Crypto Whitepaper: The Surprisingly Ignored Fundamentals in the Crypto Space
Cryptocurrency in the first 13 years of existence has been the best performing asset of all time beating gold or stock and it is all thanks to the brilliant technology of blockchain. Bitcoin began its cryptocurrency journey in 2008 as a means of solution to the wreck that was caused by wall street and its speculators. Unfortunately, this kind of speculation is repeated again in the crypto space and it’s all because people are more familiar with concepts such as FUD, Airdrops, and Market Cap instead of understanding a Whitepaper. So, what is a Whitepaper? And why is it often ignored in the crypto space?
What is the function of a Whitepaper?
The term Whitepaper originated from government papers that were often color-coded to indicate distribution with white designated for public access. It basically is an authoritative report or guide that often addresses issues and how the entity is planning to solve them using their ideas or approaches.
Over the years, whitepapers have traditionally been used in the technology sector to provide technical information to potential customers on a product and to explain, in technical terms, the importance of the product. It, therefore, performs the dual function of providing technical information while also acting as a marketing document.
Apart from information or marketing purposes, a whitepaper gives legitimacy and a professional outlook to a project. An elaborate whitepaper is encouraging, a badly drafted one is repulsive. The whitepaper, basically, is a proposal that contains who, what, when, and why an investor or regulator should trust the project or not.
While there is no legally prescribed form on what the whitepaper are required to be drafted in but they generally follow a structural path starting with a short introduction on the purpose of the whitepaper, followed by a description of the challenges or problems they are addressing, a technical description on how the concept or product actually works, ways of how the concept is solving the problem and finally conclude with a summary as to why the product/concept is the best choice for the problem.
Now some might say that the beginning of the cryptocurrency story started when a nine-page document written by Satoshi Nakamoto released in 2008 entitled, “Bitcoin: A Peer-to-Peer Electronic Cash System,” introduced Bitcoin to the world. In this whitepaper, he outlined the flaws with the current financial system and a need for a new peer-to-peer electronic cash system. This whitepaper obviously sparked a lot of interest amongst the tech space to try out mining bitcoin and eventually help build a community of bitcoin enthusiasts. Obviously, the concept of a new digital financial system might sound good to tech people but it is a pretty hard concept to grasp for common people out there and the Bitcoin Whitepaper played a key role in providing the necessary information to help fuel its growth.
By the time the crypto boom came along at 2017 and prices were on the rise, the role of the whitepaper had shifted from an educational tool to a marketing tool. Its concept right now is more similar to a financial report in the stock market in providing exposure and transparency to potential buyers or investors. Obviously, it is also because the perspective towards cryptocurrency starts to change from back then focusing on the technology of the product and the problem they are solving to now as whitepaper focuses more on how the asset can go to the moon or make more money for its investors.
Anyways you use it, the whitepaper is important for all of you to read because it provides the necessary information for you to navigate in this new maturing world. But the question you may ask is if it is important why isn’t it mentioned more often? Why do we hear the term ‘market cap’ more than ‘whitepaper’?
Why is it often ignored?
We have obviously seen the developments of the cryptocurrency space lately and it definitely is not what Satoshi Nakamoto imagined when he created Bitcoin in 2008. Bitcoin was meant to be a new payment system that was significantly better than fiat money but its role has significantly changed as right now it is more of an asset or commodity which people can trade and sometimes gain returns overnight. This is also obvious why terms like Market Cap are utilized more in the market even though they project a vague perspective of how good the coin/token really is.
So in this context obviously the role of Whitepaper is often ignored because more people are speculators which only care to flip the coin/token for a profit instead of actually reaching for the correct information in the whitepaper. This also went so far as some of the coins out there do not even have a whitepaper and their only motive is to maximize their market cap before eventually, those coins end up to be non — performing.
What we need to understand is that most of the issues surrounding volatility and scams could be addressed if more people adopted the habit of reading the whitepaper and analyzing the information in it before making any investment decisions. Of course some whitepapers out there are also made vague by the developers, but at least it will equip you with the necessary information on whether the project makes sense or not and you can eventually pick the HODL coins from shitcoins.
With a lot of speculation and hype out there in the space, the hope is that more regulations are upcoming to make whitepaper a priority in a crypto project as it is a necessity just like in the stock market for people to make informed decisions of what they are investing. Unfortunately for a lot of people out there HYPE and Market Cap could only get you so far but reading a proper whitepaper is the only way to the moon.
We in Nagaya Technologies Pte. Ltd believes that our whitepaper holds an integral part in sharing our concept and vision for the world’s first hybrid crypto-asset called Nagaya to the world. Our hope is that all our great holders worldwide could understand and believe in the breakthrough that Nagaya is paving in the crypto space. For more information regarding the latest updates on Nagaya and our whitepaper, you can visit us at nagaya.io
Or you can talk to us at t.me/nagayaofficial