Today I would like to talk about whitepapers. This word was raped by last year a lot in my opinion. People who have not read any paper before are so hyped now about whitepapers, even if they do not understand them at all (not saying it is your case, I talk only about what I see around me and observed on my friends, or on discord).
What is whitepaper? In short it should introduce some problem, show the way or purposes how to solve it and explain the solution to the reader. We might see more oriented technical papers or more business papers and... some sh*tpapers written quickly in Word without styles to feed the expectation for whitepaper.
In my opinion whitepaper should introduce the real problem, explain why it is a problem and purpose clear solution. Of course it can contain some higher mathematical formulas and buzz words, which would not be understandable for everyone, but the idea should be clear. I tried to read some papers of "serious" projects and even of some forks. If you would like to avoid some scams, you should have answer for questions like:
"Is it real problem?"
"Is this technology really needed to solve this problem?"
"Do we need special coin for this?"
"Do I understand the proposed solution? At least brief description when someone ask me about it, would I be able to explain it to my grandparents?"
"Do I think it will be used?"
If you have answer for this question, than you can make good decision if you should participate or not. Otherwise it is huge gamble. If you do not have time to read paper, evaluate info from that and will rely on others recommendations, you probably should not invest. If you do, and it will not be good as expected, blame only yourself. My experience is, that good research can (and mostly does) prevent of loosing your money. Of course there might be some exceptions, but you can have a better chance to have good luck if you will be prepared.
If you will see project which use buzz words as smart contract, smart token, neural networks, AI in the way where it does not make any sense.. probably you should stay away or should not risk much. The same for projects which will release their whitepaper after while, when coin is on the market for a while (typical for masternode coins). I found nice opinion:
"What can you expect from team which released coin and did not have any idea about the way for it, what should be goals and purpose of the coin"
Mostly it has the same pattern:
- Team is anonymous (of course reasonable reasons as Satoshi is unknown too)
- Road map with no features (hey, lets make fork, start with ICO, create mobile wallets and focus on listing on exchanges and marketing "stuff" for next 1-2 years)
- When whitepaper is released, it highlight features of original coin which was forked from and add something like "we follow true vision of Satoshi, provide P2P transactions, we are community based, blah blah blah"
If you want to take a risk, do it, but do not be surprised when it will not work. I did it 4 and half month ago and did not expect much. Some coins are doing surprisingly good till now (i.e. MONK), some are quite stable (i.e. SYNX), some are doing bad (i.e. SAGA). But it can change in every hour. Good luck with your investments and do not overestimate power of releasing whitepapers but pay attention to what is inside.