The blockchain industry is yet to reach a stage of stability and the diversity and lack of regulation can be tedious for the new users. In the last few years, adoption of crypto currencies have grown substantially and enterprises are testing this sector in an unprecedented way. Given the fact there are plenty of cryptocurrency types, oodles of crypto wallets and they all come with unique feature set, making the right choice can be tough. Companies adopting blockchain technology need to take a cautious approach, say the industry experts.
The top blockchain mistakes made by the businesses
As per a recent Gartner study, a majority of prevalent enterprise blockchain platform systems need replacement if they have to remain relevant, competitive, and secure. Many enterprises actually overestimate the short-term benefits and capabilities of blockchain technology to meet business goals. They develop unrealistic expectations when analyzing blockchain platform vendors-says Adrian Lee, Gartner’s senior research director. As a result, the firms using blockchain tech are only utilizing it as a database for asset tracking and shared record keeping while overlooking the other potentials.
In the last few years, companies dabbling with cryptocurrency and blockchain technologies have made a number of common mistakes. If you become aware of such mistakes, it will be beneficial for your company.
- Not utilizing blockchain to develop immutable data audit trails
IT leaders and companies that have been using Blockchain are using it mainly for proofs-of-concept type tests. However, these can also be handled using typical database application. Gartner analysis’s say most blockchain using firms envision it as a technology for locating a problem. It can also be used as a decentralized ledger to support massive data audit trails- but few are aware of that truth.
- Assuming the technology has reached a mature stage
Again, this is a conception about blockchain tech that many enterprise adopters harbor! They often assume that blockchain technology is ready for use in full fledged production. The truth is the market consists of fragmented platform offering, each coming with salient features. So, one such platform may not be equally suited for very enterprise. Some blockchain platforms are good for universal transactions while few are more security flossed and there are others that score owing to tokenization benefits. Most of these platforms are not matured enough for large-scale production needs. Of course, the way this technology is evolving- these issues will get ironed out in the next few years.
- Confusing business solution with protocols
Some enterprises often confuse business solutions with protocols. The truth is blockchain is a technology which needs applications atop to meet specific business needs. While the firms can deploy blockchain in varying scenarios including supply chain management and data sharing across healthcare information systems, it is necessary to include features like interoperability and UI. The analysts say, the enterprises should think of blockchain as protocol to execute a specific task within a fully drawn application.
- Wrong perceptions about scale
The companies using blockchain often consider it just as a data storage system or database. The technology is not very scalable yet. Every node in peer-to-peer network gets a distributed ledger copy each time it’s updated. So, the performance slows- as it grows. Blockchain was originally developed to offer immutable, authoritative and trusted record of events. The architecture delivers at cost of database management efficiency. As of now, Blockchain cannot replicate database management technology’s model fully.
- Expecting interoperability soon
The blockchain universe still does not offer great interoperability standards. It is true a few blockchain platforms have better interoperability than others. However, the enterprises should deem platform interoperability claims as mutable. The sector is evolving fast and compatibility issues will exist for more time- from a logical perspective.
- Assuming smart contracts tech is matured
Some firms using blockchain erroneously think smart contract technology has reached the stage of maturity. The smart contracts are specialized business automation applications that store methods associated with certain transaction records. As opposed to a stored procedure in any centralized setup, smart contracts get executed in a P2P network by all nodes. This leads to manageability and scalability challenges that are hard to iron out. Smart contract technology is yet to mature.
- Not understanding governance well
In any private blockchain system, network governance is tackled by blockchain owner. That does not happen with public blockchains. Governance in most public blockchains like Bitcoin and Ethereum is targeted at technical issues. Human motivation or behaviors get rarely addressed. The enterprises need to think of the risks blockchain governance may bring in the way of project success.