Crypto Whitepaper: The Ultimate Guide for Beginners
That is just how much Initial Coin Offerings (ICOs) have raised in the first half of 2018 alone!
When you think about how that’s nearly double of what ICOs raised in the entirety of 2017, you can see why they’ve become such a hot topic.
Before ICOs became a household name, firms from the fiat world were already doing IPOs or Initial Public Offerings. The idea is extremely simple. Private companies become publicly traded by selling shares of the company to the general public. IPOs require a whole lot of due diligence, formalities, and paperwork. As a result of this, several deserving businesses lost out on profitable opportunities.
This is when ICOs came in and changed everything.
(NOTE: We aren’t saying it is a fantastic thing that ICOs does not do this much due diligence. )
Developers and entrepreneurs eventually had the opportunity to raise millions of dollars without going through excruciating paperwork. The one thing they had to do was to present a whitepaper.
Now, consider this for a minute.
The whole fortune and the future of the company, is revolving round the standard of this whitepaper. This is why it is so important to find the whitepaper right. This single PDF, if done properly, can fetch you countless dollars in under 24 hours.
What’s a Whitepaper?
According to wikipedia,“A white paper is an authoritative report or manual that educates readers concisely about a complicated issue and introduces the issuing body’s doctrine on the topic. It’s supposed to help readers understand a problem, solve a problem, or make a determination.”
The oldest known use of the term”White Paper” was with the British Government and the Churchill White Paper of 1922. Back then, it was thought of as a less extensive form of the blue book, both terms having been derived from the color of the record’s cover.
Ever since that time, white papers have evolved to be a business owner’s best friend. No other piece of document better describes to your investors:
Eccolo Media also ran some survey back in 2013. The survey covers various content marketing topics — such as which collateral types are most often consumed and considered most powerful — and the phases of the sales cycle in which they’re perceived to be most persuasive.
Here are some of the decisions that they have drawn from their research:
- 49 percent of the respondents claimed to have used white papers to rate a tech purchase, which makes it the most often consumed content type
- Whitepapers came out ahead of case studies/success tales, merchandise brochures/data sheets, detailed tech guides, and video/multimedia documents as the most influential type of content marketing
- Whitepapers would be the ideal type of content throughout the pre-sale phase once your target investors don’t know about the problem you’re solving
- Each 7 in 10 respondents said it is important or very important to continue to get content from the seller after the sale was completed. White papers are clearly the most preferred content type post-purchase, followed by case studies and tech guides.
If these numbers and statistics still have not convinced you, then let’s take you back in time to 2008, when an anonymous developer named Satoshi Nakamoto introduced their whitepaper titled,”Bitcoin: A Peer-to-Peer Electronic Cash System”. This whitepaper not only introduced us to Bitcoin, it paved the way for other cryptocurrencies and the whole ICO industry. This whitepaper acquainted us with the blockchain technology.
That single whitepaper has defined an entire era, and it has led us into a multi-billion dollar market. A well-written and well thought out whitepaper can revolutionize an entire industry.
Things to do Before You Begin Writing
Well, even before you begin writing, there’s some homework that you need to take care of. As they say, the battle is won before a single bullet is fired. Here are some things that you Have to Do:
Research, Research, and More Research
Each and every area your whitepaper should pay should be thoroughly researched. You will need to pull all of the details that you can over the issues which you’re going to solve, and how previous attempts at resolving them have failed (if applicable). You can use all these posts as citations on your whitepaper later on, which will increase your credibility.
You need to bear in mind that whitepapers are extremely data-focussed. So, so as to fill up the pages, you need to have a great deal of facts. A fantastic whitepaper is one that’s been supported by significant research. Go all out, don’t take any half measures.
Read Other White Papers
There’s a huge possibility that somebody else is already working on your subject or subject area already. If that’s true then have they already published a whitepaper? If yes then you need to go through them to find the approach they are taking to see ways to improve it. Besides, you can even have a look at the places where you can showcase your job’s USP. Additionally, it’s always a great idea to revisit the classics like the Bitcoin and Ethereum whitepaper.
Therefore, after distilling all of your research and creating all of the diagrams and charts, it can be extremely overwhelming to put everything together in one location and. Thus, you should organize all of your information beforehand so that it becomes simple to manage and structure alter.
Identify Your Audience
What type of audience are you aiming for?
Do they belong to a specific age group? Are they found in a given area? Which subjects are they interested in? What type of people will be drawn to your project?
Once you have an idea of the audience that you will be attracting, you should be able to adapt your speech and Speak to them in a particular way
How To Structure Your Whitepaper
Alright, so you’ve done your homework, now it’s time to bring everything together and make your own whitepaper. Obviously, we understand you might not be the best author, but we advise you to attempt to compose your own whitepaper. Obviously, you might get lucky and find a excellent author who picks up on all of the nooks and crannies of your job. But at the end of the day, nobody knows your product better than you.
