Initial Coin Offerings (ICOs) or token sales have emerged as the favorite way for blockchain-based startups to raise capital. Given the newness of blockchain technology, most companies in the sector have found it challenging to raise funds through the available methods in the traditional banking system forcing them to go for ICOs. For the average person, participating in a token sale is not straightforward. This is mainly because the ecosystem lacks standards and is new.
Background Information
Businesses hold pre-sale and/or public sale for their ICOs. Those wishing to participate are supposed to buy these tokens using other Cryptocurrencies such as Ethereum and Bitcoin. The total number of tokens available and the amount raised determines the price for each token. One of the greatest benefits of participating in an ICO is that the tokens sell at a much lower price allowing the investors to make a profit when they sell them later.
Ether is a good example of a successful ICO. Nevertheless, although the early investors made huge gains, it did not happen overnight. Some ICOs takes days, weeks, or even months before the investors can realize benefits. You only need to be a little patient and careful and all will be well. Here’s a beginner’s guide on how to go about it.
Get Ether or Bitcoin
Most ICO’s require their customers to buy their tokens using Bitcoin or Ethereum. Luckily, you can acquire the two coins in various ways. Cryptocurrency exchanges are the most popular sources of Bitcoin and Ethereum. Identify an exchange that supports fiat deposits, register, and buy your first altcoin. If you are a Bitcoin or Ether miner, you may use the coins to buy ICO tokens. If you have a business, you may allow your customers to pay in either Bitcoin or Ethereum and then use coins to buy ICO tokens. You may also get the two digital assets from your friends and relatives as a gift.
Move Your Ether or Bitcoin From The Exchange To Your Wallet
The general rule in buying ICO tokens is that you should not do it on your Cryptocurrency exchange account. However, there are rare cases where an exchange may allow its customers to participate in a specific using their online wallet. You need to send your coins to a wallet that you control. When you send Ether or Bitcoin from your exchange to the company selling the ICO tokens, you will not get the ICO tokens and this will be equivalent to losing your funds.
Blockchain.info is one of the best storage options for Bitcoin holders. Create your account and send you coins here as it has an excellent user-controlled wallet. Ether is another commonly accepted Cryptocurrency in most ICOs. You may create an account on Parity and send your Ether there. Alternatively, you can create a new Ethereum key on sites such as My Ether Wallet. Once you have loaded your user-controlled wallet, you will get an Ether or Bitcoin wallet that you can control its private keys. Once you buy your ICOs tokens, you will get them in your account.
Sign Up On The ICO Website
Identify the website of the ICO you want to participate in. You should enter your email, password, and any other data that is needed. It is advisable to do a background check and ensure that you are dealing with legit dealers. Spare some time and go through the general terms of the ICO before signing up.
You should also follow the project on social media channels such as Twitter and Telegram among others. This will ensure that you always remain updated about the project. Furthermore, you could use social media to reach the company’s support when their agents fail to respond on their website.
Send Your Funds To The ICO Address
Now that you have funds in your wallet and you have confirmed that the project is legit, it is time buy your first ICO tokens. Generally, the company will provide a Bitcoin or Ether address where those wishing to buy the ICO tokens will send their money. You should be careful not to send your funds to the wrong address, as the process is irreversible. Furthermore, although regulatory agencies such as US SEC have put various measures in place to protect investors, you should be careful of the fake ICO websites that appear as ads.
An ICO sale takes place over a specified time. During this time, however, there may be so many people trying to buy the ICO tokens. This may delay the processing of your transaction. You can enter your wallet’s address on the search bar to check the status of the transaction.
While buying the tokens using Ether, remember to set aside extra coins that will be used as the transaction fee. The amount is used as gas to enable the transaction. You should go to the project’s website to establish the required amount of gas.
Get The Tokens In Your Address
After you have successfully sent funds from your wallet address, you should receive your ICO tokens. This may not always happen immediately. The delay may be due to a high number of purchasers. However, depending on any given campaign, it may take minutes, hours, days, weeks, or even months before the tokens arrive in your wallet.
Trading Your ICO Tokens
Now that you have ICO tokens, you may trade them immediately or store them and wait for them to appreciate. Look for your preferred trading pair. For instance, if you want to exchange your ICO tokens for Bitcoin, indicate the number of Bitcoins you want to buy. When making a limit order, indicate the amount of ICO tokens you want to pay per Bitcoin.
Storing Your ICO Tokens
A hardware wallet is one of the safest places to store your ICO tokens. Such a wallet should preferably not be connected to the internet. Ledger and Trezor are some of the safest wallets where you can store not only your ICO tokens but also other major Cryptos like Ether and Bitcoin. Given that most coins nowadays follow the ERC-20 standard, you will rarely come across a coin that is not supported by a given wallet.
