How the decentralization state of crypto opens up a huge data pool and why this would change the user-data relationship? | by Siaw Hui | September 2022

Data from users for users

We’re all too familiar with the experience of feeling creepy seeing suggested recommendations on certain apps after a certain topic was discussed in a conversation (as if our smartphone is eavesdropping on us 24/7) & having an algorithm at work that floods us with problems related to our previous view/clock is not good.

Web2 technology companies collect our data for free and use it back on us – at the expense of our attention span, bombardment of ads and recommendations.

That’s it big Data In game.

In today’s digital world, abundance of data is akin to the new gold.

The irony of the users who produce the data is being sold to with this data being collected for free – with ads, content and whatever else the current world can make of this gold mine.

The familiarity that lies in the frustration of “skipping ads” and dopamine influx day in and day out – that is the gameplay of the current social media to the users.

For Web2 companies, what a time to live in – to be able to sit on top of such a large pile of a gold mine, to be able to hoard data from users and sell products/services back to them.

But like the grandiose idea of ​​big data changing the world, in reality data that we see today remains gated, behind every company that helps generate it.

As companies are obliged to act in the best interest of shareholder profitability while bearing the risk of breaching competition law, any form of partnership or collaboration with competitors is not in the interests of companies, resulting in them protecting their data as a form of competitive advantage.

So how can Web2 “big data” change things when availability and coverage remain missing from all the data pool we see today?

The advancement of technology, the use of smartphones and the addiction to social media have almost created the influx of digital data, especially about the behavior of individuals that was not possible a few decades ago.

The idea that big technologies like Google might know us better than ourselves sounds scary and interesting, but it’s only possible with many of their products being widely used in their respective domains.

But as much as Google is able to track certain data, they don’t have visibility into the bigger picture of inclusive transaction-based data like e-commerce transactions or banking data.

So this creates clusters of data that are neither available nor have the coverage to show the bigger picture of how each user, segment, industry or landscape is performing.

But what if there is data out there that can not only provide coverage or free availability, but can even provide real-time data that makes it even more valuable?

Crypto data that is transparent, accurate and real-time is only possible with blockchain, the underlying digital ledger technology that allows all the other crypto projects to be in or at least in the process of getting to the state of decentralized.

All applications running on Ethereum (the main dominant blockchain in the crypto space), will have their data captured on the Ethereum blockchain.

This means on-chain data.

On-chain data opens up a whole new path for the computing world, given that it is a free “gold” readily available for us to mine.

This data must be extracted and processed into easily readable formats. Ethereum ETL is an open source project that allows users to convert blockchain data into convenient formats such as CSV.

Transactions that occur on the blockchain will be captured on the chain, which is irreversible and transparent. In short, chain data will be able to provide data that was previously locked in each of the banks/institutions/companies such as:

• Transaction data between sellers and buyers
• Asset amount (bitcoin, ether, etc.) a user keeps in his wallet
• The amount of the asset that a crypto project has

Given that the crypto space has been thriving, having on-chain data that provides a bigger picture of how the landscape is performing will help users determine where they want to keep their assets and which project is working.

Below are some examples of data for each sector within the crypto space.

DeFi

Decentralized economy (DeFi for cards) has gained traction in the last 2 years, with 2020-2021 being considered DeFi Summer. The total amount of DeFi assets locked as of August 20, 2022 was $60.58 billion.

NFT

The year 2021 to the beginning of 2022 has seen the NFT (abbreviation for the non-fungible token) market garner enormous interest, adoption and development, thanks to gatherings such as Bored Ape Yacht Club, CryptoPunks or Azuki.

The boom in the NFT market has contributed to a massive influx of data about NFT transactions and NFT projects (ie minimum prices, transactions between users, the volume of a particular NFT project) and the next phase of NFT will affect the utility of NFT to a great extent.

GameFi

Play to earn or GameFi (abbreviation for Game + Finance) changes the way the game works as the game components can be converted into a crypto token, or winning games can result in earning crypto tokens, which can be sold for fiat.

In short, a game in crypto allows the withdrawal of benefits from the game ecosystem, which most Web2 do not practice.

GameFi saw a leap in adoption and interest through Axie Infinity, which acts as a revenue replacement during Covid-19, but the tokenomics for most GameFi is not sustainable and it will be interesting to see how the GameFi industry innovates in the next few years .

DAO

The DAO, which stands for Decentralized Autonomous Organization, has become a means of managing community, decision, voting and treasury funds within the group of communities in the most transparent way, as the fund and decisions are recorded on the blockchain.

This is exactly how we define bottom-up decision-making, as communities draft a proposed decision in a DAO and the communities vote to make it happen, rather than having a core team in a DAO decide everything.

Users’ transactions and asset data

The largest portion of data within the crypto space would be users’ transaction data, which contributed to all of the aforementioned datasets.

By looking at each user’s wallet, we are able to identify the assets they have accumulated and their activities. By understanding these two key components across the number of users, especially those with a large number of assets, we are able to gauge market interest.

Although all these data have proven that big data with transparency, accuracy and coverage is possible, however, data coverage in the chain is still not sufficient. The inclusion of all other data, such as weather data, economic data and economic data, will help provide the complete picture together with the data on the chain, creating a holistic view.

The most notable application that helps link this data together is Chainlink.

As big as on-chain data turned out to be, it’s a double-edged sword. The issue of privacy and security will be one of the most important barriers preventing individuals from adopting crypto.

The open world will inevitably push the privacy button. We are all used to having a centralized institution to manage our data, presumably it is safely guarded.

In reality, it is nothing but exposing ourselves to a huge risk, putting all our trust in the centralized institution to manage these data or assets

The constantly changing and developing crypto landscape is both exciting and challenging. The rapid pace of adoption and new innovation is pushing forward with potential solutions to solve all these problems that are mushrooming with all the innovation in the space.

We have seen that chain data exposes pretty much all sensitive data like your wallet information without revealing much about the users (unless you include the Ethereum name service token in your wallet). Of course, privacy concerns around this can make many (especially non-crypto individuals) uncomfortable, knowing that anyone can freely look into the wallet, which may deter them from adopting crypto.

CoinJoin is a strategy to provide anonymity and protect the privacy of Bitcoin users when they transact using a process called coin mixing on the Tor network. Supported wallets are Wasabi Wallet and Samourai Wallet.

Other wallets such as Sparrow Wallet and Mercury Wallet leverage different technology to push for stronger privacy and security for Bitcoin wallets.

Stealth addresses for NFTs on the Ethereum blockchain proposed by Vitalik Buterin, the co-founder of Ethereum, is a push for more anonymity in the space.

The implementation of anonymity in the crypto space To protect the users and at the same time push forward the value of transparency that suits the crypto culture is not an easy feat, but in the end it will unfold to see if the right balance can be achieved.