48. What is a whitepaper? What is its purpose, and how do you write it?
A whitepaper is nothing more than a document published by a company or a non-profit organization. It is intended to promote or highlight the proposed solutions of a particular product or service – not just from the world of cryptocurrencies.
In fact, the whitepaper is also used in politics, to present the government and the legislation in question.
What is the purpose of a whitepaper?
Whitepapers are mainly sales and marketing documents. They are designed to encourage or convince a potential customer to learn more about a particular product, service, technology, or methodology. The information presented in the whitepaper is often supported by research and statistics from reliable sources. They contain many charts, data, tables and other interesting visualizations. It is also interesting that the whitepaper also conveys the philosophy of the organization in question.
What is a whitepaper in the cryptocurrency industry?
It is also a form of guiding to attract an investor for a particular project. When a new project or cryptocurrency is launched, the company responsible for it publishes details about it in the form of a whitepaper. This document explains the commercial, technical and financial information.
Here you will also find many facts, statistics, diagrams, and visualizations about the cryptocurrency or the project. All this to highlight the importance and impact on the digital asset industry. Of course, writing a whitepaper is not a necessity and not every company, project or cryptocurrency needs to have one. However, such a document conveys a sense of professionalism and legitimacy.
In the world of digital assets, a whitepaper is usually written in simple and understandable language. Even the common man – the non-advanced investor – will understand the basics.
A professional whitepaper – what should it contain?
In the context of a cryptocurrency project, each whitepaper should answer some specific questions.
- What is the project about? That is, an explanation of the concept. A good whitepaper introduces the project to be launched. It also gives a general overview of the purpose of the project.
- How does the project or cryptocurrency work? A well-written whitepaper needs to discuss how the project or cryptocurrency works and operates.
- Why do investors need it? This is what is called validation. Every investor is very interested in knowing why they should invest in this particular project and why it will meet their needs. The whitepaper needs to clearly convey this information and appeal to the users.
- What technology was used to create the design? This aspect must be explained clearly and transparently in the whitepaper.
- What is the tokenomics of the project? The success of any project depends on supply and demand. Therefore, the visualization of tokenomics is crucial for the successful sale of a cryptocurrency project.
- The team. Who is behind a particular project? A separate section should be dedicated to answering this question. The whitepaper should describe the staff, funders, advisors and founders of a particular project or cryptocurrency. Such a section informs potential investors about the skills and achievements of the team members.
- What are the plans for a particular project? That is, information about the roadmap. This is an agenda of the project, a presentation of monthly or quarterly goals using a corresponding chart.
Why are whitepapers so important?
Because they create confidence among investors. They also introduce a new crypto project or cryptocurrency to the whole world. Such a document is a collection of the most important information about how it works, its purpose and, more generally, about the whole project.
The whitepaper contains all, even the smallest, details about the described topic. It thus ensures that there are no ulterior motives behind the project in question.
Examples of white papers
Bitcoin, of course. Satoshi Nakamoto published a Bitcoin whitepaper in 2008. The entire document was called: ‘Bitcoin: A Peer-to-Peer Electronic Cash System.”
Ethereum. The whitepaper was published in 2014. It was written by just 20-year-old Vitalik Buterin. The title of the whitepaper is ‘Ethereum: A next generation smart contract an decentralized application platform’.
Polkadot. This whitepaper describes the main features of the project and the open source cryptocurrency. Gavin Wood titles his whitepaper as follows: “Polkadot. Vision for a heterogeneous multi-chain framework’. The whitepaper was published in 2020.
A whitepaper is a multi-page document that provides investors with key information about a particular project or cryptocurrency. A whitepaper must contain the necessary information to get to know a project and to get a first idea of whether it is worth investing in the project.
Whitepapers are therefore an indispensable part of any project. Interestingly, companies publish whitepapers to attract the attention of potential investors. Such documents are written in simple and understandable language.