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What should I be looking for when reading ICO white papers?

Much of the decision-making of whether or not to invest in an Initial Coin Offering (ICO) rests on the white paper. This is the document that will outline everything you need to know about the project – what it’s setting out to achieve, the financial benefit you will receive, information about the team and so on.

This white paper can make or break an ICO so it needs to impress the reader. If it doesn’t, disregard the project. If it does, then it is of utmost importance that it delivers everything you need to know before you make the decision to invest.

So what are the things that you need to know? Look out for these before committing to any ICO.

The Product

What is it? Is there a blueprint or a beta version that you can test? What’s the security like around it – are they fixing bugs, making improvements quickly etc? What’s your personal take on it?

Team

Who is working on this product? Is the team on this project working solely on it? Is there anyone volunteering? Do they have a proven track record? Do a little bit of research on the key members.

Endorsements

Are there any high profile endorsements for this product?

Problem v Solution

What is the problem that the product is solving? Is it a large scale one, that many people deal with? What is the solution – and is it a unique solution? Is it workable and sustainable? And does it deliver a really smart answer to a common problem that is workable inside or outside of cryptocurrency?

Competition

Is there any competition in the market? How does this project’s approach differ to the existing competition?

Tokens

How do you buy, sell, hold or transfer the tokens? What can you exchange the token for once you bought it? How much is it worth? Are you able to exchange it for goods or a service? If not, why not? If you have, what was the experience like?

Investment yield

How many coins are there in the ICO? If the sheer scale of outstanding coins or tokens is billions, it might not carry much value for you, so do some maths and see what your potential gain looks like.

Terms

What are the terms laid out in the white paper? What percentage is allocated to the core team, both in the presale and in the ICO?

Launch

Has the product launched yet? If not, why not?

The related currency

How strong is the underlying ecosystem the token is related to (e.g., Bitcoin, Ethereum, JavaScript, etc)?

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