Before explaining what a cryptocurrency white paper is, we need to explain the meaning of white papers in general. Business-oriented individuals will come across this term at certain points in their careers, especially if they are dealing with technologies.
The white paper concept became a frequent term within the crypto industry. For example, investors became accustomed to reading white papers before investing in a particular crypto project. For many crypto ventures, a white paper became a significant part of their launch process, along with new crypto regulations that emphasise the need to create such documents.
Simply put, a white paper presents a report that explains a certain topic or issue to its target audience. Depending on what it is about, it assumes the role of an educational tool for its readers. White papers are used by a wide array of entities such as start-ups, government agencies and non-profit organisations.
White papers are not a new thing; they have been around for approximately 100 years. In the past, white papers were tied to government agencies that informed the public about their decisions.
If you wonder why they are called white, there is a simple explanation. The British government referred to them as white indicating that such documents are available for public access.
Since then, white papers have been widely adopted for commercial usage to lay down technical specifics and inform potential customers of their purpose, and intentions to resolve pain points associated with a particular industry.
A cryptocurrency white paper presents a document that sums up all the key information on a blockchain-based or cryptocurrency project. Generally speaking, it includes a set of prescribed elements such as the crypto project’s main objectives, products, services, used technology, parameters that give a cryptocurrency its economic value, and information about the team behind the project.
If you want to find out how crypto start-ups acquire early-stage investments, why not read this article: 'Early-Stage Investments in Crypto Start-Ups: What are Venture Capitalists Looking For?'.
A crypto white paper assumes the role of an introduction to crypto projects as well as evidence of the projects’ credibility. It typically contains all relevant technical, financial, and commercial information.
While some white papers are oriented towards raising capital, many of them are used to simply pass information to the crypto community. The first use of a white paper within the crypto space was to announce a new project and inform the community.
Essentially, a white paper either introduces, explains or justifies a new idea or technological solution. While reading the document, the reader should be able to get a general picture of the idea or solution, and understand its basics and technical aspects.
Readers should be able to get a grasp on how a new solution works and which processes are involved. Furthermore, it should break down the whole concept into parts, explain them, and make the reader understand how they work as a whole.
When it comes to blockchain projects, justifying a novel idea or solution is a key aspect of the white paper. Blockchain-related white papers frequently explain the reasons for the new technical solution that is being launched and the economical standing of the token they are issuing.
For example, if you want to raise funds for your crypto start-up, you need to justify the mere existence of your project, the token you are issuing to raise funds, marketplace considerations and why is it such a good solution. If you want potential investors to give you much-needed funds, it must be rationalised and explained. It is as simple as that.
Many crypto projects utilise white papers as a marketing tool, but it also mirrors the tone of academic papers. White paper writing frequently comes down to a formal message presented in clear and concise language. By doing so, businesses show respect to their audience. A reader needs to take on a logical approach to gain a deep understanding of relevant information and technical details.
Despite being used as a marketing tool, a white paper is not a sales pitch, but an informative document that provides valuable insights. It is important to keep in mind that the educational aspect is the white paper's main feature.
The MiCA regulation obliges companies to create a crypto asset white paper and prescribes mandatory content and form elements in article 5.
A good white paper will engage readers to notice the brand and drive investments and sales indirectly. It is a general recommendation within the crypto ecosystem to conduct a due diligence analysis by reading a project’s white paper.
Readers use them to identify either credible and promising crypto projects or red flags. Potential investors also use them to monitor if projects are sticking to their primary plans and objectives. White papers can serve as an effective tool to provide transparency by presenting all the elements in a concise manner.
A crypto white paper is typically created to introduce a project and clarify its practical implications to potential users and investors. Such a document usually contains a detailed description of which ways a crypto product can be used, and a breakdown of the overall structure.
Crypto white papers are usually based on a technical description of the proposed solution. It might contain pieces of information about which mechanism it utilises, a product release timeline, and other technical components as well as visual elements.
For example, some white papers are mainly technical; a technical white paper, as the name implies, deals with technical aspects and issues, along with presenting diagrams, screenshots, infographics, and charts.
When a crypto project team aims to issue digital tokens, a white paper also contains elements such as the token sale technique, token distribution, safety measurements, times of exchange listing, discounts and other elements that align with this particular topic.
It is also important to include a few words about the project team. The readers want to know why the team behind the project is qualified to work on the project in question. There is an old saying in the business sphere that people buy you, and not your products.
This saying aligns with the crypto space. A lot of investors feel more confident to invest when they are convinced that the team is credible to deliver the project and that the project managers understand the relevant market well.
