The blockchain sector has consistently emphasized transparency. Every public blockchain transaction is permanently stored, accessible to anyone with internet access.
However, given billions of transactions and hundreds of millions of wallet addresses, this vast transparency can be overwhelming. Without appropriate tools, it transforms from a clear ledger into a haystack concealing innumerable needles. This is where blockchain analytics plays a crucial role.
The latest episode of The Clear Crypto Podcast explores how blockchain’s profound openness has presented both opportunities and challenges, with artificial intelligence (AI) potentially being the key to unlocking insights.
The importance of analytics today
Blockchain data has been instrumental in tracking illicit activities, such as the recent dismantling of an international hacking group by South Korean authorities. It has also offered essential context during significant industry downturns, like the collapse of FTX.
As Alex Svanevik, co-founder and CEO of analytics platform Nansen, noted:
“Many individuals were using our product to monitor the funds in the FTX wallets. You could see in real time that despite SBF claiming they had halted withdrawals, money was flowing out of the exchange.”
For traders and institutions, analytics tools serve additional functions.
By tagging wallet addresses and tracing fund movements, these platforms enable users to track capital flow, observe major players, and identify any suspicious activities potentially affecting token prices.
Yet, the significant hurdle lies in usability. “I believe we are on the brink of a substantial evolution in product design,” he stated.
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“Users have traditionally relied on dashboards, investing considerable time in onboarding and training. The future of software will likely involve conversational interaction with the products.”
AI transforms the landscape
Even with advanced dashboards, understanding blockchain data has posed a steep learning curve. This is why the integration of artificial intelligence marks such a transformative advance.
Svanevik highlighted Nansen’s newly introduced AI-driven product that allows users to inquire about blockchain activity using everyday language.
“The future … will involve conversing with AI agents that can conduct research for you, providing a comprehensive assessment in just 20 seconds rather than spending an entire day piecing the data together.”
This is not merely a superficial change. By lowering entry barriers, AI-powered analytics democratize access to blockchain intelligence.
Retail investors, compliance personnel, and even casual observers can gain insights once reserved for specialized analysts.
Blockchain has long promised enhanced financial transparency, but that promise is contingent on the ability to interpret the data it generates. As Svanevik explained:
“We are essentially betting the entire company on the notion that users will prefer engaging with [the data].”
To listen to the complete dialogue on The Clear Crypto Podcast, tune into the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. Also, check out Cointelegraph’s full range of other shows!
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