It’s easier to look at blockchain as a sure technology to build business applications on, going by the hype surrounding it. The blockchain market size is even predicted to hit $104B by 2028. After all, blockchain has transformed the way we think about digital currencies, so why shouldn’t it be able to do the same for business?
Blockchain technology has essentially been around since 2009 and has been adopted by some of the world’s biggest tech companies. However, many obstacles still prevent enterprises from realizing their full potential. In this post, you’ll see some of the top reasons enterprise blockchain projects may fail.
What is blockchain project failure?
This is where an enterprise blockchain project fails to accomplish the desired goal. This can happen when enterprise owners fail to map out the use cases in their businesses. It can also be a result of poor implementation planning and structure. Various other reasons can lead to scenarios where enterprise blockchain solutions fail to work. Read on to learn.
Making an unrealistic choice of technology
The technology chosen for a project is one of the most important factors in determining its success. The problem with many blockchain projects is that they use technologies that are unsuitable to be useful for day-to-day applications. For transactions to take place seamlessly on a blockchain, you must align your needs to the technology. If the technology being used isn’t up to par with these requirements, there will be problems.
For example, if you’re using Ethereum as your blockchain platform, you need to understand its consensus protocol. The Ethereum verification process consumes significant amounts of power, something you need to be aware of before choosing this platform. The Ethereum network might work for some businesses better than others. Make your pick wisely.
Not considering industry use cases
A lot of projects have failed because they ignored the industry use cases. For example, imagine if you had a blockchain project that focused only on payments and not on the supply chain or any other industry use cases. You’d be limited in your scope and would probably fail miserably.
Similarly, imagine if your blockchain project was only used for peer-to-peer payments and didn’t have any other industry use cases. That’s like having a software program where all you can do is send emails and files. Research is necessary to find out which blockchain network will best work to solve the needs of your niche and industry.
Lack of Skilled Technical Experts
The lack of skilled technical experts is one of the biggest reasons enterprise blockchain projects fail. The technology requires a lot of technical expertise to build and maintain. This is particularly true for industry-specific apps such as a waste management app for managing radioactive or hazardous materials. These can be more extensive and complex to build than your average project.
When you’re looking to create an enterprise blockchain network using open-source software, you’ll need to hire programmers with experience with the language and protocols that make up the underlying architecture of your chosen platform. That’s not always easy, especially if you’re new to the technology.
The best recommendation is always to find an experienced developer with experience building enterprise-level decentralized apps on top of understanding open-source platforms like Ethereum.
Poor project management
When working on a blockchain project, it’s essential to understand that challenges and risks are involved. You’ll have to deal with security concerns, technical challenges, and regulatory issues, and that’s just for starters. You also have to work within an extremely tight budget and schedule, so you can’t afford to let anything slip through the cracks.
Many enterprises still don’t do enough to plan for these challenges ahead of time. Instead, they rush into their projects with little thought or forethought about how they’ll be able to meet their goals and deadlines, and then they find themselves in a situation where the scope of their project has grown too much for them to handle.
Resistance to Change
The blockchain is a revolutionary technology that has the potential to change how we do business and our daily lives. However, it’s essential to understand that blockchain projects fail because they inherently resist change.
For your business to succeed in blockchain, you need to drum up enough support for it from all stakeholders, especially your employees using the applications. It’s not enough to have applications that work, the people using them need to be on board with using the tools.
Here are some tips for keeping your project on track:
- Collaborate with other companies in the space. It’s always good practice for everyone involved in a project to agree on a plan before moving forward but if that isn’t possible, then at least make sure everyone knows their roles and what they’re accountable for.
- Create clear expectations of all parties involved in your company’s success and failure. This will help keep everyone accountable for their actions and decisions, which is vital when working toward something as ambitious as a blockchain project.
Doing it for the hype
Blockchain hype is real, and there’s no sign of it dying down. Technology has been touted as a solution to many problems, but making sense of what it can do and how it works is challenging. So it’s possible to get excited about the technology and to find yourself getting into it for fear of missing out.
There’s enough talk about how it will change everything, how it will revolutionize financial transactions, how it will help you build better apps faster for your users, and how it can solve major issues present in traditional apps. But keeping up with the hype is a dangerous way to get started in blockchain technology.
You need to understand why you need it and what problems it can solve before you get into it. Needless to say, blockchain might be good, but you still need to educate yourself about how to use it.
Blockchain is a promising new technology. However, the cost and difficulty in implementation remain a big challenge. It has a steep learning curve; you need to understand how it works before getting involved. Otherwise, your projects won’t live beyond a few months, if at all. Enterprise organizations should approach blockchain with care and consideration.