There’s absolutely no set structure to a whitepaper. A company produces a whitepaper which fulfills their requirements and approach. At the end of the day, no matter what kind of structure that you are following, a great whitepaper should be able to solve any doubts that a potential investor is having by answering the following questions:
- What is the primary goal of this project?
- Does it have a viable business model?
- Which are the key problems that this business will solve?
- How is it different from its competitors? What is its USP?
- How are they likely to deal with their funds?
- Does the job’s token have some real utility?
- Does this project require a blockchain?
- Who are the team members and what is their credibility?
- Is there a functioning prototype of the project out there or is it simply all theoretical at this time?
Here are some general sections a whitepaper should have:
#1 Headline and Abstract
Headline and Abstract barely takes one page together. But if you do not nail this part, 90% of your readers will leave at once. We do not have to tell you the significance of a headline. How often have you opened an email in your inbox only on the strength of its headline?
A good headline should immediately grab your attention and make you feel intrigued enough to learn more. You do not need to look any farther than”Bitcoin: A peer-to-peer digital cash system”.
An abstract is basically a Tl;Dr version of your job. More often than not, people will read your abstract to understand exactly what you need to offer. A great abstract should hook your audience enough to make them want to read your entire white paper.
Following the abstract, you’ve got the introduction. Bear in mind that you’re still walking on thin ice as of right now. It requires at least 5 pages to receive your audience hooked in. Abstract and Introduction united should be around 2 or 2.5 pages in the slightest.
In the introduction, you need to justify why you’re making your job and then briefly gloss over the present economic, political, direction etc. climate that supports the requirement of your project. Basically:
They successfully showcased the trustworthiness of the item and also how it can improve one of the backbones of their present age, the agricultural sector.
#3 Problem, Solution, and Product Description
Therefore, after the project was introduced, you must discuss the problem that you’re seeking to solve and the solution you have come up with, i.e. your merchandise. Several projects simply showcase over-designed PDFs throwing around a whole lot of problems and solutions without really getting deep in their product.
Now don’t forget, this is where you hook on your audience once and for all. This is the section which makes or breaks your whole business. Take your time to provide a clear, technical explanation of your product and how you’re planning to reach your results. Make liberal use of diagrams and graphics to explain concepts to your readers and to provide visual relief. Hire someone to make infographics to you in the event that you want to. Bear in mind, you must crush it in this section.
Obviously, there has to be specific terms you will need to spell out on your whitepaper to help your audience better understand your product. Or maybe there’s a process integral for you business that you’ve got to explain to your audience (such as how Plasma is integral to OmiseGo). When you haven’t touched those from the intro, then you have to touch upon them today.
Throughout this section, you’re going to be walking a tightrope. You could be tempted to use a good deal of fluffy phrases and jargon terms, but you should limit their use. However, at exactly the exact same time, you shouldn’t undersell your product and solution also. You will need to strike that balance and hit the sweet spot. Be certain that you’re using an educative tone rather than a sales one.
Each and every claim that you’re making throughout your whitepaper ought to be backed up credible testimonials.
#3 Fragrant Economics
Next thing which you will need to describe correctly is the function of your own investment in your business. The token role should be as clearly defined as possible. The more usefulness your token gets, the more valuable it’ll be. The main reason for this is two-fold.
Firstly, if you do not have a clearly defined market, your investors will be more or less speculative in character. They will not have realistic expectations of your own investment, and the moment the market drops, they’re likely to ditch your investment and make off.
This is not exactly what you should want for your token.
Your token should not be a placeholder that anyone will swap for BTC or Fiat at the drop of a fly. It needs to be a proven commodity that individuals are going to want to continue to in their portfolio. Clearly defining the token role will go a long way in doing this.
The idea of token velocity is intertwined with why you’d want people to continue to your tokens.
Token velocity is one of the essential aspects which influence the future speculative value of these tokens, but not a lot of people truly know it. If you were to look at Token Velocity as a mathematical formula, it’s as follows:
Velocity = Total Transactional Volume / Typical Network Value
So, Velocity is directly proportional to the overall transactional volume of a coin and is inversely proportional to the normal network volume. If you reverse this formula around, then you get the following:
Average Network Worth = Total Transactional Volume / Velocity.
Meaning, more the token velocity, less the typical network volume of this ecosystem.
Alright, so we got lots of mathematical definitions, but what exactly does this mean and why are we saying that this might be the best indicator of ICO success.
Velocity basically is a sign of how much individuals respect the job’s tokens.
#4 Token Usage Guidelines
Imagine if you were to invest in an ICO, would not you need to know precisely how the company will use your hard-earned money? That’s precisely the same respect that you ought to extend to your investors. The thing is that the modern day investor is extremely savvy. With the sheer quantity of scams which have been happening, it makes sense as to why they’ll be more cautious about where their money is going.
