Importance of a white paper for an ICO

Importance of a white paper for an ICO

“A white paper is an authoritative report or a guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. it is meant to help readers understand an issue, solve a problem or make a decision,” according to the Wikipedia definition.

In simpler terms a White paper is an instrument that helps business explain themselves to people. Information like what problem are they solving, how are they solve it and what is their course of action to achieve the same, is what it explains. They address the business issues, showcase products and can also outline a competitive solution.

The four major reasons can be stated as

Vision of the Project

Sharing technical knowledge

The problem

Generating Publicity

Distribution of business information

Attracting prospects

The core team and their track record

What is an ICO white paper

According to www.nasdaq.com an ICO is

“ An ICO is a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange of bitcoin and ether. It’s somewhat similar to an IPO in which investors purchase shares of a company.”

The year 2017 saw multiple ICOs across the globe and q1 of 2018 also raised millions of dollars via ICOs. Many of the last years ICOs weren’t as legit as I expected and people found great difficulty in understanding what the ICO was about.

Every legit ICO should include a white paper that explains why is the company raising the needed funds. As a token buyer, the most important basis of investing in any ICO is to understand what it does. And that can be understood only be reading the white paper. A brochure, website or infographic video will only cover the basics. These white papers indicate the genuineness of the startup. White papers can be of multiple types , as well for a single ICO. Some written to explain the economics, some written to explain the business and tech and some simply for Marketing or PR.

Some white papers also mention disclaimers about the risks involved, in investing with the startup. Such white papers increase the trust of the community in the business. These papers definitely inspire Pre-ICO sales and make the ICO a successful one.

The important points of a white paper are

Business and the vision

The purpose of the business and the problem it is solving is very important. 80% startup’s look at creating forced problems and these startup’s don’t generally have a future as they aren’t solving anything important.

It is important that the white paper emphasize the passion to solve a real problem and has a clear 5–10 year vision in solving the problem. The uniqueness of the solution will be the USP that will make or break the success.

Team behind the show

Investors always prefer to trust those companies whose team they can trust. A background check on the core team that shows they have a great track record and a good reputation is very important.

Some ICOs skip this part with just the names or small bios. It is advised that entire professional records and growth of the team members increases the trust in the project.

Quality and tonality of the paper

Excitement and FOMO ( Fear of missing out) are the emotions that are needed to get the right investment. If the tone of the paper doesn’t signify these feelings effectively and focuses on the greed of individuals and simply pushes the return on investment from the tokens, it doesn’t leave the mark behind. And this hugely affects the investments.

Legit ICOs don’t tend to play with fear, but focus on the core USP and the technological advancement they are working for.

Any company could get a professionally written white paper by a professional even if the ICO isn’t legit. A white paper doesn’t make or break the deal, but is a very important instrument in the communication the company wants to share with its investors. It shows the intentions and increases the trust.

If you want your ICO to be successful make the white paper with the same passion that you are working to solve the problem. A hastily written or poorly drafted white paper won’t get your ICO anywhere.

For any help in drafting one for your company, write to me at akshay@blockinventors.com for any questions or guidance.