What are Whitepapers & Bluepapers and Why Should You Read Them Before Investing in Any ICO or Coin.
Preface
Cryptocurrency has changed our lives for the good. Since the inception of bitcoin, a lot of cryptocurrencies are now making their way into the market and from there, into our lives.
As per Coinmarketcap, there are 1588 coins currently present in market. Everyday, there is a new ICO (Initial Coin Offering) somewhere on earth and it is all accumulating to the blockchain technology and crypto world.
With so many ICOs and so many coins already present in the market, how can you make an educated decision whether to invest in a particular coin or not?
Most of the people tend to follow giant crypto analysts and buy or sell coins as per their recommendations. Because while these theoretical analysis might pan out for some, they don’t always do.
So How to Make An Informed Decision About Investing in a Cryptocurrency?
Its fairly simple (sort of). Read whitepaper of that particular crypto, analyze if it is worth it and then decide.
What is a Whitepaper?
Whitepaper is a piece of formal document that provides information on the related cryptocurrency. It presents the philosophy behind the project (coin / blockchain, in this case) to let the readers know everything about the program / project. There is no certain standard pattern to write a whitepaper. It is basically how one would want to share the project details with rest of the world.
So if you were to launch a coin, consider whitepaper as your thesis. It is upto you how well and in depth you want to describe and discuss the project at hand. The more and clear information it contains, the better impact it will make on audience.
Whitepaper term has been in use way before the advent of cryptocurrency and used to include all the knowledge about the product / project under considerstion. However, in this article i will strictly keep the discussion pertaining to cryptocurrency only.
Whitepaper has seen its fair share of evolution over the years as they have become more nontechnical documents in nature owing the fact that common investor may not be accustomed to technicalities and the science behind a project.
Information in Whitepaper
As I have already mentioned that it is upto the issuing authority how do they want to write their blockchain’s / coin’s whitepaper. But still, You will find a set of standard information common across all whitepapers. Some of these information are listed below :-
- General Information about the project
- Objectives of project / blockchain
- Roadmap / Timelines to reach milestones
- Token distribution
- Marketing
- Adoption of project by common masses etc etc...
Making an Informed Decision on Investment by Reading Whitepaper
Unfortunately, most of people today do not even know what they are getting into. They hear the word “money” or “profit” and they jump right in without even knowing about the coin or related blockchain technology.
Whitepaper is an essential and integral part of any ICO and the issuing body is supposed to release whitepaper before launching of a coin / blockchain.
These documents help investors in deciding if the project is worth their investment or not. Surely, it all comes down to guesses but an educated guess nonetheless, which pays off way more than a wild guess.
Speaking of wild guesses, i am ready to take one that most people here have not read whitepaper of steem blockchain and have rushed to this platform after searching on google “how to make money online by writing articles”.
It is always recommended to read a whitepaper 3-4 times before investing your hard earned money in any cryptocurrency.
Beware of Phoney Whitepapers
Some of crappy ICOs today have resorted to cheap tactics like mentioning how their coin, which is of 1$ today will be of 50$ worth in 3-5 years. You are hereby warned that mass adaptation of a blockchain is based on the technology and system efficiency behind it rather than advertisements, fake analysis and empty promises of massive profits.
Generally, I would avoid investing in any coin that does not provide me with concrete information about the blockchain, objectives and timelines. And i would urge the worthy readers to do the same.
What is a Bluepaper?
Bluepaper is an offshoot of whitepaper. As I have mentioned before, whitepaper has become more non-technical in nature to provide information that can be easily digestible to all kinds of investors.
However, the issuing body might also be interested in dishing out technical details of a project for those who are interested and/or if the project demands so.
So these technical details / specs of a project / coin / blockchain is written on seperate document that is called “Bluepaper”.
Bluepaper is relatively a newer concept in the world and not at all mandatory to write one. Though, it certainly helps in boosting visibility of the coin. Many issuing authorities merge both (technical and non-technical) information in whitepaper alone.
Advantages of Reading Bluepaper
Reading the technical aspect of a coin / blockchain is a great way to find out how much the system is complete in its nature. So readers will be able to point out the system flaws or appreciate its completeness and then in turn decide about their investment.
Why do I Find Some Other Colourpapers of Certain Cryptos?
You might ask this question if you had any chance of reading Ethereum’s Yellowpaper and you might wonder that what is this?
The truth is that there are other coloured papers too like mauve, green or even polkadot. The colours are assigned to documents based on the type of information they contain. For instance mauve and polkadot papers are mostly about optimization of system and ethereum’s yellowpaper is the mathematical description of Ethereum Virtual Machine (EVM).
Nonetheless these other coloured papers are not as much as important as whitepapers and / or bluepapers are as far as investment is concerned.
Conclusion
It is of paramount importance that you should read about the project / coin before investing your hard earned money in them. Whitepapers are most useful when it comes to getting information about a particular coin. Reader descretion is always advised as every whitepaper will declare their respective coins as the most adaptable, the most demanding and the most promising. It is you who have to decide whether to put your money and trust in that particular coin or not.
Case in point, i would urge everyone to read Steem whitepaper and bluepaper to get a better understanding of the blockchain. Here are the links:-
Thank you very much..
