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ICO data: How blockchain can augment data management

 

ICO data


Blockchain technology, the supposed panacea for an inordinate list of problems that are hindering growth in many sectors, has numerous applications in scores of industry sectors that range from cross-border payments to the augmented sale of securities.

But one of the more direct and feasible application is leveraging the technology to augment data storage and management technology. For proof, try searching about patents filed in various data management and storage functionality applications.

You’ll come across various news pieces about top tech companies such as IBM that are leveraging blockchain technology to solve very complex technical problems like data management in autonomous vehicles.

The surge in patents related to data storage and management using blockchain indicates one thing for sure, this specific application is very much feasible right now and could have profound impacts in real-time. Which is probably why companies are scrambling to get the first mover advantage. The same can't be said for the various use-cases being proposed like for example using blockchain technology to augment Artificial Intelligence! The technology just isn't that advanced just yet. So what are these  applications that could have real-time impact?

But before we dive into that, it’s important to understand what Blockchain technology is. Pro-readers may skip this section.

The basics of Blockchain
It may come as a surprise to you but blockchain technology was created almost a decade ago.

The technology itself isn’t that new. It came into the limelight once industry leaders realized it’s potential outside the Financial ecosystem as intended by its alleged creator, Satoshi Nakamoto.

Very briefly, blockchain’s innovative characteristics can be summed up in a few technical terms:

  • Blockchain is a decentralized and distributed digital ledger of economic transactions, which is secured using cryptography.
  • A blockchain is a network of computers that are constantly communicating with each other. The decentralized nature of blockchain comes from this aspect of the technology, the fact that there are no central servers or computers handling the information being processed.
  • The information is encrypted and stored in stacks called blocks and each block can hold a specific number of transactions. Each block is also linked with each other, also known as chains. Hence the technology gets its name Blockchain.

The numerous computers or nodes on a blockchain network are constantly communicating with each other, verifying the credibility of each transaction. If the data on a node gets manipulated, it’s picked up by the other nodes on the network, thus the data stored on a blockchain network is ‘immutable’ or ‘tamper-proof’.

Blockchain in data storage and management?
The inherently decentralized nature of blockchain, combined with the cryptographic techniques being employed means that it’s very suitable for data storage.

For starters, it’s incredibly difficult for hackers to hack into a blockchain network, as mentioned earlier, any data manipulation is picked up by other nodes and encryption makes it difficult to figure what the data actually represents. This means that data stored on a blockchain network is inherently resistant towards data manipulation and is its incredibly difficult for it to get hacked.

Note that I used "Incredibly difficult" and not impossible. As opposed to what many believe, blockchain networks are "hackable" in what is known as a "51% attack", where a hacker gains control over the majority of nodes on a blockchain network.

Amidst the numerous data leaks and scandals that surfaced during the past few years, secure data storage and management that minds user's privacy is the holy grail of the digital era. Which is why IBM and other tech giants are dipping their toes into this space but   they are not alone.

Numerous startups  have realized this potential as well and aiming to bring cutting edge blockchain solutions to the market. And  these startups have collectively raised a whopping $200 million to date (data source) through Initial Coin Offerings! 

Top companies by funds raised

ICO data


The top 5 players in the blockchain based data storage have collectively been able to attract an impressive $145 million, which is almost 73% of the total funds raised by companies through ICOs in this space.

The huge disparity in funds raised is a clear indication that some companies are preferred by investors over others, and this could be due to a technical advantage or a more attractive business model among various other reasons.

Moving onto how these companies plan to use blockchain to augment data management.

Here are the top ways:

  • Decentralized data storage is a hot field right now with companies enabling people to earn an income by renting out their extra storage space. Considering the fact that the cloud storage market is expected to reach $88 billion by 2022 (source), decentralized data storage is likely to see an upheaval in the coming years.
  • Decentralized data storage has several advantages over traditional methods. Such as increased security against cyber attacks. This type of data storage employs a cryptographic method known as sharding, which breaks apart the original data into smaller chunks and these chunks are stored on different nodes. On top of this, the data is also encrypted with a private key which adds on an extra layer of security.
  • Cloud based decentralized data storage could also witness faster data transfer rates than traditional methods.

Challenges to overcome
While the decentralized data storage holds great potential and could have helped avoid infamous cases such as the Facebook-Cambridge Analytica data scandal. The technology isn’t there yet, there are still several issues related to scalability and efficiency.

For example, current centralized cloud data storage solutions are currently much more optimized for speed and efficiency and have the economies of scale on their side.





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