Most people search for a white paper template, but this is unnecessary. White paper templates serve as guidelines, but a white paper should reflect all the points of a certain crypto product.
A good white paper needs to be customised to meet the specific needs of a crypto project and provide all the details the target audience needs to decide whether to invest. In other words, a white paper needs to reflect your business.
However, it doesn't hurt to look at examples of successful crypto white papers. For example, when delving into all the specifics of Initial Coin Offering (ICO) and creating an ICO white paper, you can educate yourself by looking at templates from previous successful ICO projects.
To learn more about ICO, we suggest reading this article: 'ICOs & early-stage investment'.
The Bitcoin white paper, published in 2008 by an anonymous person or group known as Satoshi Nakamoto, goes by the name ‘A peer-to-peer electronic cash system’.
The name of the white paper, along with the entire document, lays down how users could use this cryptocurrency as a more efficient form of money in contrast to the traditional monetary model.
The document provides a technical description of how the Bitcoin network enables users to send the cryptocurrency on a peer-to-peer basis without the meddling of any intermediaries, and how the system is protected from attacks and censorship.
The Ethereum white paper was published in 2014 by Vitalik Buterin. The launch of the white paper was proposed by Vitalik a year before in a blog post about Ethereum as the smart contract and decentralised application platform which presented the idea of a Turing-complete blockchain.
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VisitEthereum’s white paper is based on explaining how it differs from Bitcoin, specifically in terms of main purposes. Vitalik presented Ethereum as a platform that would allow developers to create and deploy all kinds of decentralised applications (Dapps).
The white paper is also an in-depth document explaining all the technological solutions that made Ethereum thrive, such as the Ethereum Virtual Machine and smart contracts technology.
As mentioned above in the article, many people look for a white paper template. However, you should think of templates as guidelines only. While writing your ICO white paper, you must focus on how to attract investors to your ICO project.
While reading successful ICO white papers is a good start, you are entering a highly competitive market and your white paper needs to be tailored to your business needs and expectations.
Before you decide to write a white paper, there are a few prior steps that should be taken. Let’s explain them briefly.
Before you even start writing a white paper, you need to identify who you expect to read it. Decide whom you are targeting with your document, whether an ordinary user, a professional investor, a business executive, or several categories, and create a profile of them.
This step is about defining your target audience for your crypto project. Getting to know your target audience helps in matching your technological solution with their needs and explaining terms and concepts at their level of understanding.
For example, if you target tech professionals, using industry-specific terms is beneficial, but if you direct your white paper to ordinary people, you should think of customising the document for them to understand.
Some crypto projects are mainly oriented towards Business-to-Business (B2B) solutions, so their target audience comes down to companies.
However, whether your white paper targets developers or companies, it is a good option to still write it in a way a natural person could understand. Many crypto regulations contain the necessity to write a white paper in clear and understandable language as well.
The general purpose of a white paper is to justify a particular concept and provide a good solution for a certain problem. In light of commercial purposes, it should have the potential to influence the decision-making processes of the target audience.
However, a white paper needs to outline a clear goal, or better to say – a goal that is specific, relevant, and achievable.
Let’s take a look at some typical objectives incorporated into crypto white papers that the usual crypto project expects to achieve.
A big portion of crypto projects aim to sell tokens to raise funds as one of its main objectives. If your project falls into this category, you should highlight it because the target audience needs to know where to put their funds.
The objective needs to be specific and time-sensitive; in other words, don’t forget to mention how much you aim to raise and by what time.
If your main goal is to sell a product or service and generate leads at all stages of the sales funnel, you should describe it to your target audience. In such documents, you are mostly going to explain the solution to the problem your target readers are experiencing as well as the benefits of the product you are selling or the services you are providing.
Since you want to demonstrate how you could remove your audience’s pain points, such white papers come along with a subjective tone. Keep in mind that white papers are not promotional documents and that you should retain an objective narrative.
As their initial meaning suggests, many white papers are created to educate their target audience. Many documents that fall into this category are designed to announce the existence of a particular project.
For example, the Bitcoin white paper was written for this purpose as Satoshi Nakamoto created it to raise awareness about a new system that could replace the traditional centralised infrastructure.
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VisitNow that you have established your target audience and main objective, you are probably wondering who should write the white paper. The general recommendation is that the project owner or project team write the first draft.
The team that launched the technological innovation and created a solution to a particular problem should be the one to describe it. After the core team finishes the first draft, most of them turn to industry experts or professional writers to make it more appealing and understandable.
