There is no such word today, which, if mentioned, would immediately plunge us into the world of blockchain projects and dashing ICO’s, like white paper. Someone immediately wrinkles his nose at its mention, and someone for sure begins to leaf through the stories written on its pages, believing in the real future. It is necessary to recognize, that not without disgust and not without hope. White paper today is the stigmata of the blockchain culture. And it is not worth to criticize my opinion right away, stigmata is not only a pain, but also a sign of God’s mercy. And what is blockchain — technology? No, this is a cult. Therefore, a phenomenon like ICO, which is in development, is leading to the fact that its conductor and the access point of information about it, like white paper, also is transforming. Accordingly, in the course of evolution, such a document is a subject to criticism, close analysis, and accordingly claims to it require an analysis of the primary reasons for dissatisfaction with its format, content and objectives. Now we will think, where did the reasons for the claims come from?

What it is? The term “white paper” arose from the British public government, when the British Cabinet in 1922 for the first time used this format of the report and coverage of the solution to the problem, proposed by the Minister for Colonial Affairs Mr. Churchill. The report got its name because of the color of the cover. At the same time developing the concept of democratization of governance, white paper were defined as instrument of democracy based on the role of representation of a firm state policy and attracting public attention to it. White paper was the way how the British government showed up its political preferences before legislation introduction. Further during the Second World War, as well as in the 50–60s of the 20th century, white paper was used in science and medicine. Later, with the advent of computers in the 80s, white paper began to penetrate into the IT industry and marketing. Since the early 1990s, the term “white paper” has been applied to documents used as marketing tools or sales in business. These white papers are a long content designed to promote the products or services of a particular company. For example, today, you can already come across the following definitions of the term for White Paper as a small motivating guide ordered by an organization as part of the whole marketing content. Of course, this definition is too narrow and overlooks a bunch of important characteristics, without which no any white paper of marketing purpose can do. A huge number of varieties of marketing white papers are divided into 3 large groups:

Backgrounder

Numbered list

Problem / solution

All of them have their own features and scope of use. In addition, white paper can resemble:

instruction

guidance

special report

Market Review

Therefore, in terms of marketing, White paper is something like a free brochure that contains information that is valuable to its targeted audience, not of an advertising nature, which stimulates buying. And in the end, in its format, White Paper occupies an intermediate position between the technical instruction and the glossy magazine, between the dry scientific monograph and the annual report, between the falseness of obsessive advertising and timid descriptions of the perspective. Today, this tool can be either:

• Government statement explaining the policy;

• Reference document for corporate clients;

• Official documentation describing the solution;

• Documentation describing a new technology or algorithm

And further, there was one more transformation of purpose. On the 31st of October, 2008, white paper for bitcoin was published under the authorship of Satoshi Nakamoto — still the anonymous creator of the first crypto currency. In this document in a strict academic style, the technology of the new monetary system, which the author named Bitcoin, was described. Therefore, from this time on, the instrument as white paper has already acquired a new meaning and significance. Further white paper began to be used as a presentation tool for the concept of blockchain projects and from 2013 it was also used in the framework of ICO projects. The ICO theme continues to attract attention; hundreds of projects around the world are trying to raise funds through this mechanism. On the market, their own rules for the design of ICO are still developing, and one of them is that the project team should submit its description in a special document called White paper. Initially, it is intended to tell about how the technology of the blockchain will work. This file usually contains a detailed description of the architecture, as well as how the users interact with the system, information about the current market situation and growth forecasts, the conditions for the release and use of tokens, and a list of team members, investors, partners and project advisors. Without a properly designed white paper, it will be difficult for a project to carry out a successful ICO: few will be ready to invest in the absence of technically clever technology descriptions, as well as previous experience of team members and the availability of descriptions of basic economic prospects. However, the definition that what is a well-written document today is like a room with a lot of doors. Therefore, what is observed on the market today is the opening of many doors, with unknown results and uncertain tasks of application of the document in modern already changed conditions. The teams are writing something, drawing something, making accents on the color and dominance of graphics, believing that the average person will have a beautiful candy wrapper. But among these philistines, many professional and institutional investors have already appeared which are simply annoyed by such empty advertising candy wrappers.

Initially, from 2013 to 2017 (the time of the so-called “pre-regulator attention”), there were certain requirements for the elements of this document. So, a good White paper should contain the following elements of sections:

The problem;

the proposed solution and product description;

description of the implementation of the token (how it interacts with the product, the economy and technical implementation);

Team;

Tokens distribution and further plans

In any case, it was desirable to highlight such issues. It is desirable, but not necessary. At the same time, it should always be remembered that so far there are no clear requirements or specific industry standards, as they are just outlining now. Today, in the framework of the ICO White Paper is read by everyone who is planning to buy a token, to gain access to or finance the development of a new product or service within the framework of blockchain for their business or home, for private or corporate use. In the ICO business, white paper readers can perform many different roles. Among them:

heads of investment companies (make decisions);

heads of financial departments (recommend purchasing in terms of costs and their payback);

IT managers and ordinary staff (recommend from a technical point of view);

marketers;

users of various blockchain platforms and marketplaces;

people who decide to buy or invest

This is already quite a broad audience. White paper readers are looking for useful information that will help them understand the purpose of the product in which they are going to invest. Usually it is important for them to find out the technical and economic details of the product or service or to comprehend what benefits this project give them. And yet, why did white paper become so popular in the framework of ICO projects. The reasons are obvious:

collect leads for sales of tokens;

influence potential investors;

provide information to the media;

post information on the site;

build trust with customers;

Follow the competitors who publish white paper

These reasons, deriving from the marketing essence of the goal of writing white paper, while often forgetting even the technical component, have brought a number of defects today, like:

