What are ICOs?
Initial Coin Offerings, or know as ICOs, are a form of crowdfunding in the cryptocurrency world. Buyers fund the project, and in return they get tokens on the project platform.
ICOs have raised more than $1.3b in 2017. With blockbuster ICOs Kyber and Cindicator coming soon, I will not be surprised if ICOs raised more than $2b this year.
How to take part in an ICO?
- Buy Ether (ETH) or Bitcoin (BTC). ICOs normally take in ETH and Bitcoin as their main source of funding. Some ICOs take in fiat but they are normally reserved for institutional investors or investors who put in more than $100k. You can buy ETH or Bitcoin on exchanges such as Coinbase or Coinhako, detailed instructions here.
- Find out the dates and information for upcoming ICOs. In the past, I used to go https://www.smithandcrown.com/icos/ but you have to filter out the good ICOs. Now I get my source of information on Telegram, you can join the Singapore Telegram ICO chat group https://t.me/cryptosgico.
- Transfer your ETH or BTC to a wallet that you hold the private keys to. In cryptocurrency, you don’t really own the coins unless you hold the private keys to the wallet. Thus, leaving coins on the exchange exposes yourself to an another point of failure, as seen in the Mt. Gox incident back in 2014. Also, most ICOs use a smart contract. After you send in your ETH, the smart contract will automatically send back the tokens to your ETH address. If you send your ETH from an exchange such as Bittrex or Poloniex, the ICO tokens will go into the exchange wallet and not yours.
- Token Structure. Different ICOs have different token structures. You have to find out the period for whitelisting, pre-sale and normal. Make sure you have the correct address as there are many scams going around at the moment (double check with the official site, slack and telegram).
- Storing your new tokens from ICO! Most tokens follow the ERC-20 standard, which means you can store them in any Ethereum wallet. For a web wallet, https://www.myetherwallet.com/ is a popular and free option. For hardware wallet, Trezor and Ledger Nano S both support Ethereum. You can buy both models at our shop www.pennywise.sg/shop.
Buying ICOs can be a daunting experience at first, as one can easily make a mistake and they will not get their tokens. I hope this article can help you with buying your first ICO.