Web3 Use Cases
Introduction
The ideas of decentralization and user ownership are included in the next version of the internet, known as Web3. The implementation of these concepts is closely linked to blockchain technology and the cryptocurrency industry.
Our team has extensive experience in building and implementing blockchain technology, as well as analyzing and trading in various cryptocurrencies.
We are dedicated to providing our clients with cutting-edge solutions that help them stay ahead of the curve in this exciting and rapidly evolving space. With our expertise, you can be confident that your blockchain and crypto projects will be successful and profitable.
The Importance of a Data Strategy
Blockchain Analysis
What is Blockchain Analysis?
Tracking crypto wallets
Tracking the price of digital assets
Define custom alerts
Fraud detection and prevention
Our Experience
Smart Contract Development
What are Smart Contracts?
Financial transactions
DAOs and voting rights
Smart Contract Optimization
Our Experience
Tokenization
What is tokenization?
NFTs, Art & Collectibles
What is an Initial Coin Offering (ICO)?
What are utility tokens?
What are security tokens?
Equity tokens
What are asset-backed tokens
Real estate tokens
Our experience
Financial Analysis in Crypto
What is Financial Analysis in Crypto?
Risk management
Identify investment opportunities
Our Experience
Tradings bots development
What are trading bots?
Arbitrage
Our Experience
Bitcoin Mining
What is Bitcoin Mining?
Our Experience
1) The Importance of a Data Strategy
On this page, we'll go over some of the most significant applications of blockchain technology with a focus on how data science and machine learning may be used in these scenarios.
Despite the fact that some of these use cases may be advantageous for your company right now, we strongly advise that you first establish your company's goals and existing problems using our data strategy program before we prescribe any use cases.
The data strategy is a program that, based on your company objectives, establishes metrics to monitor them and prioritizes the right activities to guarantee that those business objectives are reached, aiming for the highest return on investment at any given time.
In short, any company or organization that wants to flourish in the blockchain and cryptocurrency industry must have a data strategy. This is especially true given how unpredictable this market is. You can only fully utilize this innovative technology and advance your organization by making an investment in a strong and efficient data strategy.
2) Blockchain Analysis
The blockchain is a decentralized and secure ledger that is open to the public and can be viewed by anyone who is interested in doing so. This is the most innovative aspect of the blockchain. All cryptographic currency transactions are saved on a distributed ledger that is open to the public.
What is Blockchain Analysis?
The practice of researching and evaluating the information and transactions on this blockchain network is known as blockchain analysis.
For easy comprehension and interpretation, the data may be presented in various formats, such as graphs and charts. In order to find hidden patterns and insights in the data, applying machine learning algorithms and other cutting-edge methods may also be required.
Tracking crypto wallets
Tracking the activity of cryptocurrency wallets is one of the main uses of blockchain analysis. Blockchain analysts can obtain insight into the actions and behaviors of specific users as well as spot patterns and trends in the larger cryptocurrency market by examining the movement of money between various wallets.
Tracking the price of digital assets
Monitoring the cost of digital assets is a crucial component of blockchain analysis. Analysts can track the market value of various cryptocurrencies and spot trends and patterns in their price movements by examining the data on the blockchain. Investors and traders who want to choose the best times to buy and sell various assets will find this information immensely valuable.
Define custom alerts
Blockchain analysis can be used to create alerts for suspicious wallet activity or transactions. Analysts may immediately identify potential dangers and take appropriate action to preserve their assets and the integrity of the blockchain by setting up alerts based on specified criteria, such as very large or unusual transactions.
Fraud detection and prevention
The identification and avoidance of fraudulent transactions is one particular application of these alerts. Since the blockchain stores public data, it is simple to block these wallets because fraudsters are frequently placed on a blacklist whenever fraud is discovered.
We can also create machine learning models to identify potential fraudsters and block or signal alerts on transactions before the fraud is perpetrated thanks to knowledge about the fraudster's wallets and the availability of all transactions.
Our Experience
In the Observation module of our Data Strategy program, we create dashboards in the conventional Business Intelligence manner and provide alerts that can be generated in response to predefined criteria.
For the largest national payment processor in traditional finance, we have worked on an impactful fraud detection project. More information about that use case is available here.
3) Smart Contract Development
Although computer scientist Nick Szabo first proposed the idea of a smart contract in 1994, it wasn't until the Ethereum project introduced the ability to create and execute smart contracts using the Ethereum blockchain and its own programming language, Solidity, that the concept was developed and implemented. Since then, use cases such as supply chain management and voting systems, as well as sectors such as finance, insurance, and others, have seen a rise in the use of smart contracts.
What are Smart Contracts?
