In assessing the potential of a cryptocurrency project, especially one in the initial coin offering phase (ICO), the first place to start the analysis is always the whitepaper of the project.
A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.> https://en.wikipedia.org/wiki/White_paper
Introduction
The introduction often introduces basic concepts such as blockchain and the benefits of cryptocurrencies and discusses the market that this specific blockchain project intends to include.
Problem definition
The definition of the problem digs a little deeper into the market that the project is targeting and highlights the challenges encountered in this area that need to be resolved. The challenges can be technological or related to the business. It may also include the current solution that is not sufficient to fully address the problem in question.
Product description
Below you will find the product description of the project, which will describe in detail what the platform, product or service does, how it will work and why it provides an excellent solution to the problem mentioned above.
Technical details
This will be followed by the technical details of the blockchain project, which will be an in-depth technical explanation on how the product is developed, what technological specifications it has and how its coin or digital token will come into play.
The digital token
The next section will explore how digital tokens or the new currency will work, what kind of money supply management will be implemented and how it will benefit the users of the new platform and/or the cryptocurrency community in general.
Crowd sale details
If the white paper was published as part of a token sale, you would find details on the next crowd safe. This will include all relevant launch dates, any bonus schemes, details on who can and who cannot invest, how the funds raised will be used, the project roadmap, etc.
Presentation of the team
Towards the end the whitepaper, you will usually also find a presentation of the founding members of the project and the main developers. This is important as a strong team of experts is an integral part of a successful cryptocurrency project. So you will find the professional experience of each team member and the role they will play in the project in this section.
Conclusion
Finally, the white paper will end with a conclusion, which summarizes the key points of the project and usually acts as a call-to-action to be involved in the case of an incoming token sale.
Look for the important
If you're looking at several new projects to potentially invest and want to have a quick general impression about the project before digging deeper, you can scan through the whitepaper to find the answer to the most pressing questions you should ask yourself before investing in a project.
These questions include: Is the project legitimate? Does the team have enough experience to provide? Is there a market for the proposed product or service? Who are the competitors? What is the purpose/function of token? Can the token be replaced by any existing cryptocurrency? Etc.
Search for More Information
While a project white paper should cover all the important aspects of a cryptocurrency project, if you are thinking about making a substantial investment, your research should not stop here.
Platforms like Reddit and the BitcoinTalk forum tend to provide information.
Reference
1.cryptonews.com
2.wikipedia.org
