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when it comes to researching a cryptocurrency one of the most important sources of information is the projects white paper now the only problem is that white papers can be very difficult to understand especially if you dont know what youre looking for thats why today im going to explain what white papers are tell you what to look for and how this information can help maximize your crypto gains now i hate to be uncouth but i need to spit some truth financial advice is not something i do education and entertainment are the only things i have for you please contact a financial advisor if youre looking for extra revenue if this is your first time at the coin bureau my name is guy and this channel is about crypto its packed with some of the highest quality crypto content in the world coins tokens news reviews and other topics that make no coiners hurl if this is the kind of stuff you want to get subscribing to the channel and pinging that notification bell is your best bet if youre short on time dont fret ive left timestamps below that you can use to skip ahead just remember that it will benefit both of us if you stick around until the end so now that you know the nature of my labor lets explore some cryptocurrency white papers first things first what the hell is a white paper well in short a white paper is a summary of a crypto project it includes stuff like the projects purpose its design the team behind it how its funded and its roadmap white papers are typically the first thing a crypto project creates after its website and social media accounts because of this many believe that white papers exist primarily for marketing purposes since they are often intended to attract investors now this ultimately depends on the crypto project in question but its certainly something to keep in mind when analyzing white papers naturally white papers come in all shapes and sizes some white papers have lots of images and others have none as you can imagine the ones without images are the ones that require a bit of extra work to unpack similarly some white papers are extremely long this is not always justified and fundamentally boils down to the complexity of the project obviously more complex projects require longer white papers white papers can come in different colors too yellow papers offer a technical breakdown of whats going on under the hood of a crypto project and the most famous of these is probably the ethereum yellow paper which was authored by ethereum co-founder and polka dot founder gavin wood beige papers on the other hand are essentially a simplified version of yellow papers that the average person can understand at the other extreme of the complexity spectrum you have flash papers which are summaries of crypto projects that are only a few pages long and one pages which are you guessed it one page long before i break down the bits you need to pay attention to ill quickly note that white papers shouldnt be the only resource that you use as part of your research if youre curious about the other resources i use as part of my research you can find out using the link in the description now the first thing to look for in a white paper is when it was written and who wrote it this is because crypto projects tend to change over time and some of them have consequently issued multiple white papers since they were first founded as such its important to make sure that youre reading the most up-to-date white paper possible usually this is the white paper thats posted on the crypto projects website or in its documentation if you cant find a white paper on a crypto projects website or documentation chances are youll find it on a website called whitepaper.io in addition to having almost every cryptocurrency white paper white paper dot io also has white papers that were previously published by the same crypto project this can come in handy if you want to get a sense of how exactly a project has changed over time what i personally look for in previous white papers is whether a crypto project has stuck to the same script over the years or has been constantly changing focus in an attempt to keep up with its competitors i also pay close attention to any discrepancies between the previous and current authors since a different lineup could mean a different project going forward it could also mean that there are some issues behind the scenes which is bad news for any venture regardless of its nature this ties in to the importance of the team whose members are almost always the authors of the white paper if theyre not then thats a huge red flag while the credentials of a team are what tend to attract a lot of attention a history of cooperation between the core members is arguably more important than any degree or employment history a great example here is gala games whose founders collaborated on previous ventures which were seriously successful ironically gala games doesnt have a white paper but you can find out why by checking out my video about the project using the link in the description anyways the second thing to look for in a white paper is where the project is based and who its partners and backers are this is important for a few reasons for starters theres regulations now unfortunately many crypto projects based in countries such as the united states have a harder time getting off the ground than those based in more crypto friendly jurisdictions as weve seen with crypto projects like stacks being based in an unfriendly jurisdiction can often jeopardize exchange listings and the growth of the coin or token by extension even if the team does everything by the book luckily for stacks it had a sizable amount of institutional backing and this meant the project had the money it needed to meet whatever legal requirements it had to so stx could list on coinbase something which happened recently on that note its in the interest of those investors that stx lists on a u.s exchange and this is another reason why investors are important especially venture capital firms or vcs now contrary to popular belief vc investment can be a good thing because many vc investors are in it for the long run especially those that invest heavily into a project after its launched not only that but some of the biggest crypto vcs are subsidiaries of cryptocurrency exchanges such as coinbase ventures if you see these kinds of vcs in a cryptocurrency white paper its safe to assume that its coin or token could list on the associated exchange at some point in the future partnerships are important for the same reason and youre likely to see a few crypto project partnerships highlighted in a white paper now whether these partnerships are good or bad of course depends on the quality of the other crypto projects and this can take some time to assess if you dont