A piece of software known as a smart contract enables significant decentralization in a trustless system. In other words, it enables the construction of censorship-resistant contracts where no mutual trust is necessary. They can be used to manage digital assets and function as a digital agreement that is upheld by a specific set of rules. Typically, these operate on a blockchain, such as the Ethereum blockchain.
Smart contracts are written in computer code as opposed to traditional contracts, which are written in natural language and must be manually executed. When certain criteria are met, the terms of the agreement are automatically enforced by smart contracts.
A crucial aspect of blockchain technology, smart contracts are widely employed in a variety of contexts, including voting processes, supply chain management, and financial transactions. Smart contracts are extremely dependable and safe because they are immutable and tamper-proof due to the fact that they are stored and performed on the blockchain.
They are especially helpful since they make it possible to automate laborious and extremely delicate activities like money transfers and transaction execution. Businesses and individuals can streamline their operations and lower the risk of fraud or errors by adopting smart contracts.
Financial transactions
Automated escrows are one frequent application of smart contracts in financial transactions. A third-party service known as an escrow holds money in trust until specific requirements, such as the conclusion of a transaction or the performance of a contract, are satisfied.
The escrow process can be automated and carried out on the blockchain with the help of smart contracts. Due to this, money transfers can be carried out securely and openly without the need for human intervention or the chance of fraud.
A smart contract might be set up, for instance, to keep money in escrow until a customer receives the products or services they ordered. The smart contract will instantly release the money to the seller after the buyer certifies that the products or services have been received. This guarantees the protection of both parties and the fair and transparent completion of the transaction.
DAOs and voting rights
In the establishment and administration of decentralized autonomous groups (DAOs), smart contracts are a significant application. A decentralized autonomous organization, or DAO, is a self-managing organization that runs on the blockchain, without the need for central authority or control.
Due to their ability to automate complicated operations and enforce rules and policies, smart contracts are a crucial part of DAOs. A smart contract can be used, for instance, to automatically distribute funds or other resources inside a DAO or to impose guidelines for voting and decision-making.
Traditional organizations frequently have hierarchical and centralized structures, with a small number of people or groups holding the majority of the decision-making authority. A DAO run by smart contracts, on the other hand, enables fair and open decision-making with each member having the same voting rights and participation options. By doing this, the organization is guaranteed to be really decentralized and self-governing, and it gives all of its members an equal opportunity to participate in and benefit from the organization's success.
Smart Contract Optimization
By utilizing cutting-edge analytical approaches to pinpoint areas of inefficiency and potential performance enhancements, data science can aid in smart contract optimization.
In order to do this, it is necessary to evaluate the effectiveness of already-existing smart contracts, carry out predictive modeling to foresee future problems, and use machine learning algorithms to improve contract execution and lower transaction costs.
Data science can also assist in identifying and preventing any security flaws in smart contracts, hence preserving the accuracy and dependability of the contract execution procedure.
Our Experience
At EAI, we have built complete solutions in Solidity implementing decentralized marketplaces and Escrows to enable trustless and secure financial transactions between users. Our smart-contract development follows a test-driven methodology to make sure our contracts are safe and efficient.
We also have experience in analysing other projects, having found some vulnerabilities in the past for one of our client's presale contracts in a decentralized exchange, potentially saving them tens of thousands of dollars.
4) Tokenization
When Bitcoin, a decentralized digital currency, was introduced in 2009, it was the first instance of tokenization in crypto. However, the idea of tokenization only broadened to enable the production of tokens that represent a broad range of assets when the Ethereum blockchain was introduced.
What is tokenization?
The act of expressing tangible or digital assets as tokens on a blockchain is known as tokenization. For companies and individuals who want to profit from the strength and security of the blockchain, there are several advantages. For instance, it enables the assets to be moved, traded, and managed conveniently and securely without the need for intermediaries or centralized authorities, manual intervention, or the chance of mistakes or fraud.
The development of new financial instruments and investment opportunities, such as tokenized securities or digital assets, is also made possible by tokenization. This can open up new markets and opportunities for businesses and entrepreneurs while offering investors fresh and interesting ways to expand and diversify their portfolios.
NFTs, Art & Collectibles
Non-fungible tokens (NFTs) are a specific class of digital assets that cannot be duplicated or divided. They are unique digital assets that are incomparable to conventional cryptocurrencies, which are interchangeable.
NFTs offers a safe and transparent way to own and exchange assets on the blockchain and are frequently used to represent art and other special assets. In the area of digital art and collectibles, Bored Ape Yacht Club and CryptoPunks are two well-known NFT examples.
What is an Initial Coin Offering (ICO)?
An initial coin offering (ICO) is a popular method for obtaining capital that is frequently used to support new blockchain initiatives as well as to raise funds for already-established companies or organizations. It is a sort of crowdfunding campaign in which the campaign's administrators provide investors with digital tokens, sometimes known as "coins" or "tokens," in exchange for money.