Keep in mind that crypto regulations deal with the content of a white paper as well. To obtain legal compliance in your jurisdiction and the global market, it is always a good idea to consult a legal professional as well.
The founding team often is too busy with other business aspects so they tend to outsource the white paper writing from scratch to the marketing department or expert writers.
While this isn’t an obstacle to producing a successful white paper, it is a good idea to monitor the writing by the people who created the solution or product, especially when it comes to technical aspects.
Before you start to write a white paper, it would be a good idea to think of the structure or format. A clear structure highlights all the main points in the right sections and makes it easier for people to read and understand the document.
White papers generally take on a problem-solution structure. The main sections typically include an introduction, an executive summary, a problem statement section, a proposed solution part, and a conclusion.
Within these main sections, most authors include subsections that describe the used technology, and criteria that must be met or provide certain recommendations.
If you have completed all of the above-mentioned steps, you are ready to start to write a white paper for your crypto project. Further in the text we have prepared a general structure to follow; keep in mind that each project is unique and should be tailored to the specific needs of your business.
The introduction may seem as a trivial part, but it is important. A concise introduction sets the context and tone for the whole project as well as captures the attention of the target audience.
Generally, an introduction should provide short answers to questions related to problems the project tries to solve, relevance, and proposed solution.
It should be informative and engaging, along with setting out a thesis statement that sums up the main argument and value proposition.
Think of the introduction as the gateway to your project’s journey. The target readers should be able to comprehend the topic and look forward to reading more about it.
Whether you refer to it as an executive summary, abstract or overview, it is a common part of most white papers. The term abstract is typically linked to academic papers, and the term overview is less formal.
However, the term you use shall indicate whether your white paper is very technical or less technical and who presents your target audience.
The executive summary explains the essence of your project and provides a snapshot of your vision.
Keep it short but articulate key objectives your project aims to achieve. Executive summaries assume the role of teasers that spark curiosity for target readers and set the stage for in-depth explanation.
The problem statement should be specific, factual, and evidence-based. You should use data, statistics, examples, and references to support your claims.
After you have introduced your project, main objectives and mission, you can delve into the heart of the matter and present the problem statement. You can start by describing your relevant market such as the cryptocurrency market and highlight its current limitations and challenges.
Don’t forget to analyse the market dynamics and trends that shape the crypto ecosystem. Use a forward-looking perspective to demonstrate your knowledge of the crypto industry and position your project as a positive response to emerging trends.
Whether you decide to point out security matters, scalability issues or barriers to entry, this part of a white paper lays down the context of your crypto project.
Therefore, you have to define the problem, elaborate on it, and address why it matters. Demonstrate an in-depth understanding of the problem in question and its consequences. You can also add that existing solutions may be insufficient or inadequate.
This section should provide answers to the questions of the scope of the problem; affected parties; roots and consequences of the problem; current limitations and solutions that might be inadequate; along with mentioning how your crypto project differs from existing solutions.
You could also humanise current limitations by diving into the experiences of users within the crypto space. For example, you can present real-world pain points that affect individual users, businesses or developers. By doing so, you can create a specific connection with your target audience.
This part of a white paper is not only about elaborating the problem, but also sparking a sense of urgency and positioning your technical solution as the incentive for positive change.
Now that you have defined a problem, you need to solve it. The proposed solution section of your crypto white paper is the part where you unveil all the features of your innovative solution to the challenges you have identified in the previous section.
Similar to other parts of the white paper, the solution overview should be concise, clear, and compelling. In this part, you can use charts, diagrams, or other visual elements to present your innovation and make it easier to understand.
Start this section with an overview of your project, highlighting your key goals and vision. Provide a deep explanation of the functionalities that define your solution, break down each component, and illustrate how it can be used to resolve identified challenges and limitations of the relevant market.
In this section you can utilise a unique selling proposition; in simple terms, explain how your project is different from existing solutions and highlight all key features that make your crypto project more innovative and adequate for the crypto market.
Don’t forget to mention potential risks associated with your proposed solution and provide a detailed risk mitigation system. Whether these risks are linked to technological vulnerabilities, market dynamics, or regulatory uncertainty, you should take on a proactive approach to risk management and demonstrate responsibility.
Whether your white paper is very technical or less technical, in this part you are going to talk specifically about technological solutions your project utilises.
You can start by explaining the underlying architecture, protocols, algorithms, consensus methods, and all other technical mechanisms that power your proposed solution. Elaborate on the security measures, interoperability aspects, and scalability features that are part of your crypto project.
