emerged to make it easy to analyse these smart contracts and get the insights you need. For example, Dune Analytics has developed a product that enables their clients to query Ethereum blockchain data using SQL. Elementus aims to index all non-private blockchains, similar to how Google indexes the Internet, which will enable users to search and navigate the Internet of Value. Their website claims that their technology has the ability to lower costs, conduct due diligence and derive business intelligence. A number of investment-focused analytics platforms have also emerged including Santiment and Glassnode.
The LBS Blockchain community
Outside of the classroom, the LBS Blockchain community within the Tech & Media Club offers a number of exciting series to learn more about the technology. At the start of the calendar year, the team hosts an educational series in partnership with London Blockchain Labs that will equip you with a strong understanding for how the technology works. Afterward, the team hosts a number of blockchain leaders on-campus for exciting discussions about the latest developments – past speakers include leaders from Coinbase, JP Morgan, Circle, HSBC and Galaxy Digital.
As well as this, the new programme for Early Careers students, Masters in Analytics and Management (MAM), couples analytics with management at its core, preparing you to work within this rapidly-growing space. The MAM combines Data Visualisation and Story Telling, Machine Learning for Big Data, and Decision Technology, equipping you with the skills necessary to support blockchain transformations at organisations around the world. Find out more here.