Beginners Guide to Initial Coin Offerings (ICOs)
Initial Coin Offering (ICO) is a crowdfunding method in which a firm, start-up, or business raises capital in form of digital currencies from investors to fund project development and in exchange give to the investors some ICO tokens that are equal in worth to the number of digital currencies they invested.
Investment in ICO could be very lucrative only if the investment is made into a genuine ICO project or company. However, due to the lack of a regulatory body for ICO, there are lots of scam and fake ICO projects around that look real. Novice or unsuspecting investors may fall victim to these fraudulent projects and lose all their funds.
To protect new investors from scam and fake ICO projects, Else Mart ICO marketing agency has put together some investment guides for beginners. Here is a basic guide to all new investors who want to venture into ICO investment.
Register for an ICO Via the Original ICO’s Website
Though ICO projects can be marketed through paid ads, blogs, landing pages, social media, every legitimate ICO project seeking to raise funds must have a website, where it would specify all necessary details about the project, like the goal of the project, the amount needed, the extent of the funding campaign, etc. This website must also contain the ICO project’s whitepaper and should be an avenue to register for the ICO. Any ICO project without a standard website is a red alert, stay off. More so, all legitimate ICO projects require that investors duly register before carrying out any transaction, otherwise, such ICO could be fraudulent, beware!
Get Bitcoin or Ether
ICO is not like IPO where funds are raised in fiat currencies. ICO raises funds in cryptocurrency, especially Ether or Bitcoin. Hence, investors must get either Bitcoin or Ether as specified by the ICO project to invest.
As an investor, you would need either of the two major cryptocurrencies in your possession to be able to participate in an ICO.
Bitcoin remains the most dominant digital currency worldwide and is pretty accepted anywhere in the cryptocurrency world. Whereas, Ethereum offers a more stable and convenient Blockchain platform for developers to set up their projects. Hence, Ether, being the token of the Ethereum platform, is used for buying ICO tokens.
Check out the detail for the ICO and find out the type of cryptocurrency required and the minimum amount that you can invest. Purchase the specified cryptocurrency from a trusted crypto exchange and move it to your wallet. Remember, using exchange-provided wallets could be risky, get an independent wallet that supports both Bitcoin and Ether.
Purchase your ICO tokens
Once you have registered on the official website of the ICO project and have gotten your funds ready in your wallet. Send the right amount of the “specified” cryptocurrency you wish to invest to the stipulated wallet address on the website. Most ICO projects make this process as simple as possible and most times, there are thorough guidelines on how to invest on the ICO project’s website.
However, you need to be very careful when sending your funds to the provided wallet address. Foremost, verify the ICO website address as many times as possible. There are lots of fake, phishing ICO websites out there that look very similar to the real websites but with a very slight difference – possibly one or two symbols difference.
Secondly, verify the project’s wallet address as many times as possible to ensure that you are not sending your fund to a scammer’s wallet. Remember, once you send in your fund, you can’t get it back.
Finally, when sending you funds, add a bit extra cryptocurrency into your transaction, this will go for the transaction fee. Most times, the amount needed as the transaction fee is usually stated on the ICO’s website.
Get Your ICO Tokens in Your Address
Most ICO tokens are Ethereum-based and can be stored in an Ether-supported wallet. Otherwise, the ICO project would indicate their supported wallet on the website. You must submit your wallet address to receive your ICO token.
Soon enough, you would receive your token equivalent into your wallet’s address. If it delays, be patient, don’t worry. Once you get your ICO tokens, store them safe and secure. I would suggest you use the Ethereum’s official wallet “MyEtherWallet.” Even if your ICO token is not supported, the wallet enables the addition of a custom ERC20 token.
How to Buy or Sell You Tokens After an ICO
If the ICO project becomes very successful, the ICO token would be listed on a cryptocurrency exchange chosen and announced by the ICO project. Once the token is listed, you may trade it for other cryptocurrencies like Bitcoin, Bitcoin Cash, Ether, Litecoin, etc. or you may buy more of the ICO token if permitted by the ICO project.
Do you have any question or wants more information about ICO investment? Please contact Else Mart ICO marketing agency on +27 (0) 61 578 0000 or email us at firstname.lastname@example.org.