Initial Coin Offering (ICO)

ICOs are a great tool for startups that want to make products or services based on a blockchain. The tool allows them to raise funds for new projects that center their value proposition on the use of tokens. Typically, a document called Whitepaper presents the content of these projects.

What is a Whitepaper

Many people wonder, what is a white paper? The whitepaper is a detailed description of the project for users and investors.  It allows them to assess its prospects and benefits and decide on possible funding. The quality of a whitepaper greatly increases the chances of success of a project. In fact, it is the tool to attract the attention of potential investors and thus attract the necessary capital to carry out the project.

A typical problem with these documents in the crypto world is that they can be difficult to understand or hide the inconsistency or lack of feasibility of a project. The public, despite the rise of cryptocurrencies, are not so knowledgeable on the topic and are therefore unable to understand the contents in detail. 

Because of this, investors run the risk of being scammed with projects that have nothing innovative, or no possibility of actual implementation.

On the other hand, the people who write these documents are usually engineers. However much they simplify terms and concepts, the whitepaper may not be easy to understand to everyone. This is why both sides have to make an effort. The writer must try to make the content easily understandable; the reader must have some level of training in the topics. 

The alternative is to use companies specialized in whitepaper writing or analysis.

Contents of a Whitepaper

In general, a crypto whitepaper should be simple but contain all the important technical, financial, and business details. To properly convey the information, the text should be divided into the appropriate sections.  The numerical data should then be represented in charts and graphs and then summarized in one or more tables.

The reader of a whitepaper expects to find answers to the following questions:

• What problem are you trying to solve with the project?

• Using what method will it be solved?

• How soon will the project be over?

• Who is working on the project?

• What is the use of tokens and how does the investor benefit?

• How is the project being funded?

• What will the project managers spend the funds on?

• What promising developments lie ahead?

The problem you want to solve

Every new project tries to solve a problem that exists or will arise in the near future. This is the first thing that a whitepaper needs to highlight. This is to make sure that people know that the project has a concrete and useful purpose.

How you plan to solve the problem: technology

This point is the most important one for a crypto investor. After going through it, the reader will be able to understand which idea he should invest in. The team must clearly explain its intention and define the central goal. The reader should be able to find a major innovation in the whitepaper that will ideally change the way of doing business. In particular, investors will appreciate useful innovations that can directly affect network users.

Application field

A potential investor must also pay attention to the target industry. He or she will need to assess how profitable the introduction of a new high-tech product will be and how consumers will react.

Tokenization

As cryptocurrencies or tokens become a means of investment, a potential investor should understand the project's financial system in detail. Tokens can play the role of stocks, but often the tokens become a unique means of payment within the digital system for the use of the technology.

Conclusions

A whitepaper is a key element in raising interest and funds for blockchain and tokens projects.

After reading the whitepaper, the user can determine how high quality and promising the proposed development is. A successful project has a detailed and easy to understand description. 

In order to make the document understandable to the widest audience, it is necessary to find a suitable language. It must be simple but without losing the technical value of the content.

If the proposed system is of high quality and solves important global problems, it has a good chance of success in its field. Also check out another post about the future of tokenization!

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