Open Data: The Unfulfilled Promise of Blockchain

Since
its
advent
over
a
decade
ago,
blockchain
technology
has
made
grand
promises
of
decentralization,
disintermediation
and
radical
transparency.
Underpinning
such
visionary
rhetoric,
however,
lies
a
sobering
reality:
Much
of
the
wealth
of
data
generated
on
public
blockchains
remains
sealed
off
from
average
users.

As
blockchain
adoption
accelerates
across
finance,
supply
chains,
governance
and
more,
we
as
an
industry
must
reflect
on
whether
we
have
truly
delivered
on
the
technology’s
core
values.

Jim
Myers
is
CTO
and
co-founder
of
Flipside
Crypto.

Public
blockchains
were
conceived
as
open
ecosystems
where
participants
could
interact
without
centralized
gatekeepers.
Transactions
occurring
on
these
transparent
ledgers
unveil
ground
truths
about
economic
activity,
user
behavior,
adoption
curves
and
other
dynamics.

Yet
while
the
ethos
of
blockchain
is
openness
and
accessibility,
the
current
asymmetry
in
information
access
can
be
glaring.
On-chain
data
analytics
—
the
lifeblood
of
informed
decision-making
—
remains
predominantly
siloed
in
private
platforms,
behind
paywalls,
illegible
to
the
average
reader
and
largely
beyond
reach
of
regular
users.

There
are
numerous
examples
of
how
existing
analytics
platforms
offer
powerful,
consequential
insights
into
on-chain
data.
In
February
2021,
the
U.S.
Department
of
Justice
(DOJ)
announced
that
it
had
recovered
over
$1
billion
worth
of
bitcoin

(BTC)
related
to
the
Silk
Road,
a
dark
web
marketplace
shut
down
in
2013,
thanks
to
on-chain
data
from
Chainalysis.

See
also:



How
a
Bitcoin
Mixer
Laundering
Conviction
Might
Be
Appealed

Additionally,
metrics
tracked
by
platforms
like
Skopenow
could
have
helped
foresee
the
FTX
implosion
before
it
impacted
hundreds
of
thousands
of
crypto
holders.
While
it’s
impressive,
it
still
falls
short
of
blockchain’s
promise
of
making
data
openly
accessible.
These
are
premium
services
that
aren’t
available
to
the
average
person.

This
isn’t
to
say
that
existing
analytics
platforms
should
not
offer
paid
offerings
and
premium
subscription
plans.
Even
mission-driven
businesses
exist
to
make
money,
and
when
it
comes
to
data
services
there
will
always
be
a
subset
of
customers
who
have
more
sophisticated,
resource-intensive
demands.

To
that
end,
a
platform
can
allow
free
users
to
manually
query
data
and
create
public
dashboards
that
the
rest
of
the
Web3
community
can
view
and
benefit
from.
And
for
serious
commercial
users,
these
platforms
could
offer
paid
subscription
tiers
that
provide
a
more
powerful
suite
of
tools,
such
as
programmatic
access
to
data,
priority
API
queries
and
the
ability
to
connect
to
third-party
tools
like
Tableau
and
Power
BI.

Additionally,
analytics
platforms
can
create
programs
that
reward
community
members
who
leverage
their
free
data
to
benefit
their
broader
user
base.
These
platforms
can
harness
the
collective
intelligence
of
thousands
of
analysts
who
act
as
bridges
between
the
complex
world
of
on-chain
data
and
the
wider
public,
incentivizing
high-quality
contributions
through
collective
ownership
and
exploration.

See
also:



Crypto
for
Advisors:
Cryptocurrency
Transparency
Truths

While
this
may
be
an
ideal,
mutually
beneficial
arrangement,
there
are
even
simpler
ways
to
sustainably
provide
free
data
to
users.
Platforms
could
incentivize
users
to
perform
micro-tasks
such
as
data
validation,
anomaly
detection
and
content
curation
in
exchange
for
access
to
premium
data
or
analytics
tools
—
or
simply
provide
time-banked
or
ad-supported
access.

All
of
which
is
to
say,
there
needs
to
be
an
attempt
to
better
marry
commercial
interest
with
the
public
good
of
allowing
open
on-chain
data.
Without
a
comprehensive
perspective,
researchers
cannot
accurately
map
patterns,
entrepreneurs
cannot
identify
the
most
pressing
needs
and
legislators
cannot
write
intelligent
policy.

Innovation
suffers
as
no
single
analyst
can
match
the
collective
intelligence
of
global
crowds.
The
credibility
of
the
crypto
industry
at
large
suffers
each
time
flawed
assumptions
and
analyses
remain
unchallenged.
Without
critical,
verifiable
data
that
can
be
easily
digested,
the
public
perception
of
crypto
being
only
for
money
laundering
will
remain,
despite
the

evidence
that
cash
is
still
king
for
criminals.

The
solution
to
misinformation
and
opacity
is
straightforward
in
principle
—
the
community
must
come
together
and
treat
on-chain
data
as
the
public
good
it
was
always
meant
to
be.
This
means
on-chain
analytics
platforms
should
strive
to
make
their
core
data
more
accessible
to
all
rather
than
arbitrarily
gated.

After
all,
transparency
does
not
simply
relate
to
how
value
moves
on
blockchains
but
who
can
access
information
about
that
movement.

Collaboration
with
blockchain
networks
can
provide
alternative
revenue
streams
for
analytics
platforms.
Value-added
services
can
still
be
reasonably
monetized
for
intensive
commercial
use-cases.
But
the
baseline
on-chain
data,
the
fundamental
transactions
occurring
across
blockchain
networks?
Open
and
accessible
by
default.

See
also:



Transparency
and
Security
Versus
Financial
Freedom


|
Opinion

Unfettered
access
to
on-chain
data
confers
collective
benefits
that
extend
far
beyond
fairness.
It
would
allow
global
talent
to
pressure-test
assumptions,
clarify
misconceptions
and
enrich
systemic
understanding.
Such
transparency
and
critical
analysis
may
attract
skeptical
institutional
players
towards
crypto’s
vision
for
the
future.

We
have
plenty
of
real-world
examples
of
the
benefits
of
open
data.
Particularly
with
blockchain.
When
COVID-19
disrupted
global
supply
chains,
the
value
of
blockchain
solutions

became
clear.
Companies
that
had
implemented
blockchain
technology
proved
resilient.
Companies
enhanced
transparency
and
traceability
in
their
supply
chains
while
also
cutting
down
on
administrative
expenses.

Fundamentally,
those
in
the
industry
don’t
need
to
be
preached
to
about
blockchain’s
inherent
transparency.
The
problem
is
that
the
value
offer
isn’t
fully
understood
by
everyone
else.
But
to
truly
tap
into
its
benefits,
we
need
open
data
access
to
allow
everyone
else
to
directly
evaluate
blockchain’s
real-world
efficacy
instead
of
trusting
the
word
of
a
NFT
PFP
on
Twitter.

If
crypto
is
to
serve
as
the
gateway
to
web3
we
envision,
then
onchain
data
must
be
freely
visible
through
that
gateway
to
all.
The
choice
is
clear,
as
is
the
monumental
opportunity
at
hand.
The
question
that
remains
is
whether
the
industry’s
actions
will
live
up
to
its
promises.