A black cryptocurrency piggy bank, how safe is it?

Red Flags of A Cryptocurrency White Paper (Building Trust)

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 paper documentation regarding each coin and its 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 Blockchain white paper that should make you question its credibility:

Red Flags of A Cryptocurrency White Paper (Building Trust)

Unverifiable Blockchain White Paper Authors

The technical writers of a cryptocurrency white paper should be easily verified. However, 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. Do a reverse image search, and confirm photoshopping if you find photos and images of these people. Be diligent! 

Confusing Abstract

An abstract is a brief overview of the white paper. In addition, 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 definition is the process of reaching a stage of full or advanced development over time. For example, 12 years ago, the first cryptocurrency white paper, Bitcoin, was release. 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. Question any white paper missing a reference section.

Valuation Concerns 

Valuation definition is the estimation of something’s worth. The value of cryptocurrencies derives from their trust, hence their labels as “fiat currencies.” 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. 

Unlikely Partnerships

With the fiat currency’s main tenets, 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. Cryptocurrency whitepapers may claim that currencies provide government support. However, the government insures crypto and lists it on federally regulated markets. In that case, you should probably question the integrity of that white paper since doing so would go against the original intent of cryptocurrency.

Crypto Custody

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 your private key info to them in an email, you may want to question that cryptocurrency white paper’s integrity.

Cryptocurrency White Paper: The Bottom Line

Maybe this list inspired you to start 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. Essential Data’s Engagement Manager will lead the project from start to finish. Therefore, it does not matter if you need a team of consultants to produce a complete line of documentation or a single technical writer for a brief project. Essential Data Corporation guarantee the quality of our work. Contact us today to get started. (800) 221-0093 or sales@edc.us

Written by Latrice M. Sillers

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