The Top 5 Mistakes in Blockchain Projects Implementation
Blockchain Project Development: 2018
The world continues to surprise the public with a constantly-growing number of different projects. One of these marvels is the blockchain, which hosts many successful ventures on the blockchain project ecosystem.
Take a look at this picture for an understanding of the complete scale of this development.
On the other hand, the blockchain project ecosystem has no special immunity in modern life.
Observe the information below to understand that nothing goes as easily as we would like.
A well-known fact is that most of these projects are becoming inactive, with only 8% of them continuing to function on the market.
Now, you may well ask, “Why does this happen?” The answer is very simple: developers repeat typical mistakes during blockchain implementation of their projects.
Here is a list of ten common mistakes Blockchain project developers must avoid if they want to lead their project to success.
1. Wrong Statement of Project During ICO/Token Introduction
As blockchain technology operates with data through the processing of tokens, a significant number of blockchain-based projects require the introduction of tokens, which, in most cases, is followed by an initial coin offering as the easiest way to obtain investments and gain capital for further development. At this stage, projects tend to make several mistakes that can lead to problems in the future.
No Specific Great Mission, Goals, or Meaning of the Project
It’s not a secret to anyone that the most successful “blockchain sharks” are multi-mega millionaires. That’s why blockchain project creation is one of the most attractive possibilities for raising money today.
Every day, dozens of newly-created startups are developed on different platforms. Nobody knows which of them will gain success and earn a billion dollars, which will crash in the middle of their lifetime, and which will fail, even if they haven’t had the chance to represent themselves to the world.
All of this is the consequence of project developers’ poor attention to important things like:
- a unique vision
- a great mission that could unite millions of people
- setting goals in perspective
And, last but not least:
- differing from the crowd of other products, and offering something others don’t. This is what creates user dependence on a blockchain project.
Any lack of the above-mentioned ingredients of success can lead to the crash of a project from the very beginning of its existence.
Many blockchain projects have forgotten about business fundamentals like marketing and branding. Strong business fundamentals are essential for long-term success and stability. Companies in the blockchain space are no exception.
Let’s be honest. It’s 2018, and it’s a time of following trends. People just try to do the same things as their idols, and to live lives as amazing as theirs. The paradox is this: an easier and the more prosperous way to become successful is to develop personal advantages. The main task is to represent these to an open-handed world.
Follow the choice of your heart, not a trend!
TIPS: If you have decided not only to run a blockchain project, but also to lead it to success, think in depth about its full concept:
- how to present the project in the best way to the public it is targeted for
- Its great mission, which will involve more and more people all over the world every day
- the problems it is going to solve, and how useful it is to customers
- which steps will be the next, after the achievement of basic aims
- how to establish friendly, long-term relationships with users
And, of course, believe truly in your project. If you don’t, who will?
A Low Level of Product Development
Nowadays, users place great expectations on every new project. In his/her opinion, it must, first of all, solve current issues. Therefore, a set of demands is imposed.
To provide a successful project, create a credible model across the ecosystem to recognize unworthy areas where technology has a purpose.
Smart contracts are said to be one of today’s key technology investigations. Smart Contracts are a self-executing type of contract.
What can they do?
- They function as ‘multi-signature’ accounts. Money can be spent only if a required percentage of people confirm the operation.
- control agreements between users; announce information about implementing transactions
- make other contracts utility
- keep data about an application
- automate business-process execution
- create libraries of machine code in the blockchain environment for platform purposes
- tokenize data to introduce it for blockchain purposes
Smart contracts are much easier to create and implement compared with traditional contacts. Look through the graphic to understand the difference between them.
People can’t govern smart contracts, and that’s why they’re so popular now.
On the other hand, a poor level of attention to development and lack of prior testing by skilled professionals can also lead to disaster. Often, developers don’t take into account the legal/regulatory perspective. Customers should know about the limitations of their blockchain software. To fix this, they should try new experiments with different types of code, business models, and platforms.
