Some people venturing into cryptocurrency business have no motivation to read and understand the whitepaper. That is a bit sad. Whatever crypto project you wish to venture into should have a whitepaper. This includes the crypto social projects like Steemit, Hyperspace and Mannabase. The whitepaper is the road map you need to understand before embarking on a crypto project.
What is a whitepaper?
A whitepaper is a document crafted by start-ups to sell the idea of their business. It provides details of what the project is about. It outlines the problem that the organisation intends to solve, the solution to the problem, a description of the product it is offering and its token. The whitepaper can indicate to you, as a user or investor, whether the project will be successful or not. It also indicates the time frame for the success of the project.
Main components of a whitepaper
The following are the main components of a whitepaper:
- The problem and its nature,
- The solution to the problem
- The features of the project that enable the organisation to offer the best solution to the problem,
- Nature and distribution of tokens
We will look at each of these in short. First, we look at the problem and its nature.
Statement of the problem
Every business is established for a reason to solve a certain problem that affects the community. The problem should exist in the market in which the company operates. Crypto organisations, therefore should identify the problems facing cryptocurrency users and the blockchain community. Thus, the whitepaper should give detailed information on the challenges that the industry is facing.
Solution to the problem
The whitepaper should then give a clear outline of how the organisation is going to solve the problem. In describing the solution, it should include how its product/s and services will enable that. It should be clear in the whitepaper that the organisation is offering a unique solution to an existing problem.
The business model/Features
The paper should articulate how its business model will be effective in dealing with the current problem. All the possible strategies and tactics should be clear to understand.
Nature of tokens and its distribution
The paper should indicate the type of token and its nature. Is the token built on an ethereum or EOS blockchain? The number of tokens created should be identified and an outline of how these tokens are going to be distributed to investors and the community. It should also be clear as to the number of tokens the organisation will hold and the reason for that.
Breakdown of Initial Coin Offering (ICO)
The community and investors need to know the stages of the initial coin offering and the timelines. There should be clarity on whether or not there would be a presale and private sale. Or could just there be a public sale? Time frames should be there. For example, when will the presale, the private sale and public sale take place? When will the token be put on the exchanges? Such information is vital for decision making, whether or not to be involved and at whatever level and capacity.
Information on the team
You need also to analyse the team that is behind the project. The team members can show you what they are capable of doing. A good team should have people with mixed skills and capabilities. The team should show synergies that help the project to succeed. The success of the project means that there has been a solution to the problem identified at the beginning.
This article was not meant to turn you into an analyst of whitepapers. It was meant to help you to get a working understanding of whitepapers. You do not just need to jump into a project without knowing its basis. Even if you are going to be a user or a community member you need to know the nitty gritty of the project.
If you are a crypto blogger, the whitepaper is a source of critical information to base your articles on. You should not go broke of ideas to write about. More so, the information I have put above is critical for you if you want to write bounty campaign articles. In each of such articles you need to cover the given aspects: statement of problem, solutions, business model/features, nature of tokens and distribution as well as the team structure.