A whitepaper is a document detailing an outline of a problem that a blockchain-based project is seeking to solve, the specific solution to the said problem and a clear description of the product or service, the architecture design and how it will interact with the users. All Initial Coin Offering (ICO) must have a white paper for it to be successful.
A whitepaper can also be a document that offers crucial information to prospective customers and funders to influence their decision towards your company or a specific project.
It is an authoritative guide that seeks to inform the readers on a complex issue and offer an idea the best way to resolve the issue. Therefore, whitepapers are formulated to assist the reader to understand the issue or the problem, the possible solution to the problem and guide in decision making.
In a business context, a whitepaper can be equated to a marketing presentation as they are designed to persuade potential investors or customers about an incoming project.
Contents of a white paper
There are no set standards on the best structure to use while preparing or examining a white paper. However, its contents should contain the following, but should not be limited to the topics below:
A whitepaper starts with an introduction and in most cases begins with a disclaimer. A disclaimer can be a legal notice that explains any important restrictions or even notifications to the reader. These can range from informing the reader that residents of some countries are barred from participating in the project as a result of local or international laws or informing prospective customers that the investment does not guarantee profits.
It is important to note that a compelling introduction can make the difference on whether someone will buy into the project or not. In regard to this, a majority of whitepapers present their introduction as a letter from the CEO talking to future investors in the project.
Description of the project
This section explains the problem that the project seeks to solve offering a detailed explanation of why the problem should be solved and what might happen if it is not solved. It is also at this juncture that the whitepaper explains how the project will fit in the current market. The whitepaper should also offer details on how the product or service will help in solving the problem or issue identified.
If the project involves the implementation of a cryptocurrency or tokens, the whitepaper should offer details on how the tokens will be distributed. How the tokens will be implemented, how they will work, what the investors will get after purchasing the tokens and so on.
A credible whitepaper should offer the reader a good understanding of the management and development team behind the project. It is imperative for the reader to know if the team behind the project has the right blockchain experience to make the project a success.
How the raised funds are going to be used
It is important to address how the funds raised will be used in the development of the project and marketing.
A whitepaper should give a roadmap of events that will take place for the reader to know what to expect in different timelines. Ideally, this involves a working plan of about 12-24 months.
A whitepaper is the most imperative aspect of any ICO and as a prospective investor, it is important to read and fully understand it for you to make an informed decision to avoid investing in scams. As a developer, it is important to understand that a whitepaper is your selling point and, as such, should make it simple for the readers to understand.