recognize any of them if you have the time you can do a deep dive into their white papers too or you can keep things simple by just checking if the coins and tokens of those other projects are still being actively traded and if theyre listed on reputable cryptocurrency exchanges like binance coinbase ftx or kucoin although more serious institutional partnerships are rarely mentioned in a cryptocurrency whitepaper since its published early on future partnerships can sometimes be forecasted by looking at the backgrounds of the team members and their affiliates a good example here is theta which had youtube co-founder steve chen as one of its earliest advisors theta subsequently went on to partner with youtubes parent company google and theta labs was recently named as part of google clouds digital asset team no surprise then that the theta coin pulled off a 200x between 2020 and 2021. you can learn more about theta using the link in the description the third thing to look for in a white paper is the specific purpose of the crypto project and how it differs from its competitors this information is often given at the very beginning of the white paper and if it starts with some lengthy story about bitcoin being created in 2009 then thats a bad sign this is because its evidence that the white paper was catered to appeal to inexperienced crypto investors and is thus not a very high quality project ideally a white paper should get straight to the point something to the effect of were making a smart contract cryptocurrency like ethereum but faster and this is how it works an awesome example here is the terra white paper which begins with a short background to the problem its trying to address details the three things that are required to address the problem and then explains how the project achieves these three things if the authors can define the purpose of their project without bringing up their competitors then even better spending too much time talking about other crypto projects in the same category is a bad sign conversely if you come across a project that sounds like something youve never heard of before youve either found the next best thing or the next coin a simple rule of thumb that i use is to check whether the cryptocurrency is being built from the ground up or whether its a fork aka copy of an existing cryptocurrency just with some different features logically a cryptocurrency thats being built from the ground up is likely to have more potential than a modified copy if you want to make sure you dont accidentally end up investing in a coin check out my shitcoin checklist using the link in the description the fourth thing to look for in a white paper relates to the third and thats a cryptocurrencys architecture the standard constituents of a cryptocurrencys architecture depend on whether its a coin or a token for those who dont know a coin is the native cryptocurrency of a blockchain easy examples include btc for bitcoin and eth4 ethereum by contrast a cryptocurrency token is built on top of a blockchain and can exist on multiple blockchains easy examples include stablecoins like usdt and usdc the architecture of cryptocurrency coins consists of three things a consensus mechanism which secures transactions validators or miners which participate in this consensus mechanism and any additional technology such as virtual machines for smart contracts starting with consensus mechanisms the two most common are proof of work and proof of stake with the latter being especially popular as of late once youve figured out what consensus mechanism a cryptocurrency blockchain is using try and figure out whether there are any limits to the number of validators that can be a part of the blockchain this is because validator limits mean the cryptocurrency blockchain is likely to be centralized especially if validators need to submit kyc to the company that created the cryptocurrency the trade-off is that centralized cryptocurrency blockchains are likely to be faster unless they employ elaborate scaling technologies this relates to the additional technology component which can get quite technical now the main thing i look for on the tech side is whether the cryptocurrency blockchain is leveraging an existing virtual machine like ethereums evm for smart contracts or if it uses a brand new virtual machine this is again a bit of a trade-off because if a cryptocurrency blockchain is just leveraging the evm then not only is it copying another crypto project but its smart contracts might also be limited in the transactions per second they can handle on the flip side if the cryptocurrency blockchain is leveraging a new virtual machine then its possible that its smart contract functionality wont be as good as its competitors which is a very big risk in an industry as competitive as cryptocurrency other additional technologies include stuff like sharding which involves breaking the blockchain into multiple parts called shards to increase speed this is almost always done by allocating certain transactions to certain groups of validators so be on the lookout for any language that suggests that kind of stuff because its also quite popular these days in terms of cryptocurrency tokens their architectures are not as standardized to say the least and they often boil down to what category that cryptocurrency token falls into over time youll find that the same components are being used in cryptocurrencies that fall into the same category regardless of if theyre a coin or token and this will help keep the technical element to a minimum you can learn about a few crypto categories using the link in the description the fifth thing to look for in a cryptocurrency white paper is tokenomics specifically sources of supply and drivers of demand sources of supply include the annual inflation of a coin or token its initial allocation and its vesting schedule now inflation is pretty self-explanatory if theres too much inflation then the cryptocurrency will have a hard time holding its value just like the us dollar funnily enough the u.s dollars allocation is also uneven this can be a problem in cryptocurrency because if most of the initial supply of a coin or token was allocated to the team and its affiliates then the sell pressure from these parties might suppress that cryptos price especially if theyve made pretty profits along the way this really depends on how aggressive the vesting schedule is if a cryptocurrency cryptocurrencys vesting schedule is lengthy and smooth then the cell pressure shouldnt affect the price at all alternatively if a cryptocurrencys vesting schedule is short and staggered like footsteps then expect a lot of price pain the silver lining to aggressive vesting schedules is youll have a good idea of when crypto prices are likely to crash in the future and that means youll be