Top 5 Threats and Pitfalls to BlockChain
The technology is elegant and has a purpose in our world. The rewards and potential of cryptocurrency are great. The evolution and spread of blockchain adoption will be invaluable. There are also many, many pitfalls and here are my top 5.
Number 5: Overzealous, aggressive advocates.
There are a lot of businesses surrounding themselves with soothsayers, committee organizers, association disruptors, marketers, developers and consultants in the blockchain space. There are a lot of great views and debates, but there are also the overzealous individuals who make blockchain sound like a biblical text and they are the only messengers of good. There are a number of these, who will go unnamed, but whether its ego, aggression or passion, the zealous advocate is one who shuts the ears of potential converts. If this sounds religious, it kind of is.
With every idea, there is passion. My hope is that the ones that are shouting from roof-tops don’t go too far in their zest, calm their egos and admit, that blockchain is a database and they are just ‘liking’ the idea of it.
Number 4: Idiots like Jamie Dimon
Along with the zealots, are the doomsayers and opportunists like Jamie Dimon. Hypocrites and gold fever will make a bad name for the whole industry. These kinds of people cause trouble, delay the peak and offset the long tail adoption.
Number 3: Code Forking and Disagreements
Developer spats are nothing new, but these spats affect the entire cryptocurrency economy. In-fighting and bitter disagreements have extremely negative effects.
A fork is when a set of developers decide to take the existing code, clone it and do the changes they desire. The developers get frustrated and go their separate ways. Known forks that have resulted in a split, or a fragmentation of bitcoin in some way include Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited, LiteCoin, Dash, Zcash and recently Bitcoin Cash and possibly Bitcoin gold. These are tremendously damaging to the overall architecture and ecosystems at this early stage in the technologies lifespan. Bitcoin is young and requires nurturing, not divorce and custody battles.
Number 2: A few small or a large ICO blowouts
I am not a fan of the ICO trend. I will continue to stay away from it. The ICO threat is a large one. It will only take a couple of limelight failures to view the entire industry with distrust. Governments, like China, are correct in viewing this with suspicion. It actually doesn’t matter whether your ICO is upfront, legitimate and well-intentioned, as when it fails, it will spell disaster in the press.
The ICO scandals are only beginning. Let’s hope it doesn’t burn us all.
Number 1: The BlockChain Bubble
Businesses are built on value. The blockchain is not a substitute for business value. This has somewhat missed the thoughts of a large number of startups who concentrate on the technology, and not the functionality and needs of the sectors they are in.
The push and drive of blockchain technology must be sure-footed, have successes, but instead, the rush is causing mistakes and venture capitalists are funding crazy ideas.
For example, without mentioning names, a particular startup wants to create a global asset search and find, across territories involving different laws in each territory with governments disallowing information to flow in such a manner. This startup claims it will have the system complete in 1st quarter 2018. This is pure lies and deception, yet there are venture capitalists on the bill, including a well known South African VC.
Another common aspect among startups is lack of skill-set in the industry they claim to be in. You see a page of meet the team, and there is not a single manufacturing expert among the developers, founders, and consultants.
Please be careful. Put your money in solid business ideas. Set aside your ego and dim your gold fever. The blockchain is just a database technology with some added benefits. You would not be going crazy fever over my startup if I told you I was using a SQL Server database with replication, read-only (immutable) and comes with TSQL (transactional structure query language), capable of creating smart contracts.
Let’s build blockchain into a powerful new architecture for data sharing across the web, but let’s not kill it with our stupidity.