Depending on the nature of the project and the rights and liabilities associated with the tokens, the tokens sold in an ICO might either be utility tokens or security tokens.
What are utility tokens?
Utility tokens are digital assets that give users access to a good or service without giving its holder ownership or control rights. Utility tokens can be exchanged on the open market like any other cryptocurrency and are frequently utilized as a form of exchange or payment within a particular ecosystem or platform.
Utility tokens, for instance, can be used to access subscription services, pay for goods and services, or take part in rewards programs, enabling the development of fresh and creative business models.
What are security tokens?
Similar to traditional stocks or shares, security tokens are digital assets that reflect ownership in a business or other entity. The same laws and regulations that apply to traditional securities also apply to security tokens, and they give investors the same rights and obligations.
For companies and organizations looking to raise money or give investors liquidity, security tokens are an important tool. Businesses and organizations can access a global investor base and obtain the funds they require to expand and flourish by issuing security tokens.
Traditional securities are frequently traded on controlled exchanges that have challenging entrance requirements as well as intricate rules and regulations. On the other hand, security tokens can be traded on decentralized exchanges that anybody with an internet connection can access. Greater market liquidity, accessibility, and transparency are made possible as a result.
Equity tokens
These tokens are a class of digital assets that represent ownership in a firm or project. They operate in a manner similar to conventional stocks in that holders are given voting rights and a share of the company's profits.
What are asset-backed tokens
A token that is backed by actual or digital assets, such as gold, silver, works of art, or other commodities like money, is referred to as an asset-backed token. Asset-backed tokens, which can be traded on the blockchain like any other asset, offer a safe and transparent means to own and trade these assets
The possibility of fractionalizing ownership of the underlying assets is another advantage of asset-backed tokens. Traditional assets, like gold or art, are frequently expensive, challenging to hold or exchange, and they need a substantial investment in capital.
Real estate tokens
These tokens are an interesting particular case of asset-backed tokens, as they represent ownership of a piece of real estate, which can be used to buy, sell, or manage the property. Real estate tokens provide a transparent and secure way to manage property ownership, and they can be traded on global markets without the need for intermediaries.
By using real estate tokens, investors can easily and efficiently purchase and trade property ownership without the need for intermediaries or cumbersome paperwork. This not only reduces transaction costs but also allows for quicker and more flexible and faster investment in real estate.
The use of real estate tokens can open up investment opportunities to a wider pool of investors, including those who may not have previously had access to traditional real estate investment avenues. This can help to democratize the real estate market and provide more opportunities for wealth creation.
Our experience
At Enlightenment.AI, we have previously worked in tokenizing security assets for a venture capital management company, managing several hundreds of millions of dollars.
Additionally, we’ve worked on a project that created computer-generated digital art and tokenized those assets as NFTs on the Ethereum blockchain.
5) Financial Analysis in Crypto
Examining a company's financial statements and other pertinent data in order to assess its performance and overall financial health is known as financial analysis. This analysis aids in the decision-making process for managers and investors regarding the company’s capital allocation and management.
Numerous methods and instruments are used in financial analysis, such as ratio analysis, trend analysis, and comparison analysis. These techniques are used to evaluate a company's financial performance in relation to its competitors and the larger market, as well as to pinpoint its strengths and flaws.
What is Financial Analysis in Crypto?
Financial analysis in the context of cryptocurrencies is the process of assessing a cryptocurrency or blockchain project's performance and health from a financial perspective using both quantitative and qualitative methodologies.
t entails taking a close look at a number of indicators, including market capitalization, liquidity, trading volume, price patterns, and the overall health of the cryptocurrency market. Investors can assess these elements to estimate a particular crypto asset's potential value and development potential.
The assessment of the underlying technology and advancement of the blockchain project is another crucial component of financial analysis in the cryptocurrency industry. This involves looking at the project's whitepaper, its technology, the development team, its rate of development, and the support from the community. Investors can learn about a project's potential for expansion and growth by familiarizing themselves with its underlying technologies.
Risk management
Investors will be better able to handle the possible risks and rewards of investing in a project if they have a thorough understanding of the project's finances and can identify undervalued or overvalued initiatives.
Consider a crypto project that has a solid development staff, a clear whitepaper, and a sizable and engaged community. If so, investing in it might be less risky than it would be in a project with shakier fundamentals.
Identify investment opportunities with machine learning
The historical data from successful projects can also be compared using these parameters. Long before a project starts to get more traction and see an increase in market cap, data science and machine learning can assist in automatically signaling undervalued projects with growth potential.
Our Experience
We developed a technique to analyze inexpensive or overvalued equities in one of our previous projects using metrics from Reuters Eikon data, including growth rate and EBITDA.
