130  Blockchain

also essential to start your own ecosystem with trusted parties as

members or join an existing consortium after due diligence.

• Blockchain projects or POC fail in the middle of the project due to the

appearance of unknowns that were not thought of before starting the

project. Some of the surprises are listed below:

⚬

⚬Incorrect choice of blockchain technology components

⚬

⚬Incorrect selection of blockchain product

⚬

⚬Incomplete non-functional requirements like performance, scal-

ability, security requirements etc.

⚬

⚬Lack of architecture design for the blockchain use case to incor-

porate data security, data governance and regional compliance

requirements

• It is highly recommended to create a detailed project plan with a

detailed business and technical design before kicking off the project.

• Blockchain projects can turn out to be very expensive from a finance

cost perspective. It can also have high environmental costs like elec-

tricity usage due to mining activities. All these factors can have a

potential for regulatory, social and political retaliation against the

project or a business.

⚬

⚬Cryptocurrencies’ electric consumption is getting noticed by envi-

ronmental and government agencies now.

⚬

⚬Cambridge university has created a webpage to calculate Bitcoin

Electricity Consumption Index. It gets refreshed every 24 hours

(https://ccaf.io/cbeci/index).

⚬

⚬Bitcoin is the biggest contributor to electricity consumption as it

uses a consensus algorithm called ‘Proof of Work’ and each block

takes about 10 minutes to be added to the blockchain by miners,

due to the complexity of the puzzle (Figure 4.5).

• There is still a lack of regulatory oversight and standards for block-

chain technology including cryptocurrencies. Blockchain projects are

subject to high risk due to a lack of regulations and governance from

governments. Although regulators are continuously working on set-

ting up legal standards to govern and control blockchain technology

use, we are still not at the end of the tunnel yet.

• Blockchain technology usage is still getting mature. There is a lack

of practical experience and skills in the market to initiate, design and

deliver an end-to-end project for production use. This gap in skills can

lead to project failure prematurely.

• There can be a misconception about blockchain technology as a means

to an end. For any enterprise-level application or ecosystem to work

in a production environment, there are multiple components involved.

Blockchain is one of the components to provide an immutable and

transparent record within a distributed ledger. This lack of knowledge

to produce an end-to-end application using blockchain can lead to a

potential delay or failure of the project.