Mastering Rails involves not only understanding its core principles but also implementing best practices to enhance your web development workflow. Here are some essential tips to help you succeed:

1. Know the Rails conventions: Rails is built on the principle of making assumptions about what every developer needs to get started. Familiarize yourself with the convention over configuration philosophy to speed up your development process.
2. Embrace the DRY principle: Don’t Repeat Yourself. Reusing code through shared partials and helper methods will lead to cleaner, more maintainable code.

Another vital aspect of mastering Rails is optimizing your application for performance and security. Here are a couple of strategies:

• Utilize caching: Implementing caching strategies can significantly improve your app's response time. Look into fragment caching and low-level caching to minimize database queries.
• Regularly update dependencies: Keeping your gems up-to-date not only enhances performance but also guards against known vulnerabilities, ensuring your application remains secure.

When working with Ruby on Rails, developers often encounter a variety of challenges that can impact project efficiency and performance. One of the most common issues is the complexity of asset management. As applications grow, managing JavaScript, CSS, and image files can become cumbersome. To overcome this, developers can leverage the built-in Webpacker tool, which helps streamline the process by allowing for better organization and compilation of assets. Additionally, utilizing techniques such as code splitting can enhance load times and overall application performance.

Another challenge that Rails developers face is dealing with database optimization and query performance. As the application database scales, poorly performing queries can cause significant bottlenecks. A practical strategy for addressing this issue is to conduct regular database indexing and use tools such as the Rails console or Bullet gem to identify and eliminate N+1 queries. By actively monitoring and optimizing data access patterns, developers can ensure their applications remain fast and responsive, even as data grows.

When structuring your Rails application, it's essential to follow best practices that promote maintainability and scalability. One of the core principles is adhering to the MVC (Model-View-Controller) architecture, which separates the application logic into three interconnected components. This separation allows for better organization and enables developers to manage complex applications more effectively. Additionally, making use of RESTful routes helps in defining standard actions for your resources, ensuring a clean and predictable URL structure.

Another crucial aspect is the proper organization of your directories. It's advisable to keep your models, views, and controllers in their designated folders within the app directory. Furthermore, implementing concerns for shared code and service objects for complex business logic can simplify your controllers. Lastly, maintain a clear structure in your config and lib directories, ensuring any custom libraries or configurations are logically grouped to enhance readability and collaboration among team members.