Justification the project value only using marketing and promotional material

Limited access to elements of economic and investment information

The style of writing the document was mainly oriented towards the audience that was exposed to the fashion hype in crypto business and crypto investment

Increased attention was paid not to content, but to design

Domination in the content of calls to action and bonuses

The devil is in the details — in shortcomings! Very often when analyzing the ICO market, experts primarily paying attention to the quality of many White Papers. And the main view is that the quality is terrible and shocking in many aspects, where mistakes were made or the description of the project was without justification. Also, in many cases, there was a clear conflict of interest between companies that release tokens and the customer community. And the quality of information that presents such venture projects only adds fuel to the fire and causes suspicions already from regulators, since the obvious drawbacks are:

Total disregard to legal model of the forthcoming coin offering, for its incorporation, and for the ICO procedure itself

Ignoring the acceptance by the project of the guarantee obligations to potential investors. The lack of information on the project’s warranty obligations may indicate a possible vulnerability of its blockchain code and the reluctance of developers to bear responsibility for this to investors

Lack of originality of the idea of ​​the project and its implementation. Or originality is based on cloning and copying information from similar projects

Lack of expediency and justification for ICO. Projects, which in their essence are a financial investment in the operating business, do not disclose information in traditional way for business plans. Again, it is all around the design of pictures

The majority of ICO projects when drafting white paper forget about the economic model for justification of the blockchain platform. Times when the economy was pumped through marketing and community building — already in the past. Now is the time of big money, and they require an economic justification as well.

Many people constantly forget about one thing: Good White Paper cannot make a bad project successful, but at the same time a bad White Paper can completely ruin an excellent project. To the already described shortcomings, we can add the following traditional problems of modern White papers as:

1. Domination of technical content

At the beginning, ICO aimed at a crypto community that was already familiar with the underlying technology. White Papers, heavily loaded with a technical description, earned the main attention. But as the ICO market is saturating and the cryptographic world is in line, the White Papers of the projects now need to serve a wider audience of future users of tokens, many of which are not crypto followers, but investors

2. Impossibility to determine why the project needs a blockchain

It used to be that “Decentralization” was a magical mantra for a successful ICO. Now the situation is different, and attentive investors want to know why your idea or product will benefit from decentralization.

3. Importance of the team

Who you are — your experience and knowledge — is more important than most of the teams understand it and get to know the problem when it comes in implementing a project and selling tokens. ICO investors not only want to get the confidence that you will develop the promised product, but they also need to be convinced that you are able to follow the project information so that it does not flow into a similar project of competitors

4. Inability to present information

Your White Paper should be more than a series of facts. Do not forget to add who, what, when, where, why and how. These phrases and the answers to them form the essence of the project description. The ability to write down correctly and clearly thoughts and skills in order to systematize and rank information about the project for investors is an indicator of your elementary business literacy

5. Either the opposite — an abundance of unnecessary rhetoric

Many white papers are so locked up in rhetoric that they forget to actually say something. Not observing the basic rules of drafting (PM standards), neglecting the main points of business planning, and reducing the role of traditions of the investment document are leading to the fact that even the dominance of marketing and advertising elements in white paper does not solve the main tasks and objectives of this document within the ICO campaign, as:

To make the difference in your project in order to benefit it from other projects that also goes to the ICO. Even if these projects do not directly compete with yours. The thing is that the amount of money from investors is always limited, and if the investor is choosing between several projects (and in practice it happens), then your project should catch his attention with targeted information more than others, and not with the help of tinsel and promo slag

in your project in order to benefit it from other projects that also goes to the ICO. Even if these projects do not directly compete with yours. The thing is that the amount of money from investors is always limited, and if the investor is choosing between several projects (and in practice it happens), then your project should catch his attention with targeted information more than others, and not with the help of tinsel and promo slag Raise trust. A person should see the value of the idea of ​​the project, the opportunity to implement it, use and develop it. Therefore, in white paper there should not be logical inconsistencies or insane ideas that cannot be realized.

A person should see the value of the idea of ​​the project, the opportunity to implement it, use and develop it. Therefore, in white paper there should not be logical inconsistencies or insane ideas that cannot be realized. Convince investing money. Not always direct advertising and PR influence the decision making. Often a convincing analysis of the project’s prospects and trends in the current market for an investor should cause a causal case relationship with the project. If not me — then who? The main thing is that as a result of the marketing analysis it was clear that the project needed the market and would be in high demand with a high probability. However, in fact, we see an abundance of hysteria about uniqueness in a project that is not in fact

All of the above shortcomings and claims so far indicate one thing: the scam or ignorance of the initiators of projects dominates the market of venture investments in technological projects. Among the noise of this shit, it is very hard for real and talented projects and teams to break through and to attract the attention and finances of investors. Therefore, the attention of regulators is quite natural and approved.

So far today in the market, white paper is basically just a handiwork of copywriters who have nothing to do with what ICO really is and why it should be viewed from the position of the project, as regulators and serious investors already demand. The copywriters who came from the advertising business continue to destroy the sense of the document and do not understand the changed modern requirements for the document, both from a legal point of view and from an economic aspect. Therefore white paper should not be written by false copywriters, that pouring information from empty to empty, decorating the text with beautiful and cheap graphics, so the document should be compiled by a group of professionals (project management, finance, lawyers, technical personnel). If the copywriter for writing WP on freelance sites requires a fee of $ 80, then what are you expecting from him and who then is trying to use such services, as not charlatans or swindlers! Regulators are already beginning to pay attention to this problem with the quality of White Paper and in the process of establishing a number of requirements, which we will consider in the next article.

https://t.me/synergygolubyev

Sergiy Golubyev

EU structural funds, ICO projects, NGO & investment projects, project management, comprehensive support for business, expert with AgroChallenge foundation