The white wire has a short unsymmetrical ac pulse voltage on it, about plus 6V peak ,to minus 15-20V peak.Consequently it also has a few V neg dc on it.Shorting it to the black wire (engine ground) will reduce the output of the generator coil so much that the plug won't fire,killing the engine.It's an old wife's tale that this can harm the cioil.That's nonsense. I sat down&computed the energy dumped into the shorted portion of the coil if the engine kept on runing at 3k rpm for another 5 sec.It would raise the temp of that part of the coil by less than 10 deg F,which can't possibly harm it
The blue wire is the coil output,It supplies the energy to the Capacitor Discharge Unit for generating the spark.The blue wire has a LARGE ac voltage on it ,a couple of hunderd volts,more than enough to kill someone if with one hand he held onto the frame and grabbed it with the other.Don't run it all over the bike,it should be connected to the CDI unit and ought not to be used with killl switches as far as I'm concerned.I recommend using a sealed reliable high grade switch for the kill switch,and don't use a local ground there either. Carry the other wire from the switch back to the engine and use that as your central system ground.