Home / Technology / A Brief History of Cryptocurrency and Blockchain Whitepapers A Brief History of Cryptocurrency and Blockchain Whitepapers Google +
It would be foolish to undermine the role of white papers in the cryptocurrency and block-chain ecosystem, as these industries – which will be worth billions in the coming years – were evoked from a nine-page document compiled by Satoshi Nakamoto, Bitcoin mysterious creators (or the creators).
Launched in 2009, the Nakamoto White Paper set the scene for an innovative and decentralized peer-to-peer payment network, the underlying blockchain technology, and over 1 ,600 old coins.
In the cryptocurrency and the relatively short history of blockchain, whitepapers have been considered an effective marketing tool. They explain the viability of a project, offer potential customers a unique insight into a product, try to influence the decisions made by the reader, and help to engage with potential investors prior to an initial coin offering (ICO).
At the very beginning, blockchains such as those from Bitcoin or Ethereum were public, so it made sense to make the information about them public in a whitepaper.
With the advent of private blockchains such as Hyperledger, it may be less necessary to publish a White Paper.
White papers have also played a key role in the due diligence process, helping investors determine whether a project is legitimate or whether the presence of recurring red flags (such as plagiarism or lack of sources) indicates something out of the ordinary.
“A comprehensive written explanation of what a project is trying to accomplish – including an explanation of why a token is required in contrast to traditional use of infrastructure – will almost always be the first port of call for anyone seriously considering an in-depth review of a project and its merits, “said Preston Byrne, Partner at Byrne & Storm, PC
The cryptocurrency and blockchain industry is equivalent to standard pitch decks and has therefore played an important role in this very young market to varying degrees.
The Role of w Hite Papers in ICOs
Not all crypto currencies have White Papers – many early coins like Litecoin were introduced with a simple project description in the Bitcointalk forum to get the early support of miners – but these documents have been given priority in recent years The influence of ICO activity.
ICOs became more popular in 2017 as the price of Bitcoin rose. In May of that year, the Brave web browser collected about $ 35 million in less than 30 seconds, and in September, Kik, a messaging app developer, raised nearly $ 100 million.
In early October, ICO sales impacted on year-over-year growth of $ 2.
3 billion, more than ten times the amount sold in 2016.
As of November, there were about 50 offers per month, and by the end of the year, ICOs had taken up about 40 times as much capital as you had in 2016 – though they still accounted for less than two percent of initial public offerings (IPOs). IPO).
Today activity in connection with ICO has decreased. According to the Cryptocurrency ranking website CoinGecko’s Cryptocurrency Report 2018, the number of ICOs that were able to reach their investment hardcap cap fell from 53% in January 2018 to 10% in December of the same year become more difficult to collect money through ICOs. Many teams are therefore looking for donations through Securities Token Offerings (STOs), although this has not been legalized and the exchange of securities markets is still lacking.
Regardless, STO’s offer is required by law to provide investors with a prospectus that has changed the role of whitepapers and made them somewhat unnecessary.
“In a white paper, the community can be largely a veterinarian giving an idea and vision in detail.
During the ICO boom, the White Paper largely serves as an investor prospectus / pitch deck to raise funds to the public.
It differed from a high-tech document to a business plan that disguised itself as white paper, “said CoinGecko Co-Founder Bobby Ong to Hard Fork, adding:
” Because many of these ICOs do not have a working product It is hard to determine which ICO projects are worth supporting. For many investors, the quality of the vision and writing of the whitepapers is an indicator of the quality of the team behind the project and has become an investment indicator. Different from the original
This is not unusual for companies, but they may be spinning throughout their lifetime, but for cryptocurrency and blockchain companies, deviating from the original whitepaper on many fronts can be problematic.
Lack of regulation in space means that many ICOs have no track record As a reference point and as such, any unexpected step in a company can make investors feel wary.
Kevin Hobbs, CEO of Vanbex, believes that white papers are a double-edged sword. They are important for attracting investors, but on the other hand they can “harm the ecosystem, as they are usually not followed exactly.”
“This often leads to disappointment and lack of confidence among cryptocurrency investors,” Hobbs added. However, divergence does not always indicate unfavorable intentions – many projects begin to promise anything and everything, but it becomes apparent that their vision and mission were too great and therefore impossible to achieve.
In other cases, companies have to deviate from their white paper to correct misconceptions or hypotheses when they make product or market fit, and in the worst case, companies abandon their original intentions due to poor financial management.
“Most ICO companies raised their funds in ether, and many did not convert their investment stakes into cash or stable money When the price of Ethereum fell almost 90% from its peak, many of these projects saw a significant decline in funding. They do not have enough money to deliver on their White Paper vision, “Hobbs added.
” Identifying with their White Paper has limited the companies themselves, “said Blockrules technologist David Williams.” Successful companies are much more than just a technology, what makes a business successful is not the theory behind its technology, but rather the way it implements its new idea. ” The Future of Whitepapers
It could be White’s circumventing papers and focusing instead on building robust business plans.
If anything, this shift signals the maturity of the current market, but it raises an important question about the future role of these documents.
“The whitepaper is here to stay The Bitcoin whitepaper b Describes the technical vision of Bitcoin, and solid projects are still writing white papers to describe their visions. During the ICO boom 2017-2018, some projects have changed the whitepaper to serve more like a business pitch deck. Also, the sheer number of ICOs that came aboard during the bull run has a very different quality, “said Ong.
Tomer Sofinzon, Founder and Chief Business Development Officer of Pillar Project notes that this is White Papers are They were a crucial component of an open source system such as Blockchain and Cryptocurrency.
“They also became the main tool for cheaters, scammers and tourists who can easily raise money without real responsibility and accountability to their counterparts by making false promises say NO to the connection to reality. ”
Technically advanced projects are widely used in the industry, and here white papers prove to be extremely useful as they help to give the public the purpose of a project, but in fact they are this technical complexity and the lack of understanding of the bourgeois population can contribute to promoting illegal projects.
The question is not whether white papers will continue to play a crucial role in the EU industry, but whether the maturity of the latter will pave the way for professionally drafted proposals that are truly legitimate commitments.
As Ong rightly points out, the future of whitepapers depends on the future of the ICO and the STO market. If the former wins, we will probably see white populations in outer space. So, stay tuned. Published February 21, 2019 – 15:11 UTC.