It's not always as simple as it seems to obtain historical cryptocurrency statistics. In the past, we created a database and ETL procedures to collect historical prices from well-known exchanges and monitor the community's expansion and rate of technological development.
In a different project, we developed a platform that generated alerts for platform subscribers based on technical analysis indicators, such as Fibonacci retracement levels. Users of the platform could define setups and conduct event studies for such configurations. It looked for specific instances of a pair of assets' settings in the historical data and displayed the historical performance for those setups.
6) Tradings bots development
Trading bots have their roots in the 1960s, a time when computers became widely accessible. In order to assist them to allocate capital more quickly and accurately, traders and investors at the time started to create automated systems.
Trading bots are now often utilized by traders and investors in a variety of financial markets thanks to considerable advancements in the technology underpinning them over time. In the world of cryptocurrencies, where they may be used to carry out trades on decentralized exchanges that operate around-the-clock and to take advantage of market opportunities in real-time, they are especially well-liked.
What are trading bots?
Trading bots are computer programs that trade assets automatically on a variety of exchanges. To carry out trades on the user's behalf, these bots employ algorithms and pre-established regulations.
Various trading methods can be implemented into trading bots to execute transactions. For instance, some bots might be programmed to simply place trades based on technical indications, but others might base their choices on fundamental analysis. Trading bots can also be tailored to the user's own requirements and preferences, enabling them to select the assets they wish to trade and the level of risk they are prepared to take.
One of the main advantages of employing trading bots is that it removes emotion from the decision-making process because the transactions can be executed automatically using a reliable established strategy.
They also enable dealers to carry out trades around-the-clock even if they are not physically seated in front of their computers. As a result, traders can benefit from market opportunities as they present themselves without having to keep track of the markets themselves constantly. Trading bots can also assist traders with portfolio diversification by carrying out deals across a variety of exchanges and currencies.
Arbitrage
For methods like arbitrage, which entail capturing price discrepancies on the same item across various exchanges or markets, trading bots can be extremely helpful. By purchasing an asset at a cheap price on one exchange, then selling it at a higher price on another exchange, traders can swiftly and effectively execute arbitrage deals.
Our Experience
A trading bot has been developed by our team that searches for potential triangular arbitrage opportunities. The bot was able to work with many exchanges, and even multiple chains by bridging between them when it was beneficial to do so.
7) Bitcoin Mining
An unidentified person or group known as Satoshi Nakamoto wrote the first white paper introducing bitcoin in 2008. A decentralized digital currency without a central bank or middleman was described in the white paper as being supported by a peer-to-peer network.
In comparison to other cryptocurrencies, Bitcoin stands out for three reasons: it has been around the longest, starting in 2009 with the mining of the first block of the Bitcoin blockchain; it uses the Proof of Work consensus model, ensuring that it costs money to create new Bitcoins; and it is still the most well-known cryptocurrency to this day.
Even though the majority of people think that mining Bitcoin is not profitable, this is incorrect. It can still be a useful way to earn money passively while you sleep, if done correctly. As with any commodity, the best method to amass bitcoin is to do it at the cost of production.
What is Bitcoin Mining?
Bitcoin is one of the cryptocurrencies that works through the Proof Of Work (PoW) consensus mechanism. It is a consensus mechanism that asks the machines which are validating the network to solve a computationally expensive cryptographic equation before a new transaction is written to the blockchain.
The process of adding transactions to the blockchain, the cryptocurrency's public record, is known as bitcoin mining. A fixed quantity of bitcoin is awarded to the miner who correctly solves the equation, incentivizing people and businesses to take part in the mining process.
It demands a lot of computation power and electricity, both of which can be expensive. However, mine has the potential to bring in substantial rewards and is crucial to preserving the decentralization and security of the bitcoin network.
It becomes harder to compete in the mining process as the demand for bitcoin rises and mining becomes more complicated. Due to this, specialized mining tools have been created, and mining pools have been established where several miners pool their resources in an effort to maximize their odds of success.
Our Experience
At EAI, we have helped our clients with all of the following requirements, for them to manage a profitable miner and store their assets safely:
Select the best ASIC hardware, at the right time for the right price;
Select the most profitable way to host your machines, based on service and electricity costs;
Secure your crypto assets, using cold wallets.
Another option on our list is an even simpler way to mine Bitcoin through our Terahash product. This way you can buy the equivalent of the amount of Terahash you choose at a fixed one-time payment only. The Terahash will yield you a passive monthly income based on the current market rewards on that Terahash equivalent from an ASIC machine.
Final remarks
Our team at EAI can offer thorough help for any of your Blockchain and cryptocurrency initiatives, from analyzing Blockchain transactions and creating smart contracts to tokenization and financial analysis. We have experience building trading bots and can support your efforts to mine Bitcoin for passive income.
Let us guide you through the challenging and exciting world of blockchain and cryptocurrency!
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