One of the most common questions I get when discussing with interested start-ups, clients and blockchain enthusiasts alike is the question
What Is An ICO White Paper?
An important part about specifying what an ICO White Paper is, is clarifying what it is not. Here is how an ICO White Paper is different from related documents.
If we go by white paper guru Michael Stelzner, there are 2 types of white papers: thought-leadership (“traditional”) white papers and technical white papers. Sometimes an ICO white paper has also been compared to a business plan-type of document that serves as an investor’s document. In the following, I am going to compare ICO white papers to these three forms of documents, highlighting their commonalities and differences.
ICO White Paper vs. Traditional White Papers
- A thought leadership white paper is written by a company in order to show its competence and you guessed it – thought leadership – in the marketplace. Such a white paper typically discusses a new trend or technology and how it is going to impact the industry (or even the entire marketplace). For example, in 2016 the number of white papers discussing blockchain technology and its impact on a specific industry was vast.
- Hence this type of paper is typically rather high-level and abstract, until we turn from a general solution description to presenting the company’s specific solution as a way of dealing with the new challenge or capitalize on the positive potential of the new trend or technology.
- This type of white paper is quite different from an ICO white paper because it serves a different purpose, discusses a general topic and presents a company’s take on it and at the end typically shortly pitches one specific product of the company.
- The only similarities are tone of voice, style of writing and the citation of external sources that underpin the importance, size and relevancy of the challenge/trend/technology discussed.
- An example of such a white paper would be “The Blockchain Revolution – The Swiss Perspective” by Deloitte, or “Blockchain – A Potential Game Changer for Life Insurance” by Cognizant.
ICO White Paper vs. Technical White Paper
There are some critical authors and analysts that complain ICO White Papers have become flashy sales pitches instead of focusing on the technical aspects only. Such authors demand that ICO white papers be limited to the explanation of technical blockchain usage and application behind their company.
They mistake an ICO white paper for a technical white paper. They forget that a technical white paper has the purpose of exploring how a new software/hardware/technical solution works. The ICO white paper however has to explain that too while achieving the overall objective of getting readers to become investors into the entire project.
The technical white paper is a part of the ICO white paper. But only a part. And maybe in a little bit less exhaustive detail compared to your technical white paper. Technical white papers are written for coders, developers and engineers, ICO white papers for potential investors that also want to know how it works, but generally don’t care so much about the details.
For ICO purposes, technical white papers are not enough for while they may present a technically superior solution, they fail to make a convincing case of investing (leaving out the market, the team, the roadmap in many cases…). And in reality it takes some marketing to get the ball rolling.
ICO White Paper vs. Business Plan
A business plan has the purpose of presenting the business idea and model outlining to potential investors the market potential, the team and its roles, and of course finally how much money the company needs and how it will be spent. Not to forget the road map and upcoming milestones. In many ways, it is just like the ICO white paper which should include all of these elements.
ICO white paper and business plan also serve the same overall purpose: convincing the reader to invest their funds into the new business venture. Hence, making a convincing case why this venture is going to succeed once it can raise enough funds.
Yes, an ICO white paper contains a business plan. That’s what it is – but much more than that. It is expanded by a detailed explanation of the technical use case and functioning that is based on blockchain technology. It must include the answer to the question: Why are you and how do you use blockchain technology?
The only real difference therefore between the two types of documents is the in-depth technical explanation (the “technical white paper part”) of the ICO white paper.
In Summary…
An ICO White Paper is a business plan that is expanded by adding relevant external sources, statistics and surveys and integrates the technical white paper when it comes to explaining the technical details of blockchain utilization within the project.
By combining the strengths of a classical business plan with the extensive description of your technical blockchain implementation you can create an effective and successful ICO Whitepaper that will raise the funds you need to take your start-up to the next level.
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