White paper, this word often appears on news sites on crypto-currencies, but you do not understand what it refers to? In this article, we’ll see what it means, then look at some examples of famous white papers.
Definition: White Paper
A white paper, is a collection of factual information about a project. Historically used in politics to describe a strategy to put in place, this term was later used in marketing. The role of the marketing white paper is to convince the interest of a project. In the world of crypto-currencies, it is generally published by the initiator of a project between the moment when the project is announced and the launch of the ICO (fundraising in crypto-currencies). It describes the general purpose of the project and the means used to achieve its implementation. Some white papers go deep into technical details. Others explain only the steps to take, without explaining how the team will go about it.
Famous white papers
Writing a white paper has become a tradition for every crypto currency, a new crypto project is always accompanied by its white paper. And for good reason, the first and most famous crypto currency (Bitcoin) was unveiled thanks to its white paper. The Bitcoin White Paper was written by Satoshi Nakamoto. This 8-page book is available for free at bitcoin.org, the site created by Mr. Nakamoto. It begins by describing the interest of a currency without a central authority, without a regulator or control body. He then explains how Bitcoin works, how to respond to the problems usually solved by an authority controlling the currency. It presents the functioning of the consensus Proof of Work, as well as other algorithms used. In addition to this, he anticipates future problems and describes the rules to follow in case of conflicts. For example, if two blocks are created at the same time on two different nodes, then the first to generate a block will be the one selected by the network.
You can also read the Ethereum white paper . This one is less known, a little longer, but it explains in a precise way the functioning of a unique Blockchain for different crypto-currencies.
The dangers of white papers
Attention grabbing white paper, although very common, is not a guarantee of quality. It describes the purpose of the project, but is not mandatory and is often a promise. Indeed, it is possible that during the project’s progress, some key points of the white paper will be abandoned. It is also possible that the project is completely abandoned at the end of the ICO, without refund, it is then called an exit scam.
Be careful, we will never repeat it enough, always do your own research before investing. You are never safe from a scam. Never invest more than you can afford to lose.