A General Framework for Scoring the Reliability of Cryptocurrency White Papers

Abstract

A white paper is a document that provides a description of a particular cryptocurrency project’s business plan, and, further, generally outlines any consumptive or functional aspects of its native crypto-asset. White papers are written by founding teams and then disseminated to the public in a bid to raise the necessary funding needed to build out their project. Prospective cryptocurrency project investors read white papers to gain the information needed in order for them to make a well-informed investment decision. Moreover, there have been many instances of cryptocurrency projects being complete scams. These scams are typically orchestrated by predatory actors who use a malicious cornucopia of tools and tactics in order to raise capital from unsuspecting investors. Because white papers are extremely popular mechanisms used for raising funds, they are highly susceptible to misuse in terms of deluding investors. For this reason, I hypothesize that a White Paper Scoring Framework (WPSF) can be used by prospective investors to evaluate the reliability of white papers. To do this, the WPSF helps investors determine if a cryptocurrency project falls within one of the three following categories: 1) Very Reliable, 2) Somewhat Reliable, or 3) Very Unreliable. In doing so, this categorization technique attempts to reduce the risk of investing in cryptocurrency projects.