Looking to invest in an ICO?
Initial Coin Offerings have been one of the most interesting things to happen in Cryptoland. They’re a relatively easy way for startups to get “crowdfunded” without surrendering stock, with investors simply giving crypto in exchange for tokens. While a number of critics point to the level of fraud that’s been plaguing the industry, the defenders’ camp points out that there are ways to counter that problem: better information on how to spot a fraud, and more/better regulation of ICOs in general.
That investors were not scared away is evident in the recent ICO figures: over $18 billion were raised in ICOs between January and now, which is close to three times the total amount raised in 2017. As with all things in this world, the spoils are not equally divided: just two players, EOS and Telegram, account for nearly $6 billion.
Major wins are out there for the taking if you know a few things about the crypto market and ICOs. So, if you want in on the game, how do you even go about it?
1. Make sure you have the right crypto. That is to say, make sure you own Bitcoin or Ether, because that’s virtually the only two options for buying tokens. And make sure they’re in a secure wallet that you can use to buy tokens with. Not on an exchange, since that’s not your wallet – and they’re not a secure way of storing your crypto anyway, but that’s another thing. Bitcoin is the mother of all crypto, but most coins are ERC20-compliant. It’s your call.
2. Go to a trusted ICO listings site. We’re obviously going to recommend TokenMeister, but that’s only because we know the quality of our work and we think careful ICO review, an easy interface and respect for both ICO owners and investors are the perfect recipe. Anyway, go to a place that’s not tainted and is well maintained: beware of places where there have been no updates in a long time, or sites with bad design or a complicated user experience. And once on a trusted site, check out the ICO calendar.
3. Now find an ICO that interests you, for whatever reason: their technology is sound, the idea is original, the name is catchy, or you knew the owner’s sister in college. Whatever reels you in, pick one. Better yet, pick a few. Mark the calendar dates; plan ahead.
4. Go to the ICO page and start digging in. This is the research phase. Read their white paper – yes, you really should – to see whether it’s all hype and fluff, or there is actual substance there. Look at the ICO owners and stalk them around the internets to see if they’re real people you’d trust to get you across the street. And read about the project. Even if code is not your middle name, make sure those in the know are satisfied. For a full checklist against fraud, read our blog post.
5. All good? Move on to register for the ICO. If you’ve selected a whitelist ICO, you have to register in advance, as there may be a limited number of tokens being issued. In some cases, not many, there is a discount for whitelist investors. If you’ve decided on how much and where to spend your crypto, the registration step should be easy, because ICO owners want to get you quickly to the next phase, which is:
6. Buy the tokens. This is apparently very easy: send crypto, get tokens. However, before you send the crypto, 1. add in the transfer cost (it’s usually specified by the ICO) , and 2. check the website address and the wallet address. Scamming can be done through websites that look trustworthy, but have a one-letter difference that would send your money to the scammer instead of the real project. Also, if you put in the wrong wallet address (and wallet addresses are not easy) , your crypto goes astray and can never be gotten back. So, check again, and after you’ve checked again, check one more time.
7. Wait. Your tokens are not instantly transferred to your wallet. Depending on how busy the ICO gets, this can take days or even weeks. Not to worry, though: you’ll be in touch with the ICO owners and new community.
8. Store securely, whether for the short or long haul. That’s easier said than done. Depending on how much you can afford to lose, you’d better make sure all your defenses are up: a safe wallet, a safe private key, a secure connection, maybe a cold wallet?
9. Flip or hodl? That’s a decision you may have made before even registering for the ICO. Why did you buy into the ICO, really? You can trade the new token off over an exchange like Bitfinex, Kraken, Bittrex, Binance etc. (You can even buy tokens after launch, also via exchanges, though not all of them carry tokens. ) If you’re hodling, i.e. holding on for dear life until the price is right, then make sure your wallet is nuclear-level-safe. A hardware wallet that you lock up in a titanium vault at the bottom of the ocean would be best; short of that, make everything safe, from the actual hardware to the place it’s stored and the key, and also make sure they’re stored in different places. And make sure you don’t forget any of the places – or your key. Did you know not all bitcoin that’s been mined is actually out there? An untold percentage is, in fact, lost to the world because the owners forgot their private keys. Don’t be like them.
Congratulations, you’re now ready to begin. A word of wisdom, though: don’t start big. For the beginning, maybe find two or three projects that you really like. Invest small (there are minimum amounts, though) and play them differently. Hodl some, flip some, watch the market, join in the community. Now that the market is beginning to self-clean and self-regulate, investing in ICOs is not just fun, but potentially immensely profitable.