Another mistake likely to make a project fail is unprofessional white-paper development. White papers are great instruments for establishing trustworthy relationships. They raise awareness and influence competitors.
This is why every detail of a project’s work process must be mentioned and available to everyone. The best way is to contact professionals to create it at the highest level of quality.
In addition, a written white paper can create advantages for any blockchain project. Check out this article about the required steps of white-paper development.
For example, Savedroid — the famous ICO in the field of artificial intelligence — is said to have one of the most qualitative ICO white papers. Every chapter is presented in a separate video in the playlist. So, it is worth following.
TIP: To attract user favor, a product must have professional, high-quality development of important aspects like the smart contract and white paper. It must also meet the demands of users in order to be friends with them.
Insufficient Resource Investment
Many blockchain projects have a lack of the resources in which to invest. First of all, it is about time, money, and knowledge. It is worth devoting plenty of time to finding and involving real business professionals in your team.
If you invest just a tiny bit of effort into the development and promotion of your product, don’t be surprised that most contributors to your project will be speculators. They are looking to make a quick buck, and won’t cowork with you over the long term.
It is crucial to understand that valuable contributors are looking for something more than just the basic requirements.
Development of an ad campaign by itself won’t help to generate interest from contributors, as the majority of the content is focused solely on raising money.
Don’t neglect to seek advice from professionals in your chosen area. Knock, and someone will open the door.
With the developed mass media, getting access to any information is quite simple. Blockchain is rapidly increasing its influence in many fields, so it has to be discovered appropriately.
In any case, project developers are facing the problem of lack of knowledge. Some of them are listening to false experts on the internet, which causes a great number of project crashes. Some are trying to solve the problem by themselves.
As a result, there is an absence of the only common educational system that could provide real, high-quality, practical knowledge (not just theoretical) of blockchain project implementation.
TIP: Do you remember the well-known old saying that the miser always pays twice? It is so applicable here.
Do not reduce the amount of time required to think over all components of your project in order to implement it at the highest possible level. Do not save money on high-level production for your project, and a really skilled staff. Do not save money on high-level education. It all will be covered by your profit very soon.
Lack of Patience and the Fear of Making Mistakes
People are inundated with rapid selling and buying proposals. This causes an emergence of short-term trading in contrast to long-term trading.
However, expectations always bring disappointments. It’s impossible to define when a specific token will be at the top of its value, and, as a result, when it is worth selling. Having your own sales plan is very useful. Keep it until the end of the crypto game.
“The man who begins to speculate in stocks with the intention of making a fortune usually goes broke, whereas the man who trades with a view of getting good interest on his money sometimes gets rich.” — Charles Henry Dow
On the other hand, this doesn’t mean that short-term trading isn’t profitable. Obviously, it is. But have a plan of taking steps, and stick to it.
TIP: The crypto market transfers currency from the impatient to the patient. So, if you want to succeed, be careful and patient.
The fear of making mistakes haunts us all. Don’t be afraid of being wrong. People attract what they think about. Don’t compare your own start to someone else’s halfway or finish. Everybody has different skills and gaps.
Following your own research and conclusions is the best solution. Listening to “advisors” on Facebook, Medium, or Slack is not always helpful. Remember that one gram of your own experience is more valuable than tons of other people’s guides.
TIP: Realize that a defeat is the best teacher ever. The world is always changing, and new opportunities appear every day.
A Poor Level of Safety
- Losing keys
Cryptographic keys indicate ownership of the wallet. Through carelessness and a lack of awareness, losing keys is one of the biggest mistakes occurring in blockchain project development.
Consider this table to discover how many Bitcoins were lost based on data from November, 2017:
Under the condition of losing a key, a customer loses access to the coins he/she possesses. There is no possibility to restore or reset a key, unlike a password or a PIN code. A Fortune publication reported that approximately 4 million Bitcoin have been lost forever due to a variety of reasons, with lost keys being one of them.
