9 Mistakes Startups Might Make When It Comes to Blockchain

John Rampton is an entrepreneur, blockchain enthusiast and internet marketing expert. He is also the founder of online payment company Due.

In this article, he discusses the lessons he learned while applying blockchain solutions to his own startup.

Blockchain plays a key role in recording the generation and transfer of Bitcoin. Each cryptocurrency has its own blockchain. Therefore, it is critical to use blockchain correctly to maintain its quality and reputation as a value transaction network.

For me, blockchain was initially explored for a project that would transform the online data functionality that drives our online settlement and payment systems, including user, employee and customer directories.

Because it is very complex to keep all of this transaction data organized and secure, we want to provide our customers with a simplified transaction system that offers more payment options through multiple traditional and digital currencies while reducing transaction costs and increasing transaction speeds.

At that time, I realized that blockchain technology could help us quickly improve our technology and solutions, giving us a competitive advantage.

The problem was that I didn’t have a deep understanding of blockchain technology yet, so I made a lot of mistakes along the way.

As a relatively new concept, blockchain is still evolving, so mistakes are inevitable in terms of how to use it correctly. There are many tests underway to see if private blockchain applications have various business uses. Here are some of the mistakes I made:

1. Not really understanding how blockchain works

Although using blockchain technology can make management easier, I made the mistake of thinking that I would be able to fully understand blockchain over time.

Reading some of the available research and how-to guides is definitely a better approach. Getting information from other great companies researching Bitcoin and blockchain is also a good idea. You can also participate in forums where you can ask questions and get a more hands-on understanding.

If I had done this at the beginning, I wouldn't have taken so many detours and wasted so much money and time.

2. Failure to choose blockchain software that is suitable for your business purposes

Initially, I made the mistake of switching to the Bitcoin blockchain for two reasons: 1. I had heard of blockchains before and 2. The Bitcoin blockchain had been around the longest in terms of testing and stability.
These two reasons made the Bitcoin blockchain the most reliable option — but not necessary for my company at the time.

The problem was that the Bitcoin blockchain was not compatible with my business purpose at the time, and I wanted to find custom blockchain software that had already been developed and deployed, because new custom blockchain software would have to be tested multiple times and might not necessarily achieve the same stability as the old custom blockchain.

3. Lack of patience, trying to break through the time required for blockchain applications

I think everyone is as excited as I am about the various commercial applications of blockchain.

However, I found it time-consuming to get buy-in from other organizations. We wanted to get these organizations to join our private blockchain. Not only did I have to convince them of the value of our blockchain, but I also had to agree on using the same software - which was not easy by any means.

4. Consider every business function blockchain can provide

Don’t do what I did because blockchain technology looks like a flexible mechanical technology that can improve all business functions.

But this is not the case, at least not with blockchain at the moment.

The good news is that blockchain networks are only open to a limited number of people, so problems during testing will not ultimately affect your business or brand reputation.

5. Assuming the system is immune to user error

Blockchain networks use domain names rather than numeric-based IP addresses to provide locations, and blockchain nodes are referenced only by public key hashes, making them more susceptible to human error.

6. Unrestricted access to private keys

Not everyone within an organization needs access to the private key files that allow access to the blockchain.

This is because it could potentially undermine the blockchain in essence, as some people simply don’t know what they are doing and could misuse it. While the blockchain network needs to be usable, I have to decide how to determine who should use it.

7. Overburdening blockchain

I realized that by applying blockchain to business applications with large amounts of information and the need to manage various documents, the amount of information stored on the blockchain could increase rapidly.

This is because the blockchain replicates itself as more nodes are added. So in order to reduce the load on the blockchain and restore its processing speed and efficiency, I have to connect the blockchain with external data sources.

Although this will reduce the reliability of the blockchain to a certain extent, it is still a better solution for a blockchain that is burdened by data.

8. Failing to recognize the limitations of blockchain as a database

Although blockchain is a great solution as a secure and private database, it is not capable of storing unlimited data. Trying to use blockchain as any large database is a mistake.

Not only is the blockchain not capable of storing all the information you might need it to, but adding the other necessary database functionality for analyzing that information would likely make the blockchain too complex.

9. Failing to see potential flaws within the blockchain

Because I was so excited about this new technology, I treated it as the ultimate solution - but the reality is that blockchain has many inherent design flaws that need to be addressed.

Blockchain is a system that needs to continue to evolve, which means I have to think more carefully and proceed with caution before integrating blockchain into my company.

Summarize

Like other mistakes in business, these blockchain mistakes have become necessary lessons that have led me to greater success.

The most important lesson - stay open and curious about the various possible applications of blockchain, and then conduct careful and in-depth research and testing.

Original article: http://www.coindesk.com/the-9-mistakes-i-made-when-bringing-blockchain-to-my-startup/
By John Rampton
Compiled by: Kyle
Source (translation): Babbitt Information (http://www.8btc.com/9-mistakes-when-bringing-blockchain)