How to Invest in ICOs
A simple step-by-step guide to investing in ICOs
Investors are throwing their savings into token sales and initial coin offering (ICO). These crowd sales of crypto assets have gained a lot of traction in the past year. Participating in an ICO sale is easy — all you need is an internet connection, Ethreum wallet and a little money to invest. There are no restrictions on joining an ICO campaign either.
However, everyday speculators may not have a handle on all the information related to investing in ICOs. So if you are one of these investors, this guide is for you. Here, we will cover everything from getting a crypto wallet to finding the best ICO.
How do I find a crypto wallet?
Most ICOs use Ethereum’s blockchain to develop their unique cryptocurrency token and project. Furthermore, these tokens work on Ethereum-based smart contracts to carry out different things such as token distribution. Since many tokens use a lot of Ethereum’s functionality, they are known as ERC20 tokens. That is why many ICOs can be easily purchased through Ethereum’s own coin, Ether.
As most of the tokens take Ethereum’s functionality, we will give you the example of setting up an Ethereum wallet. With this wallet, you will find it simpler and quicker to buy different ICO tokens that are compatible with ERC20. There are different wallets for storing these tokens and Ether coins; some of the popular ones include MyEtherWallet, MetaMask, Cipher, Mist, imToken, Parity, and Trust.
As a tutorial, we will share a brief primer on setting up one of the most popular Ethereum-based wallets — MyEtherWallet.
Setting up MyEtherWallet
MyEtherWallet is a user-friendly online wallet that is used for storing Ether (ETH) coins. Built on the Ethereum network, this wallet allows you to transact Ether coins, execute smart contracts, and even store the ERC20 tokens.
Visit www.myetherwallet.com first. To ensure that a wallet website is authentic, you need to make sure that it has an SSL certificate. Such certificates increases the credibility of the website proving that it might not be one of those phishing scams.
While setting up a wallet on MyEtherWallet, you need to give a unique password. It is recommended that you should not link this password to your other accounts such as your email. Otherwise, your password will be simpler to crack. The wallet will store all the funds, so the hacker who has this password will have access to all the cryptocurrencies and tokens you own.
When you set the password, you will be prompted by the system to save the Keystore File as well. Basically, the Keystore File is just an encrypted password for the password you have just set. The password needs to be saved securely. MyEtherWallet’s website offers many warnings and tips about how to store the Keystore File, so it is better to follow those instructions.
The Private Key will let you access your wallet based on MyEtherWallet. Nobody should ask you about the Private Key because they will not need it. Which is why, you should never give this key to anyone under any circumstances. It is advisable that you copy and paste this Private Key into a text document and save the document next to your Keystore File.
MyEtherWallet’s website gives many tips on how to securely store the Private Key and it is in your best interest to follow these tips and guidelines by the book. Once you have set the Private Key, you have successfully created your Ether wallet.
Unlocking the wallet
Your MyEtherWallet needs to be unlocked every time you sign in, or every time you plan to make a transaction. There are different ways to unlock the wallet. The most popular one remains the Ledger — a hardware USB wallet which can be connected to MyEtherWallet. However, if you do not own a hardware wallet, you should use either a Private Key or a JSON Keystroke File to unlock this wallet.
The wallet interface
Once the wallet is unlocked, you will view two separate pages: Public Address and Transferring ETH. The Public Address page will have your wallet’s address, which is also known as the Public Key. This key needs to be shared whenever you want to receive ICO tokens or ETH. However, the Transferring ETH page is accessed to send the ICO tokens or Ether.
The Gas price
While sending Ether or tokens to anyone through this wallet, you may have noticed the presence of a Gas limit. The amount of Gas available in your wallet will be used for determining how fast the transactions will be approved. That is, if the transaction is urgent, you will need to spend more Gas and vice versa.
With this wallet, you can send different tokens — that are backed by smart contracts — to anyone. Similar to emails, the ETH coins or tokens should be sent to a specific address. You need to ensure that the keyed address actually belongs to the actual sender. Unlike fiat transactions, there is absolutely no redress for ERC20 tokens or Ether if they are sent to a wrong address.
Once you have set up a wallet, you will need to sign up on a cryptocurrency exchange.
How should I sign up on a cryptocurrency exchange?
Bitcoin! Ethereum! Ripple! The crypto space is exploding, and a cryptocurrency exchange is the only gateway. If you plan to jump on the crypto bandwagon and convert your USD, GBP, or EUR into a cryptocoin, then find a reliable exchange first and sign up.
