Cryptocurrency has been the subject of much debate within the last decade. Everyone, from crypto evangelists to extreme skeptics, has an opinion, but how can you, the individual, form your own? Technical writers have been kind enough to write thousands of white papers regarding each coin and their unique properties. But you, the reader, must be shrewd in determining which white papers are legitimate and which ones are scams. Please be advised, that this is not investment advice. Whether you “strike it rich” or “strike it broke” in the crypto space is entirely up to you! That being said, there are a few red flags in a cryptocurrency white paper that should make you question its credibility:
The technical writers of a cryptocurrency white paper should be easily verified. You should be able to find these people on social media websites, job board sites, well known academic journals, peer review websites, company profiles, or even official background screening sites. The authors should not be digital ghosts, since most technical writers tend to complete more than one academic paper. If you find photos and images of these people, do a reverse image search, and confirm photoshopping was not involved. Be diligent!
An abstract is a brief overview of the white paper. It should be short, clear, and concise. The reader should know the purpose of the entire white paper without the writer having to provide excessive details. If reading the abstract leaves you scratching your head or desiring to send a “clarification email” for better understanding, you may want to question the source of this information.
Maturation and Citation Concerns
Maturation is defined as the process of reaching a stage of full or advanced development over time. The first cryptocurrency white paper, Bitcoin, was released a mere 12 years ago. That means any credible white paper will be discussing coins created after that date, although the technology it is based on could be older. If so, there should be citations explaining where the data is coming from and its inception date. Any white paper missing a reference section should be questioned.
Valuation is defined as the estimation of something’s worth. Cryptocurrency is often referred to as a “fiat currency,” meaning it derives its value from the trust people place in it. This makes for an extremely volatile value that could change as frequently as hourly. If a cryptocurrency white paper promises you specific return amounts or instant “financial freedom,” you may want to question the writer of that white paper’s integrity.
One of the main tenets of a fiat currency is there are no legal protections since it is backed by “trust” and not insured by the federal government. Legal protections typically come from federal laws, rules, and regulations. If a cryptocurrency white paper claims its currency is backed by government owned entities, insured by any government entities or are listed on federally regulated stock exchanges, you should probably question the integrity of that white paper since doing so would go against the original intent of cryptocurrency.
Before making the leap into the world of cryptocurrency, one must decide how and where to securely store their digital assets. Self-custody means you will be in charge of securing your own digital assets and most likely using a “private key,” which is a password of sorts. If a cryptocurrency white paper requires you to enter your private key on that company’s personal website or send you private key info to them in an email, you may want to question that cryptocurrency white paper’s integrity.
Perhaps, after reading this list, you have been inspired to create your own cryptocurrency. Let’s be honest, everyone else is! And with the internet, it is entirely possible to find experienced technical writers to assist you with this endeavor. Whether you need a team of consultants to produce a complete line of documentation or a single technical writer for a brief project, Essential Data’s Engagement Manager will lead the project from start to finish. At Essential Data Corporation, the quality of our work is guaranteed. Contact us today to get started. (800) 221-0093 or email@example.com
Written by Latrice M. Sillers