Blockchain. This new technology is changing the way transactions are recorded and verified, and it’s leading us into a new era with enticing promises: smart contracts, shared ledgers, immutable data records, and blockchain analytics.
There are so many different ways to use this innovative blockchain analytics. Who wouldn’t want to know all about these amazing possibilities?
This article will introduce you to the basics of blockchain analytics.
What is Blockchain Analytics?
💡 Blockchain analytics is the process of examining data for tracking, monitoring, and analyzing data that has been registered onto a blockchain. In order to track and analyze data, you will use blockchain analytics tools to follow the trail of the data. This will let you know where the data has been and what changes have been made.
Blockchain analytics can be used to solve many real-world problems – it could identify trends by focusing on what happened in the past, explaining what is happening now, and preparing for what is expected to come in the future.
For example, it could be applied towards securing supply chains, ensuring elections votes are valid or storing health records, so they’re readily available when needed most – all while safeguarding sensitive information, and more.
Why use Blockchain Analytics?
Building and executing analytics models on blockchain data will benefit organizations by helping them react, understand, prepare, and lower their risk of error. Organizations can use this data to optimize their operations.
- Secure Transactions – One of the most popular use cases for blockchain analytics is securing transactions. This can be both financial and non-financial transactions. By logging data onto a blockchain, you can make sure that the data is valid and can’t be tampered with.
- Improved Traceability – In many industries, especially food safety, it is crucial to track the source of products. Blockchain analytics can help to improve traceability. This can be used to track food items through supply chains, trace the origins of diamonds, and more.
- No Single Point of Failure – One of the most important things about a blockchain network is that there is no single point of failure. The whole network is resilient and secure. Because of this, blockchain analytics can help to make sure that your data isn’t compromised.
- Transparency – Another great thing about blockchain analytics is that it promotes transparency. This can help to boost trust between organizations and customers alike.
Blockchain analytics tools
The most important part of any blockchain analytics project is having the right tools. Without them, the process will be slower and less productive. There is no one-size-fits-all solution when it comes to blockchain data analysis, so it’s crucial to define your project’s requirements and select the best tools for the job.
Here are 10 common tools that analysts use for blockchain analytics:
#1 – Anaconda
Anaconda – The Anaconda environment makes it easy to manage packages and deploy data analysis. With Anaconda, you don’t need to use pip to install various libraries one by one.
Anaconda starting page:
#2 – Visual Studio Code
Visual Studio Code – The code editor is extremely functional and developer friendly. It is freely available and can be used to improve quality.
Visual studio code running in Ubuntu with custom complements:
#3 – Jupyter Notebook and JupyterLab
Jupyter Notebook and JupyterLab – Interactive programming is made simple with Jupyter Notebook and JupyterLab. These open-source tools provide support for many languages and are easily accessible via the Anaconda Navigator.
Both Jupyter Notebook and JupyterLab are web applications that allow users to build and populate models in a shared environment by using notebooks.
Screenshot of Jupyter Notebook, showing a widget to calculate the matrix:
#4 – Web3.py
Web3.py – To interact with the data in the blockchain, you need a blockchain client. One option is to use web3.py, an Ethereum-based blockchain client, which allows you to access data stored on the blockchain and manipulate it according to your needs.
Due to each implementation being unique, it may take some time getting used to this particular environment – but once an understanding of the concepts has been achieved, assimilating into other environments will be simple enough.
Besides web3.py there are many different options for various types of blockchains.
web3 in PyPI:
#5 – Database management system (DBMS)
Database management system (DBMS) – In some instances, you will require the extract the data from a blockchain and store it in a high-performance DBMS before querying it.
In this scenario, you could create your own extraction scripts or use open-source products such as EthereumDB which stores the extracted information in SQLite databases or
Ethereum-etl where you can customize what type of data to extract from Ethereum.
