We have heard it hundreds of times. Blockchain is Web 3.0 or the latest wonder of Geekdom. Entrepreneurs or entrepreneurs who take advantage of this technology when young people make it rich. Innovators like Ripple have transformed an investment from $ 10,000 to $ 1.5 million over five years. Binance, which is only one year old, has a market capitalization of $ 840.8 million, according to co-financing of Co . So it is understandable that you can speculate on the launch of your company blockchain. You may not want to innovate anything, but, hey, blockchain would be the next revolution. Blockchain fanatics say it is a fundamental element of differentiation and value, which leads you, if you have a business, to think very likely that you should jump on board.
A few years ago, I interviewed Brian Winkers, founder of blockchain money automation company bitlov.com who won first place in 2015 StartUp Chile! Competition.
Winkers himself is an open source developer and an analyst with Bitcoin who played with cryptography projects since 2012 and has helped small and medium-sized businesses to rise, or rather, more often, out of the blockchain.
For Winkers, blockchain for small businesses is a bizarre idea, largely due to Bitcoin. The Bitcoin platform has problems of scalability: the platform is slow (19659002) about ten transactions per second compared to 5,000 and 8000 Visa transactions in the same period of time. The ledger became congested. The society itself struggles with internal quarrel.
The truth is that Bitcoin is competing with more scalable and less problematic platforms like Ethereum and IOTA, so businesses can profit from the blockchain more than was possible, say, ten years ago.
is the expense.
Blockchain technology is free if you want to do all the work. The problem is recruiting a blockchain developer, and that's where the problems start. As of 2018, a decent developer of blockchain costs from $ 150,000 to $ 200,000 at a minimum. Forget fly-by-night freelancers from a platform like Elance, Guru or similar. Actually employing someone from such a platform could cost you more, as you may have to pay for mistakes. Any coding error or minor incident means that the ledger must be dismantled and rebuilt from the ground up, apart from which technological changes happen so quickly that prominent blockchain developers get to know the updates regularly.
Do you want a main developer? And xpect pay $ 250,000- $ 450,000 for a magician, or triple that for a world-class specialist, according to Pavel Supronov on Medium . Do you think that blockchain saves you money? According to John Levine cryptographic consultant, author and speaker, blockchain is the most expensive database ever invented.
To get a ROI from your blockchain investment, you need some GREAT idea that is extraordinarily different from competitors and that delights hordes of people. (Think of a ripple or binance). One such company, according to Winkers, is performed by only two percent of ICOs or startups.
" In all my years," Winkers told me, "I only found an ICO that makes sense, and that's what I'm in. A Russian company called Visor is trying to create a currency I'm providing some technical information, more on the architecture side, I think they have a good team that understands the need to meet the underlying business needs.This is not a big payday. "
Winkers added:  I regularly tell companies not to proceed with Bitcoin, but to focus on more conventional solutions. I try to help them customize their business, understand what they can do. Unfortunately, most of the people who approach me are dazzled by Bitcoin and the ledger. They do not understand it … but almost everyone does it so they want on the wagon of the winners. Now, if they had a wonderful and extraordinary useful idea that could be one thing, but often emerge with impractical and unattainable "solutions", it is a waste of time and money.
At the end of the day, if your mind is on blockchain for fame or money, Winkers doubts that you will succeed. You'll want to have a solid idea that makes sense and lasts for decades.
How about if you do not want to innovate, but is it sold by blockchain clamor and you want blockchain to speed up your business? Do you read such reports from the management consulting giant Accenture and McLagan who insisted that blockchain promises cost savings of 70% or more in financial areas? Or read EY of 2014 how do blockchain-based companies outperform competitors?
Well, the blockchains have some problems that you would like to know …
The National Institute of Standards and Technology (NIST) – a non-governmental agency of the United States Department of Commerce – recently published a report for beginners in blockchain and entrepreneurs often tempted by new technologies.
The report highlighted that blockchain can not control user behavior. NIST also highlighted the misconception that blockchain is "without trust": great confidence is needed in technology, in developers and in user cooperation for blockchain operation. In addition, users must manage their private keys that, once lost, are more difficult to recover than user names or passwords on centralized platforms.
Furthermore, blockchains are extremely inefficient. Create a blockchain and you will need every single user to constantly archive and update a complete history of everything that happened on that blockchain.
Finally, but not definitively, blockchains also require a computational challenge to limit the creation of new blocks. If it's too easy, hackers could temporarily mobilize enough computing power to rewrite history; if it is too difficult, each new block will consume megawatts of electricity. And the electricity for the blockchain costs hundreds, if not thousands, of dollars.
As we speak, blockchain continually improves. The most modern technologies produce decentralized platforms with greater bandwidth, faster, cheaper and easier to program. The IOTA, for example, uses a "blockchain" that is not the traditional format, but a new Tangle call that puts the expenses and extraction time at risk. IOTA transactions are super fast and process multiple transactions at the same time. Its structure is perfectly adapted to the Internet of Things (IoT), where products and appliances such as automobiles, appliances and machinery "intertwine". "Next Generation" blockchain businesses such as IOTA report a smooth, fast and cheap experience that almost resembles that of the Web.
- A unanimous decision tree that floats on the Web can solve your problem.
- Ask yourself:
- ] If you need a database, are all the writers or participants on your team known and trusted? C & # 39; is it something you have to hide? Do you need to hire, or engage, trusted third parties? Do you need to check the functionality? Are your transactions private? If your answers are "no" flat to each of these questions, stick to a standard database or use a public blockchain.
- More than one participant must be able to update the data? Do you need to hire third parties that you're not sure if you can trust? Do you have any confidential data? You and all the updates on your team hardly know one another or do you have any qualms about one or more users? If you answered "yes" to one or more of these questions, use an authorized or hybrid blockchain.
- Data must be kept private? Do you need to check who can make changes to the blockchain software? Do you have the money for blockchain programming and maintenance and continuous updates? Consider a private blockchain.
Even then, Winkers would tell you to carefully brood your decisions.
"I have always worked to make sure that small businesses are not exploited by others in technical fields," he told me, "and this includes blockchain." For some it is the right path for others, it is an expensive diversion. "
"ICO companies investing in blockchain have a 98% failure rate, which is not the way," Brian insisted, "that I would like to take."
- Ask yourself: