Today, blockchain is increasingly penetrating all areas of business and people’s lives, where it finds unexpectedly effective applications. Many startups announce to the world really groundbreaking ideas for using blockchain and attract crazy attention to their products. All this inspires hope among entrepreneurs who see the implementation of blockchain as the only (or one of the main) ways to success and wealth.
BeFund team has been working with customers all over the world for years and has encountered many different ideas from customers. However, not all of them are suitable for implementation, so from time to time we refuse some willing ones and every time we justify our decision in detail. The reasons for the failures lie in the mistakes of customers who put false expectations on the blockchain or do not understand the purpose of this technology correctly at all. In such cases, it is better to honestly warn customers and explain the “thin areas” than to endanger those who trust our company. Therefore, now we will talk about 5 common mistakes from clients that are unacceptable at the beginning of new projects or updating existing ones.
The protocol is not a complete business solution
Today, the word ” blockchain ” is added with pleasure everywhere (and not always appropriately) where it is necessary to talk about the latest technological solutions. That is why many people have the wrong idea, as if the very existence of decentralized networks is already a full-fledged solution to their problems. In fact, this is far from the case: for example, you can say that to open your own cinema, all you need is electricity. We hope you understand the point, because the existence of the protocol is only a bridge to the world of blockchain possibilities .
Even massive advertising of certain blockchain solutions does not guarantee their suitability for business. Usually, these are just concepts that require adaptation and multi-stage verification before such software can be integrated into one’s own business. It should also be taken into account that the maximum permissible share of the use of blockchain in business has long been determined and it is 10% of the entire project. So you see, relying solely on blockchain is a mistake to avoid.
Relying on a specific decision, instead of developing a strategy
Is it worth talking about the variability of offers in the blockchain world ? As they said in the series “X- files “: “Dozens of species disappear on the planet every day. But no one knows how many new ones appear…” Indeed, the number of names of various companies and products is simply staggering , while there are not too many stable and well-known giants. According to statistics, 90% of blockchain- related projects launched in 2016 ceased to exist within 12-24 months. For 2022, this indicator is already 76%, but it is still extremely high.
Blockchain has been around for a long time, but it is quite possible that optimal solutions have not yet been found. History teaches us this, in particular the situation with the development of WEB1 and WEB2. Therefore, today it will be a mistake to rely only on a specific solution based on blockchain , although it may seem ideal. After a year or two, such a platform may simply cease to exist and you will remain inferior . Therefore, at the beginning of development, you should think about flexibility: you need to focus not on a specific product, but on a concept. In this case, under any conditions, it will be necessary to change only the name of the decision, and not the entire strategy.
A smart contract does not solve all business issues
What could be better than a contract that independently monitors the observance of the rights of the parties and is executed automatically? However, business owners should not rely on smart contracts as an absolute solution to most problems.
First of all, you should pay attention to the legal force of smart contracts , which is far from the same in different countries. Somewhere they are recognized, in other places this technology has no weight, and somewhere it is completely prohibited. Therefore, it will be a mistake to organize a business where, apart from smart contracts, there are no other conditions for interaction with clients.
Also note: the smart contract is a subject of special attention even today. When developing, you should pay a lot of attention to auditing and security, because your business and your customers’ assets will depend on it.
Isolation of the project team from third-party developers
Quite often in our practice there is a significant conspiracy on the part of the client’s development team. Even trusted partners, such as BeFund , are not always willing to reveal information that is extremely important for the implementation of the project, and their work is complicated by excessive secrecy. In general, this is understandable, because ideas are money that should be protected from others. However, for the most part, such excessive conspiracy significantly hinders the project and the developers themselves.
Training the specialists involved in your project is extremely important. Especially if you have several people on staff who depend on the success of the whole business. In this case, their isolation from the rest of the world, especially the contractor’s developers, will only hurt. Instead of keeping the details of the project secret, all you will get is regression and loss of money. After all, close interaction and exchange of experience between developers guarantees development and improvement. And if such a process does not take place, even a good project will eventually become obsolete and lose its competitiveness. So always focus on the training and development of your specialists.
Illusions of lower costs using peer-to-peer distributed networks
Finally, it is an extremely common misconception that the cost of using blockchain is lower than other IT technologies known today, and will only decrease in the future. Therefore, several times we have come across business plans where the costs of supporting and operating the project after 5-6 years are assumed to be simply negligible.
In fact, not everything is unambiguous in this matter. Indeed, in decentralized networks there are no long chains of intermediaries, so there are simply no additional fees and commissions. On the other hand, the question of who and how much should pay for multi-party operations is still debatable . And you will still have to pay.
Also, we observe a constant growth in the rates of the main cryptocurrencies , in which the calculation for the execution of smart contracts in the corresponding decentralized networks is mostly carried out. Thus, we have a twofold situation: the use of blockchain has every reason to become less costly than the rest of IT technologies, but the cost of blockchain services is steadily increasing. Therefore, you should not hope for the absence of costs in the future and build a business strategy on this.
We hope our examples motivated you to develop your own business and use blockchain . After all, now you know exactly what not to do and what to pay attention to, which means you are 5 steps closer to success. BeFund specialists are always ready to help you realize your own ideas with our help. So don’t waste time!
