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If you are interested in the crypto industry, you might have encountered the word “crypto whitepaper.” It is a word that you may struggle to understand as a newbie since it is neither a paper nor white.
A whitepaper is important as it contains all the fundamental and technical information or specifications you might need to know about a crypto project. A project’s whitepaper also lets you know what a project intends to accomplish.
With this in mind, let’s learn the meaning of a whitepaper, its importance, what is contained in it, and examples of quality whitepapers.
A crypto whitepaper is simply a document showing what a project is about, the people behind it, and what they hope to achieve with the project. In other words, a crypto whitepaper shows you the full specifications of a cryptocurrency or the features of a blockchain project. In the crypto industry, a whitepaper is not only limited to a coin or token; you can also come across whitepapers for play-to-earn games and DeFi applications.
The whitepaper contains all the necessary data and diagrams to explain the project’s goal. Assuming you are reading a whitepaper for a crypto token, you will find the maximum supply the project developers have in mind for the token. You will also see the token distribution: which helps you understand tokenomics.
Finally, you get to know what the project developers have in mind for the future. While reading a whitepaper, you should look for their roadmap to see their present and future plans.
A whitepaper can be likened to a traditional business plan today. It helps investors see why they should invest in a particular project. Hence, the quality of a whitepaper should heavily influence your decision whenever you want to invest in a token.
A whitepaper today has become a framework for researching crypto projects. For instance, if you compare two or more crypto projects to know which is better, a whitepaper will give you an idea of the better one.
With a crypto whitepaper, you can easily see the red flags that will cause the failure of a project or make it unsafe for investment. One of them is having all the funds locked in an unidentifiable wallet or that of an individual. Apart from identifying good projects from bad ones, a whitepaper also lets you know if a crypto project keeps up with its promises and plans.
A crypto whitepaper ensures transparency and equal opportunities between the investors and the developer of a crypto project and helps you make better investment choices among other crypto projects.
Although crypto projects differ in their objectives and whitepaper, here is some key information you may likely find in a whitepaper.
The outline is the beginning of the whitepaper and usually contains a breakdown of the overall structure or what you may likely see in the whitepaper.
This is part of the whitepaper that can make you continue reading or leave the project entirely. For project owners creating the whitepaper, you should ensure that the introduction section succinctly explains what the project is all about and what it wants to achieve. At this point, the investors wanting to invest in your project might continue reading or abscond. The introduction should be captivating and may include the prominent developers behind the project.
This is also known as the body of the “whitepaper,” as it is dedicated to explaining in detail the features of the crypto project.
This is where the project developers explain how the project will be successful in the real world. Whenever you read a whitepaper with no use cases, there is a high chance that the project might fail.
Almost all whitepapers have diagrams that explain or illustrate whatever the project developer has in mind. These can include research statistics that make the project viable and the projects roadmap for growth.
The conclusion of a whitepaper is just a recap of what the project stands for and how it intends to achieve its goals. It most times gives full detail of the team members and links to the project handles.
Reading a whitepaper is an action that must be done with care. The reason is that reading a whitepaper incorrectly can make you misunderstand a project’s goals and objectives. Here is how to read a whitepaper.
When you start reading a whitepaper, you should do so with an open mind — Don’t have any assumptions about the project before reading. When you read with an open mind, you will be more ready to assimilate many things faster.
If a project has no uses, it is usually not a good investment. Also, a project that has more marketing budget and almost nothing for project development and keeping the right team could be a ref flag. So checkthe project’s utility well.
If it is a cryptocurrency whitepaper you are reading, then you should check out the token distribution. Ensure that the developers or a certain group of people apart from the users don’t have a large chunk of the coin belonging to them from the onset.
You should also read the timeline to keep up with the present and future project plans. These journeys help you understand if the project aligns with your goals.
Below are some examples of famous crypto whitepapers:
Satoshi Nakamoto published the Bitcoin whitepaper created in 2008; almost all of its plans have been implemented.
Vitalik Buterin created the Ethereum whitepaper, which discussed all the plans which would make Ethereum a blockchain network that offers more than just payments.
Amaury Séchet was the one that created the Bitcoin cash whitepaper, whose goal was to offer a faster peer-to-peer payment opportunity than Bitcoin. It is used today by many e-commerce merchants for checkout.
A whitepaper is a very important document in the crypto industry, and it is needed whether you are a project developer or an investor. A crypto whitepaper repository is a place where you can find project whitepapers for research.
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