Blockchain data could be the next big thing in Web3
Permissionless access to data is one of blockchain’s most prominent promises; the idea that anyone anywhere can access and make use of data whichever way they want without requiring the say-so of a centralized entity. That could be access to real-time transaction information to make investment decisions based on the moves of whales (the crypto industry’s term for large investors). In theory, all that’s needed is to plug into the blockchain protocol of interest by setting up a node—essentially a computer that runs the blockchain’s software.
To appreciate how disruptive permissionless access to data is, consider how gaining access to the real-time transaction flow of the largest stock investors would work. In the United States, for example, an exchange such as Nasdaq will need to give you (or a third-party data provider) access to such data. The exchange has the right to decide who receives access and who doesn’t—and at what cost.
With blockchain, no one gets to make that call. The barrier to entry here is limited to the cost (both monetary and non-monetary) of setting up a node.
However, running nodes isn’t the most efficient way for most businesses to access and use blockchain data—especially for legacy companies looking to enter the Web3 space, said Tom Tirman, the cofounder and CEO of Parsiq.
Parsiq is a blockchain data infrastructure startup.
“Consider a traditional investment data provider who wants to start offering crypto data,” Tirman said. “Their preference would be to have access to structured data that can be processed and presented to users without adding the extra operational and technical layer of running their own nodes.”
The added operational and technical layer that Tirman referenced multiplies if the service provider intends to provide data from more than one blockchain network. That’s where blockchain data service providers come in.
“I think, with where we are right now in the adoption curve, blockchain data is the next big thing,” he added. “As applications are being built, as Web2 companies slowly start adopting blockchain, everyone needs a place to build their backend—a way to source their data.”
Parsiq, which launched in 2018 by offering real-time blockchain monitoring, recently launched its flagship product dubbed the “Tsunami API.” The product provides historical access to data across a few blockchain protocols, including Ether
ETH
AVAX
BNB
MATIC
BTC
“In addition to real-time monitoring, the Tsunami API provides an indexed history of all these blockchains from the very first block, the genesis block,” said Tirman. “And now, in milliseconds and with a simple query, any team building on blockchain can go back in time and collect any data they want, whether they want statistics, account balances, history of an NFT ownership—really anything they want.”
Parsiq isn’t the only company provider of on-chain data.
The Graph
GRT
Parsiq, on the other hand, operates similarly to a legacy software-as-a-service company. The company performs the querying, indexing and storage itself.
A few of Parsiq’s other direct competitors include Alchemy, Covalent and Moralis.
Unlike many competitors, though, Tirman says that Parsiq offers the possibility of implementing real-time triggers that follows the “if this, then that” conditional programming statement.
“We’ve been compared to Zapier regarding how we automate processes between Web2 and Web3 environments,” he said. “You can tell Zapier to upload attachments to Dropbox and notify you in Slack whenever an email comes in.
“So think of it as a similar situation; if something happens on the blockchain—whether funds come in, funds go out, the smart contract gets called, etc.—take this action. So you can set up triggers such as, ‘aggregate this data sent to my accounting system.’ ‘Notify my KYC department that a transaction of over $10,000 has come in.’”
Legacy businesses aren’t the only group that can benefit from the lower operational and technical barriers that easy and scalable access to blockchain data offers. Regulators can now perform real-time monitoring without needing to set up nodes across several blockchain networks.
Tirman mentioned that the police department of an Asian country has tested its service for investigation purposes.
For all their benefits, Parsiq and other blockchain data-as-a-service providers aren’t the complete package just yet. In theory, the complete provider should be able to offer data access across all blockchain protocols—at least the most widely used ones. For instance, Parsiq currently indexes only four blockchains. That could be a limitation for businesses that want access to additional networks.
By comparison, The Graph protocol indexes over 20 blockchain networks.
While Tirman recognizes the need to support more blockchain networks, he says it’s a tough business decision.
“It’s so difficult to place our bets; there are like three dozen [blockchain protocols], and it will probably be seven dozen by year-end,” he said. “Which ones should we focus our energy on or not? Which one will go down and die? Which one will actually have adoption? [Answering these questions] is a pretty big challenge.”