Updated: May 3, 2019
The foundation of a blockchain application is not its code or anything technical for that matter.
It all starts with the whitepaper.
By now, you’ve most likely heard quite a bit about the whitepapers of certain ICOs - the bitcoin paper being one of them - and how they were instrumental in launching the biggest cryptocurrencies.
However, these blueprints demonstrate the underpinnings of far more blockchain applications than just cryptocurrency. If you hope to launch your own blockchain network one day, it’s essential for you to know the ins and outs of writing a whitepaper.
Defining the Whitepaper
For those of you with business backgrounds, whitepapers aren’t new to you. For the technical folks out there, you know that the whitepaper is a blockchain must-have, but you might not be 100% sure what goes in it.
Let’s bridge the gap.
As a recap, a whitepaper is an authoritative report or guide that gives information or proposals on an issue or topic. In the context of a blockchain application, a whitepaper would offer a solution to a problem (proposal) and then describe how the platform would work to achieve its purpose (information). That’s why we refer to it as a blueprint and why it precedes the code.
Of course, the whitepaper isn’t the end-all, be-all component of a blockchain application. Think of the whitepaper like an architectural blueprint for a building. The blueprint provides details for how the building will be constructed. However, it’s not a building yet.
For it to become one, there needs to be a construction crew who can build the structure, brick by brick, floor by floor. Likewise, the whitepaper merely details the purpose and functionality of the blockchain application. It still requires a multi-faceted team of creatively, technically and strategically-inclined people to build a functional blockchain product.
It’s important to remember this fact because many investors have unfortunately succumbed to ICO scams that lured people in simply because they had a convincing whitepaper. Therefore, it’s crucial to focus more on the development of a tangible blockchain product, as opposed to just buying into the words written in a whitepaper.
What the Whitepaper Must Accomplish
This document is not meant to read as a literary work of art - it’s no prize-winning novel or acclaimed poetry anthology. Ultimately, it should serve as a means to create credible awareness of the solution being proposed. When investors or collaborators read the whitepaper, they should get a sense for what the compelling market need and business value of the solution are, as well as what the product can do to address this. It should help them decide whether they want to join the project. With that said, it should contain the following characteristics.
Winning With a Whitepaper
It Must Be Credible and Authoritative - If you believe in your solution, that conviction has to come across in the whitepaper. That means you need present objectives, goals, statistics and processes which clearly demonstrate how your application can resolve a pressing issue. A genuine critical assessment of market needs and the business value it provides must be presented. All too often projects have been led by technology alone and while technology is important, the project must be solving a need and providing value to users.
It Must Be All-Encompassing - A well-written whitepaper must educate, market, inform and persuade investors and collaborators. We’ll identify how to accomplish this shortly.
It Must Be Formal - A whitepaper is very much a technical document and should read like an academic journal but one that demonstrates business application. Yes, it’s contrarian to the more simplified writing styles championed by many publications these days, but you’re speaking to a narrow group of people with highly specialized knowledge. So your whitepaper needs to speak their language.
If your whitepaper meets these criteria, then it has a much higher chance of attracting investors, collaborators and other parties who may see value in your application.
Contents of the Blockchain Whitepaper
Understandably, writing a whitepaper may seem like an overwhelming task. It’s easy to think that you have to sit at your desk for weeks, months or even years, typing away until you have a “bible” sitting on your nightstand. But this isn’t the case. You and your team can prepare a whitepaper in a relatively short span of time, providing you have the right outline or direction.
Start With an Abstract
Essentially, your abstract is a summary of your blockchain application. In that summary, you will mention things such as the meaning behind its name, its main purpose (should be a solution to a major business or technical problem for which demand is demonstrated), why you’re launching the application and a snippet of how it works. Think of it as your 60-second pitch but written in one paragraph. You can add an introduction that transitions into what your platform or project does.
Identify the Compelling Drivers and Value Delivered
All too often, projects fail because they are so focused on the technology, they forget to first understand if there is a need for the solution. Understanding the market and demonstrating the challenges with the current way of doing things is an important start. Showing what the market size of this challenge is (addressable market) helps to illustrate the potential for the solution. Value delivered as a result of your solution to the market, businesses and users also needs to be discussed.