Screenshot of EthereumDB (https://github.com/validitylabs/EthereumDB) and Ethereum-etl (https://github.com/blockchain-etl/ethereum-etl):
#6 – Infura
Infura – to access Ethereum networks in a scalable way without the need to set up your own nodes to gain all of a blockchain’s data, Infura allows you to focus on building analytic models.
Infura page landing screenshot:
#7 – Vaex
Vaex – to analyze very large blockchain datasets in Python you can use Vaex, an open-source library that allows one to write code for exploring and visualizing datasets bigger than your computer’s memory.
Vaex pypi screenshot:
#8 – Blockchain Explorers
Blockchain explorers – There are many different blockchain explorers available that allow you to easily find the data you need for your analytics projects.
Some popular options include Etherscan.io for Ethereum and Blockchain.com for multiple blockchains. ColossusXT is also a great option if you’re looking to explore cryptocurrency transactions.
What Does a Blockchain Analyst do?
As a blockchain analyst, your primary responsibility will be to analyze the data logged onto the blockchain. You will need to inspect, catalog, and interpret this data to glean actionable insights.
Some examples include:
- Using analytics tools that scan through financial transactions- which could mean you are spot on with what block analytics does! One of the main goals is to monitor transactions to identify potential fraud or find out if someone has hacked into secure information.
- Working with IoT (Internet of Things) applications that produce and consume data; many companies working with IoT space look to leverage the power of blockchain technology so that all IoT devices can work more securely and autonomously.
- Ensuring authenticity – some businesses looking for ways to implement blockchain technologies because they want higher visibility, increased consistency, and greater autonomy within their own supply chain operations. Using an analytical model means having insight into how any kind of data originated– who originally owned it? Who modified it over time? If any modifications were coordinated?
- Ensure document integrity – in areas where documents should not be able to be altered, such as legal and healthcare industries, blockchain can help make documents and changes to them transparent, immutable, and accessible to the owner of the data. Analysts need to provide models which show that corruption will be minimized with Blockchain because it ensures document integrity.
- Tracking supply chain items – with blockchain is easier to track items along the supply chain both forward and backward. Many types of analysis are easier than traditional data stores.
- Do predictive analysis – by building several models, you can predict future behavior on past observations. This is often one of the goals of an organization’s analytics projects
- Empower business strategy – by analyzing the results of models, companies can fine-tune their strategies, so they stay competitive in today’s ever-changing market.
- Analyzing real-time data – analysts are observing blockchain data changes in real-time which increases the potential for fast decision making.
Ethviewer screenshot offering real-time monitoring of Ethereum Blockchain (https://ethviewer.live):
Earning Potential of Blockchain Analysts
There is a growing demand for blockchain analytics, which presents a great opportunity for analysts in this field. Salaries for blockchain analysts are very competitive, averaging at $110,900 per year according to Ziprecruiter.com.
The potential earning power in this field is significant, with salaries ranging from $30,000 to $200,500. Most analysts earn between $67,500 and $146,500 annually.
As a blockchain analyst, your salary will be determined by your qualifications and experience. If you have the necessary skills and experience, you could earn up to $150,000 or more. The location where you live also plays a role in how much you can earn.
🌍 Recommended Tutorial: Blockchain Developer — Income and Opportunity
Skills Required for Blockchain Analysts
- Communication Skills – As a blockchain analyst, excellent communication skills are essential. You will be working as part of a team and need to be able to communicate effectively with your team mates and other stakeholders.
- Analytical Skills – Analytical skills are important for blockchain analysts. Being able to understand and interpret data is crucial to make accurate predictions and recommendations.
- Programming Skills – To be a successful blockchain analyst, it is important that you can code in Python, SQL, and R. Additionally, you will need to be familiar with various tools to interact with the blockchain. While some data providers require no coding or very little coding, training may still be necessary.
Blockchain analytics is an exciting field that is growing quickly. It offers a wide variety of use cases across different industries. It has great potential to solve real-world problems. The demand for blockchain analytics is expected to rise as more companies and organizations adopt blockchain technology.