It is requested to kindly upvote and resteem so that more people can benefit from this information and if you’d like to correct me on something or add anything for that matter, you are more than welcome to post them in comments section
Thumbnail image is designed on canva tool, rest of the images are taken from pixabay
Really Really good article!!
I just wish more people would follow this type of advice before investing in ICOs and crypto.
Seen far too many people invest without knowing the absolute basics covered in this great article.
Good Luck on your Steemit journey :-)
Wawoo what a informative post once again ;) Hats off to you :) I have been following cryptos from last year and joined this steemit in January. I have never read any white or blue paper for any currency, because you are well aware that investment in any currency from Pakistan is very very difficult. I assume you are from Pakistan and can help minnow like me by making one post as how to buy or stock crypto from Pakistan. This is my small request. I know you are busy but if you can share link with me as well or if you have already written somewhere about it , i will be thankful. Many people are doing crypto business in Pakistan but they do not share their way of exchange etc.
2nd Question: Do you follow any crypto analyst ? i would like to read more about that and will wait for your suggestion :) thank you for your time. Upvoted and resteemed :)
Hi @adnanibrahim. Crypto scene is raw in Pakistan and it is very hard to begin. I know that. There is some help that I can do here.
For buying any crypto from exchanges, you'll first have to buy Bitcoin. Buying/selling Bitcoin is the only problem. Buying and selling altcoins on the exchanges is not an issue at all. To buy Bitcoin, I recommend contacting my trusted exchanger through @steempkrex (link to intro given below).
To buy any altcoin, you can use the process which I laid out for buying Steem. (Buy initial Bitcoin from @rizcryptotrader of Steem/Pkr Exchange.)
To sell altcoins to Bitcoin and Bitcoin to Pkr, you can use this guide. You can reverse the process to buy any coin. (Sell your Bitcoin to @rizcryptotrader of Steem/Pkr Exchange for good rates.)
Introduction to Steem/Pkr Exchange is given in this post. I recommend using it for all your Bitcoin and Steem related transactions.
Questions can be asked under this thread. I hope it helps.
thank you so much for your detailed reply, i am studying all the post links you have given above and will sure use it in future :) thank you so much for representing Pakistan and thinking about minnows and people have not enough information. If i need any further help, i will ask :) I already joined the channel as well.
Well there you go.. ask and ye shall receive :p
If there is anything else, ilyas will help you out.. cheers
thank you for your help and introducing to him :) highly appreciate your support :)
First of all, thank you very much for the kind words.
Now moving on to answer your first question:-
There is already a post on how to buy cryptos from pakistan written by @ilyastarar but that was some time ago and i will need to dig a lot to retrieve that post. He is a rather more experienced steemian than I am.
What you can do for now is that there is a service named “Steempkr exchange” operated on steemit which is run by @ilyastarar.
You can buy both SBD and /or steem by submitting fiat in PKR using this service. From here, you can take those SBDs or Steem to any exchange (i would advise to use bittrex) and then you can buy any crypto you want to.. and once you want to exchange any crypt for fiat, use the same chain in reverse.
I agree that buying crypto from pakistan is not at all easy and an online exchange named “urdubit.com” charges insane amount of fees. So i guess your best bet is to use SteemPKR Exchange.
And as for your other question :- , i don’t follow any crypto analyst. I tend to create my own analysis after observing the market. However, there is one analyst right here on steemit named @hilarski who provides valuable information and i fairly listen to his advices.
If you need any further help, you can always contact me. Anything for my country fellows.. ^_^
Loved your detailed reply :) Thank you so much.
I search on his profile and able to find this post, are you talking about this post ? https://steemit.com/steempkrexchange/@ilyastarar/steem-pkr-exchange-how-is-steem-sbd-to-pkr-conversion-rate-calculated-plus-some-important-instructions
If Yes, for sure i will use his services, seems very honest person :) thank for introduction :)
Yes, this is a big part of ICO/coin investment, thanks for posting this! When I've finished reading the whitepaper on a project I also take a minute to ask myself a few simple questions.
I'm sure there are other ideas that are also important, but if I don't find favorable answers to those 5 questions after studying the whitepaper I won't invest.
Thats a very good set of questions that one MUST ask themselves before investing.. you are already moving in the right direction... kudos and thank you for insight. I would suggest that you should upvote your own comment so that it bumps to the top and many users reading the comments will be able to benefit from this knowledge.. well done..
Well if you invest you need to read, read and again read.
I spend few days researching before i invest in something
Good advice.. always study before investing
Good what a informative post once again.
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Once crypto dominate the world then every problem will be solved because corruption will shutdown forever...
What does that have the do with with whitepaper and bluepaper ?
Congratulations! This post has been upvoted from the communal account, @minnowsupport, by jbn from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, someguy123, neoxian, followbtcnews, and netuoso. The goal is to help Steemit grow by supporting Minnows. Please find us at the Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.
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Whitepapers are used as a tool for evaluation by potential investors. Once you feel confident in your evaluations, it is imperative to understand initial coin offerings aka ICOs and understand the difference between capped and uncapped ICOs.
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