As the cryptocurrency market exploded, many businesses rushed to make money off of investors who couldn’t tell the difference between a real product, and a hastily put together scam. One of the first steps to putting together either is writing a white paper, and Decrypt Media have done a deep dive into who writes these plans.
An optimist would hope that many of the writers would be serious visionaries or programmers, like Satoshi Nakamoto was for the Bitcoin white paper. That unfortunately doesn’t appear to be the case.
The outlet discovered, after speaking to roughly a dozen writers, many white papers are outsourced to contractors who have very little technical knowledge, and no investment in the long term plan of the project. Writers can bring in between $1,000 and $50,000 for a single paper, and are asked to get creative with the facts of the project to inspire more investment.
The problem stems from the businesses that create the project themselves. They want to start a blockchain project because they know its lucrative to do so, but have little care for what end product they are trying to create. They have a budget, a goal to create profit, and ask the white paper writes to invent the rest of the business model. An anonymous source said:
“There’s rarely any interest on the part of the ‘crypto startup’ of what’s in the whitepaper. All they want is to raise and everything else serves that purpose.”
Hassan Sa’eed, a Nigerian contractor, claims to have written the white paper for KuCoin. He said his method of writing the document wasn’t at all about the fundamentals of the project. “I started out with the mindset of making money to raise my head above water level,” he said. “So, it [wasn’t then] about how authentic the project is.”
The investigation reveals writers are inspired to copy previous projects, include false promises, and basically do whatever it takes to inspire more investment. Nothing is off-limits, not even financial numbers, so long as the project pays the writer. “A project that can be executed with $180k funding budget can be padded up to $450k. And they won’t report the total amount realized during ICO,” said Adefemi Yusuff Adegoke, the writer of many white papers. He concluded:
“I write for crappy [projects] too, if they’ll pay good. I won’t allow my name to be written among the team though. Money must be made.”
An important take away from this investigation is that many of the options available on exchanges, presented as legitimate projects, are really empty promises built to attract money. The industry needs to grow up and focus on real projects that are focused on creating new value for the world, not just themselves.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.