Why Blockchain needs more failures to succeed

William Mougayar is the author of "The Blockchain Business" and a consultant for investors, various blockchain projects and startup projects (see disclosure section).

Tired of cheating? In this opinion, Mougayar argues that more failure is needed than what we need to put the blockchain technology to new heights.

In the world of starting a business, learning from failure is an unavoidable reality, and is part of normal wisdom. That's how ecosystems and entrepreneurship go higher, and with more success.

But in the blockchain phase, we have not seen much failure. At the very least, there is no scale and variety needed to extract long-term lessons for the industry. And certainly, not enough to warrant a call for an impending crash or repair.
Failure is important because summing it up gives us a new, rich knowledge with the best insights and practices.

The consequences of real failures can make the entire chain block ecosystem more flexible because it will show the boundaries and the reality of what is possible, useful, unreasonable, impossible. Contested, repetitive, and scalable; Go beyond what has happened, become more reasonable and creative from the beginning.

There are a few lessons learned from the recent blockchain failures, but not enough:

ETEREUM BITCOIN'S PROTECTION

Lesson: Good practice to prevent the fluctuation of virtual currency, after upgrading your token code.

Background: By 2014, bitcoin prices had fallen from $ 600 to $ 250 as soon as the etherum raised its ICO chartered capital, which reduced the budget and equity of the Ethereum Foundation, which is primarily held By bitcoin. Risk hedging in virtual currency is still not widely applied in 2014.

Mt Gox and Bitfinex robbery

Lesson: Security in virtual currency exchange is extremely important. Although people are improving on this issue, cryptocurrency transactions do not have bank security norms and leave consumers alone on deposits.

Consequently, users with multiple stakes are still at risk and need to secure their own money storage, or at least diversify where they store their virtual currency.
DAO HEIST
Lesson: Legal and financial coordination in smart contracts is not easy and can have serious consequences if code weaknesses can be exploited. Weakness in code is not just like a bug that can be forgotten after it has been fixed. In addition, you can not fully automate what you do not have much experience with.
FAILURE IN THE FUTURE
These are just a few initial failures. The common ground between them is the best practices and the real lessons to move forward. But we need more spectacular failures

Those who look forward to the decline may fall into the following categories:

+Try to apply blockchain or tokens to places that are not suitable for them.
+Default entrepreneurs promise to bring the product to market

+The hypothesis with the blockchain exaggeration statement is that the hammer and everything is a nail
+ICOs increase money, but do not hand out, one or two years after launch
+Lack of transparency led to unexpected delays that showed the emperor had no clothes
+More scams, theft and non-password stupid shit.

There are other aspects that we need to look at better. This is not a failure, but they are developing objects that may benefit from some standardization of best practices.

+Admin or notifier based? Where is the appropriate model for open, transparent and public practices of hierarchical cryptocurrency management?
+Token Owner Rate: Is it up to a maximum of 20% that a platform / protocol or ICO application should retain? What if they controlled 80% of the token code?
+Valuation: The rush with ICOs is making the value jump, before value - whether it's protocols, software solutions or applications. Will the level of market tolerance continue to exist without any serious impact?
ON SECOND ACTION ONLY

There are many types of blockchain projects included in the first version of the blockchain application effort. Typically, in the second iterations the success rate is higher and the base is higher.

+Amazon and YouTube are not the first attempts at e-commerce or video broadcasting. Previously, similar service providers had failed and prioritized the final success of the two giants.
+Ethereum is formed after people notice some limitations in bitcoin and colored coins.
+Steemit is the second act of Dan Larimer, after lessons from BitShares.
Let's not forget that the early years of the web were full of spectacular failures. Webvan, Pets.com, eToys, Flooz, DrKoop.com and Kozmo are among the losers. They learned about avoiding things, and their second success was much more successful.

In short, can push the limits further to create a greater intensity of failure. Acceptable pass what is possible, so we can rally and see the real playing field.

If we agree that a crash in the end is inevitable, the typical crash occurs only after many mistakes are made.

In my opinion, we will need to witness greater failures and cause more damage to complete the circle of madness and initial discernment accompanying the figure. Into the market early, including the need to stop operating. Only then can we begin to predict that the possibility of collapse is imminent.

I really want to see the failures and the passing of the limits, not just to quickly collapse, but also to acquire the lessons we need to learn, to continue to grow further.

If we do that, we will complete the circle of madness and premature recklessness associated with the early market formation and once again prove the validity of the Carlotta longstanding model. Perez.

This article originally appeared on the author's blog, StartupManagement.org, and was republished here with his permission. A few minor edits have been made.

Disclosure: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.