Because of this, you need to have a thorough plan and layout about how you’re going to be spending your money. The investors should make certain the money will construct your product instead of easing the way you live.
Standing, who raised more than $100 million in their ICO said that pretty clearly. Here’s part of what they’re likely to do with their funds:“20 percent of SNT created during the Contribution Period will be allocated to Status Core Dev; the founders and staff, over a 24 month vesting period, with a 6 month clif. This means Founder tokens won’t be immediately tradable, further aligning the Founders pursuits with executing on the long-term goals for the job.”
#5 Road Map
Each whitepaper should have a RoadMap which records the vital events for the business and their deadlines. The segment can be stylized as a chronological arrangement which is more visual than text-based.
Why should a RoadMap be given?
- Firstly, it provides a fantastic notion to your investors about how your project will pan out. This was they could have realistic expectations.
- Second, it enables constant monitoring of the development of the project. It will keep the job developers constantly accountable.
At the minimum, the RoadMap should have a detailed working plan for the next 12–18 months, which should include the beta-launch.
#6 Team and Advisors
Easily one of the most significant part your whitepaper is the section in which you present your readers to your group. A well put together staff or personnel and advisors can go a long way in securing heavy investment.
Let’s provide you the case of OmiseGO
These are the advisors They have on-board:
- Vitalik Buterin: The guy behind Ethereum
- Dr. Gavin Wood: Ethereum co-founder and creator of Parity
- Joseph Poon: One of those co-creators of the Lightning Network
- Vlad Zamfir: Ethereum co-founder and Casper protocol founder
- Julian Zawistowski: The creator of Golem
- Roger Ver: Owner of Bitcoin.com
Does it surprise you that they could raise $25 million in under 24 hours?
The group section is the main part of any white paper. Period.
You should be certain that you’re surrounded by a terrific team AND it’s also wise to be certain that you’re showcasing them and their abilities properly on your whitepaper. Most ICOs out there do not even have a suitable blockchain engineer in their team! Having no one in your team with important blockchain encounter is a clear indication that the project isn’t likely to go anywhere or, best case scenario, the progress will be extremely slow.
How to Design Your Own Whitepaper
Ok, so now you understand how to begin writing your whitepaper, but the presentation is just as significant too. There are numerous important areas where you should focus in on. (Huge shoutout to Agentestudio.)
First, the cover page of your whitepaper should look sleek, neat, and professional. Nagricoin hits the nail with this one. Does their cover seem fantastic, but you also immediately understand what they are about.
Pictures For Explanation and Relief
There should be graphics throughout your whitepaper that:
- Explains the procedures that you’re talking about.
- Gives your readers a relief/break in the content
The Bitcoin whitepaper does this by often throwing in diagrams to describe how various blockchain mechanics work.
Monetha uses a Lot of charts in the middle to back their claims:
Jazzing up your Whitepaper
Try to look for different areas where you are able to add some fun design element without compromising on professionalism. WePower does that brilliantly with their group page. They understood how important and carefully scrutinized that webpage was going to be, so they just made the read more pleasurable but designing it in a cool manner.
Common Pitfalls to Avoid
If you are thinking about auditing your ICO whitepaper to get another opinion, then you need to do these tests before you send it over. These are a few extremely common mistakes which all whitepapers make which you can avoid with a simple check:
- Spelling mistakes: Just do not make these. They look extremely unprofessional. An easy Grammarly check should be sufficient.
- All your decisions and perceptions should be objective rather than subjective.
- Over-ambitious goals that aren’t backed upthe majority of whitepapers will make extremely far-fetched goals with no backing whatsoever. If you’re claiming that you will do something, then you have to at least show how you’re going to do it. Actions speaks louder than words.
- Token Dynamics: If your token does not make any sense then you need to return to the drawing board and begin reworking your whole model immediately.
- Team: Each and every member of your staff should be up to the job. Bear in mind, an interested investor WILL check up on your group members. Be certain that you don’t have any weak links.
- Unrealistic Roadmap: “WE ARE GOING TO BUILD A MULTI-LEVEL BLOCKCHAIN AND SCALE TO MILLIONS OF TRANSACTIONS PER SECONDS IN TWO MONTHS!!” No..you aren’t.
- Common Formatting Mistakes: Are you using images of different resolutions during your whitepaper? If the font and font size not consistent? Have you got an inconsistent layout?
The Ultimate Guide to Crypto Whitepaper: Conclusion
Before we finish, we have to say something here. While these guidelines will assist you, we highly suggest that you begin reading other successful ICO whitepapers as far as possible. They’ll teach you more than anything else. We wish you all the very best and hope that you create a totally killer whitepaper!