Right now, the crypto world has a lot of cryptocurrency exchanges — such CEX.io, GDAX, Poloniex, and Kraken. Because of so many exchanges, investors have become spoiled for choice. As a tutorial, we will give you a step-by-step guide to registering on Kraken and owning some Ether coins.
CEX is a leading exchange for trading Ether coins and other cryptocurrencies. This cryptocurrency exchange provides a highly secure environment, reliability, legal compliance, and the like. Some of the benefits of registering on CEX include high liquidity and fast funding. Now, here are the steps that should be followed to register on CEX.
What do you need to register on CEX?
- Personal information.
- Email address.
- PC or Mac with an updated browser (e.g., Chrome, Firefox, Safari).
- 1 stepGo to website cex.io
- 2 StepThen, create an account, for that you need to fill your email address, password. Once every field is filled, press Register
- 3 StepAfter that you have logged in, the dashboard/overview/control page will look similar to this.
- 4 StepThen you will move to page where you need to enable Two- Factor Authentication on your account. You will receive 2FA code either through Smartphone app or SMS /PHONE request. If you wish to get verified through Smartphone, then you download 2FA backupkey, download app and scan QR code and enter 2FA code from the app and click Next. If want to get confirmed through SMS/Phone Request, select the country code and enter your phone number. you will receive 2FA code to verify your phone number.
- 5 StepThen after confirmation, you proceed to the social registration page, where you need to fill email, password, phone number and then Register.
- 6 StepAfter that, you have the deposit and withdraw option. To deposit, go the deposit page by clicking ‘deposit’ icon. On the deposit page, you have to choose deposit payment method – Payment card, Bank Transfer or Crypto Capital.
- 7 StepIf you choose payment method, then you have to add card and deposit in few steps. After clicking on start verification, you have to fill all details regarding card information. If you choose bank transfer method, then after identity verification, you need to fill all details and your account limits will be also increased after successful verification. Similarly, you can verify through crypto capital method by filling all details.
- 8 StepTo withdraw, you have to choose withdrawal payment method by payment card or CryptoCapital method.After completing all the steps you will be ready make your very first deposit. Then you need to again select the correct currency along with the appropriate deposit and withdraw method accordingly.
How can I buy Ether?
Once your Ethereum wallet is established and your exchange account is verified, you need to head toward getting some Ether coins from CEX.IO exchange. This exchange allows you to buy Ether from either your credit card or debit card. Regardless of which card you’re using to get ETH coins, you need to ensure that the funds and the transaction will be secure and streamlined. For this, you have to follow the following steps.
- First, you need to understand that whenever you’re buying Ether through your MasterCard or Visa on CEX.IO, you’re actually making any other normal online purchase. Yes, this isn’t any rocket science.
- Second, you need to fill your card details including your name, card number, CVV code, and expiry date.
- Now, once your card gets verified, it’ll take only a few clicks to finish the purchase.
All in all, for buying ETH on this exchange, you don’t need any specific skills or knowledge.
Withdraw the ETH coins to your wallet
After you have bought the Ethereum coins, you should make sure that they are transferred into your own personal wallet. Essentially, you should not let those coins sit in your exchange’s account. This withdrawal of the ETH coins should be done on your own wallet — such as MyEtherWallet — because if an exchange becomes insolvent or if it is hacked, you will end up losing all the coins stored in your exchange account.
Buying ICO tokens from Ether coins
After you have transferred the Ether coins to your wallet, you should find an ICO project that you want to invest in it early stages. Here is a step-by-step guide that will help you invest the Ether to buy ICO tokens.
- Once you have found a crypto project, you should visit its page.
- There, you should find all the details related to the project’s token sale; these details are also present in the crypto project’s white paper.
- These details will also have the address of where the company, which is behind this project, is collecting the money.
- This token sale is limited to a specific window of time.
- Before trading the ETH coins for the ICO tokens, you should double-check the token sale’s address.
- Furthermore, if you are buying the ICO tokens using Ether, you may even use the functionality of smart contracts.
Storing the ICO tokens
Once you have traded ICO tokens for your ETH coins, you should make sure to store them in a safe place. You may even store every single ERC20 tokens in MyEtherWallet. Nevertheless, if you have invested a lot of money in tokens, it is advisable that you store them in a cold wallet or a hardware wallet. The option of picking a hardware wallet or a cold one is best suited if you are not selling the ICO tokens anytime soon.
Now, you know a great deal about ETH-based wallets, exchanges, and buying Ether coins. With these coins, you can easily invest in any ICO campaign with the hope of enjoying excellent returns in the future. Visit our ICO page to see what projects are active and upcoming and find yours.