Why will -insert token name here- succeed? & other crypto FAQs
While categorizing crypto projects for Researchly, I came to understand that FAQs of cryptocurrencies are very insightful for a couple of reasons:
Educational material: FAQs educate users about a cryptocurrency but also about general issues in the industry. Example questions are: „Why is <insert token name> better than <insert competitors>?“. Although used for self-promotion, such questions are nonetheless useful for getting a good understanding of the industry, especially when the projects are contrasting themselves to centralized or non-tokenized counterparts.
A means to rise awareness: Related to educational material, FAQs do a great job of pointing out industry issues that users might be unaware of.
Furthermore – and more importantly – FAQs paint a great picture of a token’s target market and the industry as a whole.
These insights can be derived when categorizing FAQs as follows:
Technical questions: Such question answer questions related to the token’s technology. For example, in the case of privacy coins (see Privacy coins vs. coins with a privacy feature: analysing privacy coins) technical questions will explain the functioning behind their privacy protocols.
Business questions: These questions answer industry-specific questions. Generally, they will explain prevalent industry issues (e.g. uneven revenue distribution in the advertising industry), potential market growth, and similar.
Earning questions: These provides answers to questions that deal with a token’s potential financial reward. One example is: “Why will <insert token name> succeed?”
From these categories a couple of insights can be derived:
Identifying the token’s target market
Depending on the type of question FAQs give a good insight into the token’s target market. The more technical the question, the more likely developers are the target. The more “earning questions”, the more likely it is that the token is targeting people who pursue financial reward instead of product reward.
Especially in the case of tokens currently running their ICO, explaining basic “Business questions“ implies that investors might not be adequately educated about the industry at hand. Considering that these projects address with their FAQs potential investors as well, it is questionable whether industry-outsiders – i.e. those without industry knowledge – should invest in the first place.
Identifying seriousness and maturity
Depending on the depth of technical questions one can get a sense of how much time the token has spent thinking about the problem they are trying to solve. The more token-related and cascading (i.e. answering token-specific follow-up questions) the more time the team has spent with their token.
Identifying real project motivation and the state of the industry
Generally, the type of question is useful for identifying a token’s real motivation. „Earning questions“ are one great example. The motivation of tokens that cover a lot “Why will <insert token name> succeed?“ questions is probably money rather than a product.
Similarly, such questions show nicely one of the industry’s biggest problems: A lot of projects are still pursuing solely financial rewards instead of building an actual product.