- Storing coins in online wallets
Keeping coins in online wallets is a normal fact now. In fact, the user doesn’t control them. This creates favorable conditions for stealing cryptocurrency. There are a lot of famous hacker attacks cases that have led to great monetary loss from exchange platforms.
Another technical mistake is sending coins to the wrong wallet. Or to send one type of coin to a wallet that works only with another type of currency. For example, BTC to an ETH wallet, or OMG to a CVC wallet.
- No hard copies
As a rule, people don’t keep hard copies of the data. This doesn’t mean just creating a Word document and repeat a “Ctrl+C and Ctrl+V” action. One day, the computer might crash, and, as a result, all passwords/important data could be lost. Printing off the information will help in restoring it on another device.
TIPS:
- Learn the information about “private keys” and the types of wallets that are to be used.
- Double-check that you’re sending currency to the right wallet.
- Make an investment using an offline wallet. If a transaction succeeds, the coins would move to the appropriate wallet.
- Print off vital private information, and store it in a safe place.
- Use 2fa, or save records of the code.
In conclusion, some mistakes in blockchain project implementation can be fixed during the work phase, but some can have devastating consequences. As a result, many projects are abandoned now because they aren’t in demand on a meaningful scale.
2. Wrong Decision on Blockchain Type and Consensus
For now, there are not only different blockchain-based projects, there are also huge varieties of types and technical consensus. The most well known are:
- Bitcoin’s Proof of Work
- Ethereum’s GHOST
- Byzantium Fault Tolerant and its delegated version
- Hashgraph
- Proof of Authority
- Various types of Proof of Stake, like Ethereum’s Casper (in progress) or Cardano’s Ouroboros
- Event-driven and physical-proof consensuses like Proof of Elapsed Time, Proof of Service, Proof of Space, etc. — and mixes of these types
Consensuses with different sizes of blocks, configurations of nodes, and sequences of node competition are leading to creation of a new custom or public blockchain. Each of them has limitations on processing time, scalability, and support of smart contracts and security.
A major share of projects introduces tokens with the Ethereum platform, and later struggles to evolve the project with the creation of a solution. When they don’t find a solution, they abandon the project.
It also worth considering other features regarding BC types:
- type of development (frameworks like HyperLedger or Graphene, platforms like Ethereum or NEO, not Turing-complete environments like Bitcoin or Litecoin, etc.)
- languages (unique, like Solidity in Ethereum or Script in Bitcoin; general, as in HyperLedger, etc.)
- infrastructure (existent or required to gain, like consortium chains on top of Ethereum)
- availability of libraries for custom purposes (open to create, like smart contracts in Ethereum; predefined, like OpenSSL in Emercoin; or without, as in Bitcoin).
3. Wrong Business Model
Some BC-based projects tried to recreate existing centralized business models with BC underneath.
BC is a robust technology that requires a redesign of the business model. During implementation, teams are trying to invent BC under business models without changing them, which makes BC useless.
The key benefit of BC from a business point of view is the elimination of intermediaries, with arbitration features between producer and customer.
For successful implementation, the project team should consider:
- digital transformation of entire markets, with elimination of any centralized arbitration
- platform features for business or peer-to-peer activities
- a level of economic value for the customer; economic consensus of BC
4. Profitability versus Cryptocurrency Return
There are two major issues:
- It is more profitable to gain cryptocurrency during an ICO and then wait for prices to increase (more returns).
- Due to the high volatility of cryptocurrencies, some projects suffer from a lack of financial resources due to wrong financial management during implementation, especially when prices are going down and the time to unfreeze team reserves does not come.
5. Wrong Market Estimations
Due to smartcontract and custom-blockchain immutability after deployment, some projects wrongly estimate their token economics and types of incentives for users/nodes. Cryptocurrencies and tokens have value only due to the economic consensus behind them, unlike fiat currencies, which have value due to governmental obligations. Wrong predictions about token economics and incentives will lead to a significant drop in the economic value of the token and failure of the project.
Pay great attention, and avoid these mistakes in order to run your project as successfully as you can.
This topic was covered by Applicature. Hope it is useful for you!
