Comment by lumost | Hacker News Reader

Comment by lumost | Hacker News Reader

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You know, it's funny. I've worked in and around analytics for a long time now, and I've had the thought that blockchain enables the following.

1) A common "universal" transaction data source

2) A shared, readable format

So the thought occurred to me that as soon as blockchain apps/currencies became popular, people would want analytics on them. There would thus be a startup opportunity for unprecedented analytics visibility into transactional data from a third party without needing to build bespoke integrations into high security/compliance systems.

If a blockchain backed currency was widely used, a third party could easily estimate the real-time sales flow of every brick and mortar store location. You could have real-time auditing and quarterly tracking of both public and private corporations available from a third party. Asset transfers, smart contracts, and their real world equivalents could be instantly monitored - allowing the early detection of emergent supply chain bottlenecks.

The problem with all of this is that in the 5 years since I had this idea, the only use cases for BTC and other cryptos has been price speculation. The market for such analytics products is effectively zero.

Blockchain analytics are a big sector. Companies like Coinbase and Binance have spent billions acquiring blockchain analytics firms.

Additionally, I think there is big money in selling blockchain analytics to governments for the money laundering, darknet markets, and fraud sector.

https://www.coindesk.com/markets/2019/02/19/coinbase-acquire...

https://www.coindesk.com/business/2021/04/30/coinbase-to-acq...

https://www.cnbc.com/2021/09/09/mastercard-to-buy-blockchain...

https://www.coindesk.com/markets/2019/12/03/binance-acquires...

There is no future in third party analytics because any "blockchain" that is globally adopted and used for more than shitcoin speculation will be zero knowledge

What do you mean, “will be zero knowledge”? How does that apply to a blockchain in a currency context, when validating a new transaction requires knowledge of both parties’ transaction history?

With zero knowledge proofs, you do have their transaction histories, and you can verify that they are consistent, you just can't tell who the parties are or the values they're transacting

Making all their real-time sales data public, and thus available to their competitors, doesn't seem like something most companies would want.

If the blockchain does enable this, wouldn't that just lead either to 1) companies not adopting blockchain, or 2) some solution for hiding the data and defeating third-party analytics?

Possible, however having this data available makes accounting, and taxation trivial. Money laundering, fraud, theft, and other illegal activities also become extremely difficult to hide.

Which is to say that investors, governments, financial institutions, and small businesses unable to afford external auditing and accounting probably want this capability more than individuals. I'd argue that our current lack of financial transparency may be more of an artifact of banking technology limitations rather than an intrinsically desirable property.

You were right, blockchain analytics was a great startup opportunity and there are already a bunch of companies, like Glassnode, doing blockchain analytics.

You also seem to be missing a lot of interesting stuff happening with cryptos if you think it's exclusively price speculation.

GlassNode's tagline is "Time crypto market tops and bottoms.", I don't doubt that simply analyzing the exchanges is a valid market. But not one that I think is particularly large, particularly not when the exchanges can add their own analytics at any point.

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