Launching a new cryptocurrency-based startup or creating a new cryptocurrency altogether based on an original idea can be difficult without proper funding. However, getting global investors to fund your cryptocurrency can be tough without properly outlining your plans and benefits for backers.
According to Leftronic, 81% of people in the world have still never bought cryptocurrency, with only 10% claiming to fully understand how they operate. Thus, whitepapers have been introduced to the initial coin offering (ICO) projects which precede the development and subsequent launch of a new digital currency. Let’s take a closer look at the role of whitepapers in cryptocurrency development in order to get your project on the right foot.
The role of whitepapers in cryptocurrency ICO projects
To start things off, let’s talk whitepapers – what are they and why do they matter for cryptocurrencies? According to Investopedia, whitepapers are informative documents issued by companies in order to present a product or service to public backers. They are used as an advertisement material for cryptocurrencies in the sense that they offer a detailed breakdown of how the currency will be created.
Writing a whitepaper for your upcoming cryptocurrency project is essential if you want to attract lucrative investors and secure funding for your startup efficiently. Once you publish the newly-written whitepaper and set up a trustworthy cryptocurrency wallet for it, your project will experience several important benefits going forward:
- Raise public awareness of your cryptocurrency project
- Quickly filter relevant B2B investors and B2C backers
- Increased project engagement and ICO funding conversion rates
- Faster and more secure acquisition of necessary development assets
Cryptocurrency whitepaper writing guidelines
Like other formal documents, your cryptocurrency whitepaper should start with legalities about your company and its CEO, date of publishing and other relevant information. The title page should be followed by an abstract of your whitepaper for future reference and repeat reading and lead into the introduction itself.
Use the introduction (treat it like an essay intro) to introduce yourself, your company and its history. Don’t jump directly into the project itself – give your readers time to know your company better before presenting them with a cryptocurrency value proposition.
Describe the pressing issue
Once the introduction is done, you will have an important task to complete – what is the role of your cryptocurrency, and why should it exist? Whitepapers centered on ICO projects usually focus on very relevant public issues such as ecological problems, unemployment, healthcare, etc.
You need to make the reader empathize by introducing an issue they identify with – this is one of the main roles of cryptocurrency whitepapers. If you aim to solve a problem in education, investors who focus on infrastructure won’t have an interest in the project, for example. Outline the specifics of what your cryptocurrency will aim to resolve, its impact on the world and how it might affect the future if unresolved.
Describe your solution to the issue
Next, proceed to outline your solution to the issue you’ve previously presented. Do you aim to develop real-world products for international distribution or a cloud-based service? What infrastructural resources will you require to put the plans into motion?
Again, don’t delve into the specifics of financing your ICO project just yet – instead, focus on practical, step-by-step plans to solve the problem presented above. This will ensure that potential backers have a very clear image of how you intend to use the financial resources you raise through the whitepaper.
Present your project team
To showcase your proactivity and dedication to the project, it’s good practice to outline your project team in the whitepaper document. Who are your coworkers, team members and networking consultants? Which companies, startups or brands, in general, have showcased their interest in helping launch your cryptocurrency project?
Presenting such information through the whitepaper will further filter out the backers and investors who might be uninterested in your approach to ICO. It’s better to do so early on instead of running into issues of misunderstanding or unspoken information down the line – open up about your collaborators.
Set up a development roadmap
One of the most pivotal aspects of cryptocurrency whitepapers lies in the development roadmap. Mainly, what are the concrete steps, milestones and launch deadline of your cryptocurrency?
Potential backers want to have objective information about their investments and to know exactly how you intend to bridge the gap between theory and practice. You can rely on SMART goals methodology and create a rudimentary roadmap for your ICO project which can be included in the whitepaper for transparency.
List funding options and rewards
Finally, you will want to outline how potential investors can pitch in and fund your project, as well as what benefits they will receive. Cryptocurrency projects typically reward backers with special launch tokens or exclusive coins depending on the size of their financial backing.
It’s a good idea to create different tiers for backers and offer different rewards for various amounts of investments. Make sure to be fair in rewarding public investors as they will effectively put money into your project based on a whitepaper alone. Use your best judgment based on the scale and requirements of your project in writing this section of the cryptocurrency whitepaper.
Provide up-to-date contact info
Once you’ve assembled the necessary info on your ICO project, you should also include updated information on how backers can reach you. Large B2B investors will surely want to chat about details concerning your whitepaper before they invest large sums of money in a cryptocurrency startup. Likewise, including such information upfront will signal that you are a trustworthy company with serious intentions in regard to the whitepaper.
It’s good practice to launch a dedicated website for your ICO project or to publish it on a reliable global cryptocurrency network for increased credibility. Don’t give backers any reason to doubt your intentions and showcase your proactivity through professional and informative communication throughout the fundraising process and beyond.
When all is said and done, a cryptocurrency whitepaper is your most powerful marketing tool. However, following up on your promises and delivering a functional product/service afterward matters just as much for your reputation. Make sure not to oversell your abilities or to shoot for the stars and under deliver. It’s best to be realistic and allow backers to fund or not fund your ICO project based on tangible data and milestones. Consult your coworkers and start writing the cryptocurrency whitepaper today to reap its benefits as early as tomorrow.
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