How to Analyze Crypto White Papers as a Beginner?
Crypto white papers are an important source for research. They are created by the team behind the project to describe its mission and technological solutions. The whole crypto industry started with the famous Bitcoin whitepaper published on October 31, 2008, by the still-unknown Satoshi Nakamoto.
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In the 9-page-long document titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” the author wrote down why there’s a need for digital currency as an alternative to bank-issued money, and how the asset would operate technologically. The Bitcoin Network itself was launched on January 3, 2009, around 2 months after the White Paper’s release. Generally, white papers come before the project’s release to share the concept, after which the team engages in processes like development, testing, and project promotion.
If you open the Bitcoin white paper, you’ll see that Satoshi Nakamoto doesn’t mention anywhere that the document is a white paper. It is categorized as such due to its style and content, which provide a detailed explanation of the Bitcoin concept. Outside crypto, in business, government, and other technical fields, academic documents that delve into research, product descriptions, expert opinions, and other subjects also fall into the category of white papers.
Different Types of Crypto White Papers
White papers differ in their length, style, and complexity. They can range from a single page to over 100 pages long. While some white papers include graphs and images, others are text-only. The format often depends on the type of project and how they choose to present themselves. Generally, projects with easily understandable concepts, such as crypto games and memecoins, use different colors, shifts, and images. In contrast, more complex projects tend to look more standard.
How Pepe and Solana whitepapers look. Sources: coinprika.com, solana.com
Among the common types of crypto white papers are yellow papers and beige papers. Yellow papers are mainly created for development teams and engineers, and they are heavily focused on the technological aspect of a project, explaining research and technology. A popular example of yellow paper is Ethereum Yellow Paper, written by Ethereum co-founder Gavin Wood and published in 2014. The document has 42 pages, providing a detailed technical specification of the Ethereum Virtual Machine (EVM) and the Ethereum protocol.
Beige papers aim to provide information about a crypto project in a simpler format and usually are rewrites of yellow papers. For example, the Ethereum Beige Paper explains what the protocol is in a less technical way. Also, there are light papers for a quicker and easier project overview, such as the Polkadot Light Paper.
What Can You Learn About a Crypto Project From Its White Paper?
White papers provide a detailed overview of a project, covering its key aspects. While there are no set standards for writing a white paper, the typical structure usually includes:
- Introduction: A narrative text about the project’s mission
- Practical information about the project’s proposed solutions: This section explains in which scenarios the product described in the paper—whether it’s a dApp, blockchain protocol, or something else—will be useful.
- Project architecture: The technical details of how transactions are processed, how the project operates overall, and what security measures are in place.
- The token economy: If a project has a native token, its whitepaper needs to include information about how the tokens are distributed, and what use cases they have among other details.
- Roadmap: White papers may include plans for the project’s future and long-term goals, sharing how the team intends to achieve the plans.
- Information about the founders: This section typically includes the background of the project’s founding members. However, in some projects, such as Bitcoin, the founders remain anonymous and may use pseudonyms to connect with the audience.
- Final part: Everything from the summary, disclaimers, and references can find a place here.
In the image below you can see how a white paper may be structured with an example of Decentraland — a blockchain-based virtual world where users can create their digital environments. The document has 5 main sections: Introduction, Architecture, Economy, Challenges, and Summary.
Decentraland white paper’s table of contents. Source: decentraland.com
How to Find the White Paper of a Crypto Project?
You can find a crypto white paper on its official website, in community groups, and on platforms like Whitepaper.io, GitHub, and Medium. Many cryptocurrency exchanges also provide links to white papers for the coins they list.
The tricky part here is to make sure you've found the latest version of the document, as projects make upgrades from time to time, presenting new features, improving user experience, and more. In general, you'll find the latest updates on the project's official website and by following the news. If there’s any doubt, reaching out to the project's official community channels can provide guidance on locating the most current version.
It's important to verify the authenticity of a white paper, especially when found through general internet searches. Checking official sources can help you avoid reading something outdated or fake.
How to Analyze a Crypto White Paper?
Sometimes, crypto white papers can be lengthy and complex, especially for non-technical people. However, skipping them in your research might mean missing out on crucial information that could help you decide whether to use a dApp or invest in a cryptocurrency. The perfect option would be to read or scan the document from start to finish, paying attention to parts like the introduction, token use cases, and technology. When meeting unfamiliar concepts, you can research them separately or ask your questions in community forums.
Pay attention to what the project emphasizes in the white paper. Is it partnerships, strengths of its technology or does the content mostly consist of water, history and backlashing other projects? The more the paper focuses on its purpose, goals, and strengths, the more likely it is well-thought-out and carefully developed. Even if you don’t read the whole paper, checking out key sections can still give you useful insights. Another factor to consider is the quality of the document. A poorly written white paper with mistakes is a red flag that the project may not be legitimate.
If you’re looking for simpler white paper analysis, you can check expert feedback or use AI tools to break down the white paper.
What Other Sources to Consider When Researching a Crypto Project?
Although white papers are a key resource for understanding a crypto project, they only provide the project's perspective and mission. To get a fuller picture, consider reading objective media overviews, checking community discussions, and researching the project's history along with the latest updates and news.
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