Have you attempted launching a new blockchain project only to be disappointed later? Or, are you contemplating launching one?
Blockchain projects grew in numbers in the year 2018, given the excitement attached with new technology. The approximately reported figures are upwards of 85,000 new projects. Unfortunately, only less than 8% of these are still maintained as 2018 closes down.
At the base of all failure lie faulty decisions. The repetition of some common mistakes can ensure that blockchain projects have a longer life that they truly deserve.
Here are the Top 5 Common Mistakes that You Need to Avoid while Implementing
1) Faulty Information Exchange at Crucial Interfaces:
Several blockchain projects need tokens to be introduced as the blockchain operates with data through processing of tokens. This generally follows that an initial coin be offered to obtain investments and gain assets for further progression and development. Following problems usually happen at this stage –
- Not having a clear meaning, mission, vision and goals for the project.
- Low focus on product development.
- Deficient resources and faulty management of existing resources.
- Low levels of patience and undue hastiness.
- Low levels of calculated risk taking.
2) Lack of Solution-centricity:
In order to move forward fast in a highly competitive environment, consensus with different sizes of blocks, configuration of nodes and sequences of nodes are done hastily, which results in generating new customers and private blockchains being created. But this has limitations in the form of compromised processing times, scalability and support of smart contracts and security.
Many such projects introduce tokens with Ethereum platform, but cannot go further by providing a viable solution. Lack of long-term solution-centricity therefore isone of the main reasons for failure.
3) Faulty Business Model:
One of the biggest reasons for failure of blockchain projects is to reconstruct a centralized business model with blockchain technology as a base. It’s like putting old wine in a new bottle. This doesn’t work because blockchain is a robust technology requiring a complete redesigning of the business model.
If in their overt enthusiasm while implementation, the teams constantly attempt to invent blockchain under centralized business models, without changing or restructuring them, the whole of blockchain becomes useless for all practical purposes.
4) Inflated Market Estimations:
By default, a blockchain project is immutable and has high levels of transparency. When after deployment and execution of smart contracts it is discovered that the projects have inflated estimates for their token economics and incentives for their users, it becomes a self-fulfilling prophecy, which drags down the whole project. Such incorrect projections lead to a considerable drop in the overall economic value of the token and ultimately lead to the downfall of the project.
5) Wrong ROI Expectations:
The blockchain projects, especially those involving cryptocurrencies face the usual ROI expectation issues as in any other business.
Firstly, as in any other financial product-based business, it is more profitable to have capital gain at the time of initial coin offering than it is when there is an increase in prices later on. Secondly, cryptocurrencies are subject to higher volatility, so some projects suffer because of lack of financial resources and faulty financial management.
If wrong ROI expectations are projected to the participants, it leaves a bad taste in the mouth. It also leads to the project not moving forward as expected leading to a decline in prices further.
If the above points are taken care of, chances of failure of a blockchain project can be diminished considerably.