The technology description should answer the questions linked to technical specifications and requirements; potential trade-offs; and how your proposed solution achieves security, scalability, or interoperability.
This section should be written accurately; you can add mathematical formulas, code snippets, or equations to present your technical reasoning.
In the tokenomics section, you should explain the role, function, and distribution of your project’s native token. It should be clear and transparent; you can add tables, charts, or graphs to present your token’s economic status, metrics and dynamics.
In this section of your crypto white paper, you need to reveal the economic principles governing the native token. This part is not about technical aspects but about the correlation between supply, demand and utility.
To make this part concise and consistent, first introduce the key details of the native token such as name, symbol and classification. Clearly state what is the token’s purpose within the crypto ecosystem.
Lay down the total supply of tokens and your distribution plan. Transparently write the allocation among stakeholders, the project team, investors, and the crypto community. This part builds trust between the crypto project and the community.
Further, elaborate on how native tokens are allocated within the ecosystem and highlight the percentage that goes to the project team, investors, advisors and the community.
It is important to articulate to your target readers how the native token will be used within the crypto space. Explain its functions properly and lay down incentives for token holders. Your readers need to understand how the token can create value for them and which benefits come with ownership.
Since the crypto space is based on decentralisation and community governance, explain your governance mechanisms and how token holders can participate in decision-making processes. Transparency about governance issues establishes trust between the project and the crypto community.
The concept of decentralised autonomous organisations (DAOs) is the brainchild of crypto space. To find out more about making decisions without putting someone in charge, check out this article: 'What's a DAO?'.
If there are any burning mechanisms, discuss them, along with adding details about tokens being permanently removed from circulation. Burning mechanisms are typically used to manage inflation and increase scarcity.
Most importantly, this section needs to offer a clear understanding of the economic principles of your tokenomics. Keep in mind that the credibility of any crypto project is based on transparency and decentralisation.
The roadmap section is about outlining your project’s development plans and milestones. It is a smart move to lay down a timeline of past, present and future activities as well as short-term and long-term goals.
This part of a white paper provides potential investors and users with a concise understanding of your objectives and planned progression.
Start this section by highlighting the main development milestones your project aims to achieve; including phases such as development, testing, and deployment, along with linking milestones to tangible achievements.
Don’t forget to add a timeline for each phase of development. Whether you present it in months or quarters, it is wise to clearly state when each milestone is expected to be reached. Your timeline should be transparent and realistic.
If you have any partnerships or collaborations with other projects or industry experts that add value to your project, mention them as well. Strategic partnerships can enhance a project’s credibility.
Additionally, if it is possible, lay down the dates for planned token sales, and the anticipated date for the launch of your platform. Communicate the significance of these dates to your target readers.
To demonstrate responsibility, you can also provide contingency plans; these are strategies for dealing with unexpected delays or other types of challenges that reassure your target audience, and potential investors as well as demonstrate that you are well prepared for uncertainties.
Don’t forget that this should be a detailed and visual guide that shows off the development of your project. In this section you instill confidence in investors and users and demonstrate the legitimacy of your crypto venture.
We have already mentioned the importance of transparently presenting the core team to readers. In this section, you need to introduce yourself and your team members and provide information about your background, experience, expertise and role in the entire project.
This section should sound professional and trustworthy. Add photos, biographies, or relevant links to make a connection with your target readers. Highlight your credentials and achievements to demonstrate competence.
A legal disclaimer is always a good idea, especially if you are seeking funding for your project. A legal disclaimer should advise investors on mutual obligations and responsibilities.
The legal disclaimer part is used to safeguard you from legal disputes and demonstrates your willingness to comply with relevant legislation.
This section, usually referred to as the legal or compliance section, should address the current regulatory landscape surrounding your project’s solution. Provide an overview of existing regulations that apply to your solution, and clearly define the legal structure of your project.
Add an explanation of measures you intend to use to ensure compliance such as reviews, collaboration with legal professionals as well as implementing AML and KYC processes.
Acknowledge possible risks linked to non-compliance, address how your project aims to handle data protection and privacy issues as well as smart contract audits.
You are almost done; within the conclusion section, you need to sum up your main points and state again your value proposition.
Additionally, you can invite your readers to join your project’s community, follow your social media accounts, download your app as well as participate in your project’s token sale.
The conclusion needs to provide information about the main elements of the white paper, and why should readers support the project.
Keep it short, but make it compelling and impactful. It is recommended to make it sound confident and convey your message in a manner that engages readers in supporting your future endeavours.