A whitepaper is a document that explains the purpose and technology behind a crypto or blockchain project. It contains historical performance, statistics, diagrams and facts to convince interested investors to purchase the cryptocurrency.
Having a whitepaper, especially a well-written one, is one of the best ways to convince investors about the legitimacy of a blockchain project or cryptocurrency. It helps investors to differentiate a particular project from other competitors in the space.
The history of whitepaper
The term whitepaper originated from the British government. It was believed to be first used by Winston Churchill. The term was referred to as a document printed on whitepaper and as a tool used for improving participatory democracy. The purpose of white papers was to present firm government policies, whilst inviting opinions upon them. By the ’90s, the term white paper had been conned by businesses as a form of marketing to build a case in their carefully constructed business plan or argument.
The bitcoin whitepaper
The bitcoin whitepaper is a problem/solution type white paper that suggests a solution to a pressing problem in the monetary world. It states how a trustless system can be created to facilitate monetary transactions.
The whitepaper for bitcoin titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was written under the pseudonym “Satoshi Nakamoto”. Since when it was written, it has been heavily scrutinised and gathered a lot of interest among innovators. The process from whitepaper to computer code ended up being a fast one. It didn’t take long for that computer code to begin the first steps of the Bitcoin network.
After a brief period, the first block of the Bitcoin blockchain (also known as the genesis block) was created. Since then, bitcoin and its network has grown exponentially.
The bitcoin whitepaper has 12 sections in total. It begins with the introduction outlining the purpose of bitcoin. Each section explains the mechanics of the network and what makes it so special.
The Bitcoin whitepaper recommended the following:
- A peer-to-peer (P2P) system for payments across an online network
- Eliminating third parties and replacing them with decentralized verification.
- Transactions would be irreversible
- A P2P distributed timestamp server. This would produce mathematical confirmation of an order of different transactions.