Everything you need to know about what is a project’s whitepaper, why they need to publish one, and how you should actually read it.
If you ever considered investing on an ICO you definitely had to or have been advised to read the whitepaper. Even if you’re not into ICOs, you heard about whitepaper for sure, and maybe you have already read a few.
What is a whitepaper?
By the power of example, you know what it is. A written document to better understand the technical project behind an ICO. But the whitepaper isn’t restricted to ICOs or crypto-space. A whitepaper is a document long used in business.
According to Wikipedia:
“A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.”
Which describes its use the best. It “helps readers understand”, is an informational document meant to deliver you the best information without the PR and marketing filter of the promotional content we get to find on websites, flyers, or advertisement.
Why do you need to read the whitepaper?
This is the complete and most reliable source for you to understand:
- Why this project exists
- What is the current issue
- How does it plan to solve them
Everything described in detail along with a clear roadmap, team members expertise, and additional details regarding the crowdsale progress.
If you want to be sure you have all the information you need to consider investing in the project, you should start with the whitepaper. It will provide you an overview of everything you need to research, learn, and understand before you can make an educated decision.
So, how do you proceed reading the whitepaper?
You have an ICO in mind, you heard or read a few details about the project or the team and you want to dig deeper and see for yourself if this is a good investment. You’re heading to their website, check the eye-catching images and headlines on their landing page, and decide to download the official whitepaper document.
This is what you should expect to find in any whitepaper you’ll read:
Providing context on what is this about, defining the problem, and briefly explaining the background establishing credibility since the beginning.
Presenting the current state of the market with its issues. The problems encountered can be market-related, business wise, or technological. The project’s technology may or may not solve all of them, but the accent will be one the most obvious ones they’re successfully solving.
Listing the current solutions. These can be competitors trying to solve it with similar technology, businesses available right now soon to be obsolete, or even workarounds the customers have used without a real solution available. In each case, you’ll find reasons why their solution is not good enough.
This is the first section in which you’ll get to know the product more. It is usually highlighted through “What is [project’s name]?” and it’ll present you the proposed solution.
After you got an overview on how they’re planning to solve the problem, now you need to actually see HOW they’re solving it. Full of technical terms and analogies, this section may or may not dig deep into the technologies used, but prepare yourself to read about the blockchain, issued tokens, and security measures.
Known as the money maker! After reading this section you should have a clear view of the product reaching the market and how the customers or organizations will use it. Your investment decision should be based on how big are these problems at the time of speaking and how much money is the product saving to its users. With a short bias and splitting the market between competitors, that’s the project worth.
Listing the team members, what is their current experience, and what are their roles in the development of this project.
Until this section, you should already have a clear view on the idea and if it is worth investing. So here’s the place where you can your math and check if the token distribution is fair.
Acting as a closing statement, the conclusion is meant to give hope, and end on a good note. It can speak about the future steps, summarize what you already read, or include a call to action for the upcoming ICO.
Feeling more confident reading a whitepaper right now? Great! Consider checking an ICO you previously passed on because it sounded “too technical” or you couldn’t understand its use and read its whitepaper with this structure in mind. See if you can now research faster, deeper, and easier than before.