How to Index the Blockchain to see the "Big Picture”
Companies all over the world have been studying user behavior for decades. This allows them to determine how their product is being used and which areas need more development.
However, this might be difficult in the Web 3.0 space because the blockchain upon which it is based is a complex and vast space with distinct ecosystems that rarely communicate with each other. The fact that most transactions are anonymous adds another layer of complexity.
Over the last couple of years, a new way of reading the blockchain has been developed, allowing engineers to take a step back, look at the big picture, and make appropriate adjustments. But in order to understand indexing, we need to first explain how a blockchain works.
What is a Blockchain?
A blockchain is a distributed and shared set of information on a network. It is an ever-updated history of transactions that is constantly being updated by a number of machines in an open, transparent, and unchangeable manner. Blockchains are the cornerstone of many digital assets – coins and tokens – but can be used in many other sectors, including logistics, retail, healthcare, and a lot more.
With the growth of Web 3.0 solutions, blockchains and their features are an extremely important element of the industry, and understanding them is key to the future of the industry.
Searching the blockchain
Think of the internet in the late 1990s. By that time, many companies had their own websites and even blogs were starting to become popular. But someone with a particular interest, such as, for example, classic motorbikes, could find it extremely difficult to find a group of riders with similar interests as himself. Things changed with the introduction of Google, which made it easier for people to not only find what they loved, but also study that metadata to discover trends, identify userbases, and more. The power of this particular search engine over others at the time was that Google had “spiders” which trawled through the web and created directories of pages based on keywords and other factors.
Through indexing algorithms, multiple blockchains and all of their use cases – including NFTs, DeFi, and Smart Contracts – can be sifted through and analyzed.
Why is Indexing useful?
As we mentioned earlier, indexing is fundamental for developers to see how users are interacting with their products and can be used as a key tool for business intelligence, development, and marketing.
For example, by tapping into the right data sets, projects can determine what kinds of people use their products, how they use smart contracts, and which time zones are most busy – and hence which parts of the world their users come from.
Other parts of the business can also find some of the data useful. These include:
Financing: Indexing can help figure out every single transaction that can create a tax liability
Marketing: game developers can understand how in-game-NFTS are being used and tweak their promotions accordingly
What are the most popular tools for indexing the blockchain?
There are a number of solutions for indexing the blockchain. However, the most popular are The Graph and Moralis, despite being slightly different in scope.
By far, the most talked-about indexing tool is The Graph. Have you ever wondered how Facebook always seems to know everything about you? That’s because the social media giant has developed an open-source data query and manipulation language for APIs called GraphQL.
By adapting the code for blockchain, the developers of The Graph managed to parse through the complex data of the Ethereum blockchain – which hosts dozens of tokens, NFT platforms, as well as smart contract protocols – to make sense of the seemingly random sets. The Graph offers an unobstructed view of the items that matter for efficient decision-making.
However, there are some problems. For example, in the case of The Graph, the developers still need to understand the blockchain quite well. Therefore, the barrier is still high as not many people know the blockchain development rules.
The other popular option is Moralis. Unlike The Graph, Moralis is said to be more intuitive, supporting a number of chains – including Binance Smart Chain, Polygon, Avalanche, and others.
Users praise Moralis for being easy to use, intuitive and versatile. The service allows developers to roll out dApps in a fraction of the time compared with other more traditional methods. The team behind Moralis claims that users can be up and running with a project in a matter of hours, and the technical knowledge required is much lower than the alternatives.
We are only just scratching the surface of what is possible with Web 3.0. New and promising projects are appearing on a weekly basis, and as their numbers proliferate, a strong and versatile tool to navigate through them will become a necessity. Just as every internet user Googles a term dozens of times a day, the same will soon happen with indexing, where such tools will extract all the necessary information from blockchains to improve our lives