Cryptocurrency ICOs are enjoying a lot of hype right now and it’s growing exponentially every day. If you’re in Crypto communities or social media groups, you might’ve already heard a great deal about Initial Coin Offerings or Token sales. These crowdfunding strategies are gaining a lot of attention after the sudden increase in popularity of Cryptocurrencies. More than 2.5 Billion dollars has been raised by different ICOs, most of which came from latter half of 2017.
The ICOs are gaining a lot of attention from both institutional investors to individuals alike. Many people are quite enthusiastic to invest in the young ICOs in a hope for better returns. However, these token sales end very quickly and the majority of the public are still in the dark on how to participate in Initial Coin Offerings. In this article, we will explain how to participate in ICOs with an easy step by step guide.
How to Participate in Cryptocurrency ICOs
Before we begin, make yourself familiarize with the concept of ICOs. You need to exchange fiat currency with cryptocurrencies like Bitcoin or Ethereum. You will exchange this cryptocurrency for ICO’s tokens. The best thing is that there are no middlemen in this process. So, let’s see how to invest in token sales.
Step 1: Create an account in Cryptocurrency Exchanges
The first thing you need to do is to buy some cryptocurrency to trade in for tokens. You can’t participate in ICOs with fiat currency (legal tender approved by Governments). So, you need to create an account in any of the cryptocurrency exchanges like Coinbase. The account creation in any exchange is more or less the same. You need to fill in some details and provide valid identification proof. It’ll take some days for the exchange to approve your account due to strict KYC and AML regulations in many countries. Once the account is created in the exchange, you can simply transfer cash to buy some cryptocurrency of your choice.
Step 2: Purchase Bitcoin or Ethereum
Once you registered with the exchange, you can transfer the money from your bank account. You could exchange your USD, EUR, INR etc. for purchasing Bitcoin or Ethereum. The purchasing part is quite easy, it’ll take only a few minutes. The cryptocurrency will be sent to the respective wallet created by your exchange. We recommend you to buy Ethereum to use in ICO’s token sales as most ICOs run on Ethereum platform. However, you can also buy Bitcoin as most ICOs accept them as a payment form.
Step 3: Transfer Cryptocurrency to Personal Wallets
To purchase ICO’s tokens, you need to send cryptocurrency to their accounts. But you don’t want to do that from your exchange unless you want your Exchange to have to tokens. You need to set up a personal wallet like My Ether Wallet which you have control on. You need to have control of the wallet’s private key to access your new tokens. So, you can’t use exchanges or random online wallets to participate in ICOs unless you want to lose the tokens you bought.
Step 4: Participate in ICO
Finally, you get to participate in an ICO sale. Make sure that you’ve logged into your controlled wallet and filled it with Ethereum or Bitcoin for trading with ICO. Out of personal experience, most of these token sales end up pretty fast, so be quick with the transactions. You need to send the cryptocurrency to the ICO address mentioned in their website or announcements.
Also, be aware of the address to which you’re sending cryptocurrency. Make sure that the address is correct and obtained from the official website or channels. A lot of scams were reported where the scammers give you their wallet address in fake social media channels. Once you’ve verified everything, transfer the cryptocurrency to get your tokens. You will need to set a proper gas limit which is controlled by the MetaMask interface. You may receive the tokens instantly or sometimes it may take a couple of hours to days. Once you receive the tokens, transfer them to a secure wallet of your choice.