able to buy the dip if its a crypto project you believe in on the other side of the economic equation we have demand drivers which include utilities like fee payments revenue generation such as staking rewards and other perks that give the average person a reason to purchase and hold that crypto besides mere price speculation remember that last point as far as i can tell cryptocurrency coins have the strongest demand drivers because theyre required to pay for all the fees on their respective blockchains thats why im so bullish on layer 1 blockchains if the team behind the crypto project can drive user adoption to their blockchain by doing things like building new decentralized applications and experiences chances are its respective coin will rise since users will need to interact with these new dapps and smart contracts this doesnt mean the demand drivers for tokens are trivial however quite the contrary some such as decentralands manner are used as a means of payment within metaverse marketplaces which have exploded in use over the last year to put things into perspective between the bottom and the peak mana went up by almost 500x since 2020. some cryptocurrency tokens such as mana also have additional demand drivers coming from institutional investors though these will probably not be noted in their white papers since its too early to do so at that stage in any case as basic economics dictates prices will rise if demand consistently outweighs supply and even though this isnt always obvious in the short term its clearly the case in the long term the sixth thing to look for in a cryptocurrency white paper is a roadmap of some kind this roadmap should last at least a few years and contain realistic milestones within attainable timelines realistic milestone examples include a testnet or mainnet launch a crypto wallet release exchange listings scalability or privacy upgrades and specific partnerships with a three-year time horizon be sure to take note of any exact dates as theres a high likelihood that the coin or token will pump as the milestone approaches it should go without saying that something like onboarding one billion users in one year is not a realistic milestone unless were talking about something like world coin more about that crazy crypto project in the description i digress any regular white paper readers in the crowd will know that not all of them come equipped with a roadmap this could be because the crypto project doesnt actually have a roadmap it could be because the roadmap exists on a separate document or page on its website or it could even be because the crypto project cant publish a roadmap for regulatory reasons this is especially relevant to crypto projects that come from the aforementioned unfriendly jurisdictions and you can tell if this is the case by all the disclaimers in the document that say there are no forward-looking statements or some such sentence this is because if the team or company behind a crypto project publishes a roadmap it would show regulators that theyre the ones creating the expectation of profit for any investors and that would result in an unfriendly visit from folks like sec chairman gary gensler this is what happened to ripple and you can find out how its defense against the sec is going using the link in the description the last thing to look for in a cryptocurrency white paper is something nobody ever checks and thats any references sources or footnotes this is because the devil is in the detail the references section often reveals whether the authors of the white paper are the real deal or just writing one big word salad references to run-of-the-mill websites like wikipedia or other cryptocurrency white papers is not a good sign nor is the complete absence of sources quality sources include scientific papers that are publicly accessible or even the niche crypto writings of early cypherpunks like david chalm and adam back besides giving you a treasure trove of interesting stuff to read quality references can also lead you to other crypto projects or even inspire you to create your own the same goes for footnotes which can sometimes contain critical information on the crypto project youre reading about i remember once reading a footnote that not so subtly admitted that the team has total control over the crypto project treasury this is why you should always read cryptocurrency white papers from start to finish even if you dont completely understand whats going on as i mentioned earlier youll eventually learn to spot the important stuff and understand how it works you can use the videos on this channel to help you and i suggest starting by going back to the basics and watching my video about cryptocurrency for beginners you can find that in the description and thats all for todays tutorial on how to read cryptocurrency white papers if you learn something new let me know by smashing the like button remember to subscribe to the channel and ping that notification bell to make sure you dont miss the next video if youre up to date on all the content on this channel check out coin bureau clips for behind the scenes action emergency market updates and interviews with the team you can also find me on twitter tiktok and instagram where you can get loads of memes and a whiff of my master plan i even have a telegram where youll find all the daily crypto updates you need to ride the crypto market like a steed my weekly newsletter however is even better it comes packed with info you wont find anywhere else like what cryptos ill be covering next and how i change my personal crypto portfolio and last but not least theres the coin bureau merch store which is packed with the stylish crypto apparel you seek you can find your way to all these resources using the links down below thank you for sticking around until the end of the show its been a pleasure but ive gotta go until tomorrow peace out you you Insider Info in my Socials Get The Hottest Crypto Deals “Crypto King” Shirt TOP Crypto TIPS In My Newsletter ~~~~~ Essential Videos How To Research Cryptocurrencies Gala Games Explained Theta Potential Shitcoin Checklist Crypto Categories Worldcoin Cryptocurrency Ripple Lawsuit Explained Beginners Guide To Cryptocurrency ~~~~~ ️ Useful Links ️ ► Bitcoin Whitepaper: ► Ethereum Whitepaper: ► Whitepaper.io: ► Terra Whitepaper: ► Theta Whitepaper: ► Decentraland Whitepaper: ~~~~~ - TIMESTAMPS - 0:00 Intro 1:24 Whitepapers Explained 3:22 Who Wrote It And When ? 5:22 Project Location And Partners 8:11 Why Was It Made, How Is It Different 9:53 How Does It Work 12:59 Tokenomics 15:46 Roadmap 17:33 References, Sources, Footnotes 19:03 Outro ~~~~~ Disclaimer The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome. Crypto Bitcoin Whitepaper research DYOR DYOR,Crypto,Whitepaper,
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