How to participate in an ICO: A Step by Step Guide
So you are interested in participating in a upcoming Initial Coin Offering (ICO) of a blockchain company, but you have literally no idea where to start. Here’s an easy step-by-step guide that you can follow on route to your ventures into the world of cryptocurrency.
Step 1: Obtain Bitcoin/Ether
Most ICOs are based on cryptocurrencies, usually either Ether or Bitcoin. So the first step is to obtain one of these cryptocurrencies. You can purchase Ether or Bitcoin through online exchanges such as Coinbase or Bitstamp (there is a whole range of exchanges that you can find here). Register an account with the exchange, and then transfer money (also known as fiat currency) from your bank account to your account on the exchange.
With your fiat currency, you can now purchase Ether/Bitcoin on the exchange that you are registered with. The cryptocurrencies that you have purchased will be sent to an online wallet provided by the exchange.
Step 2: Create a Blockchain Wallet
Next, you will need a crypto-wallet that you have control over to send and receive coins from exchanges and the ICO. After you have obtained cryptocurrency using your fiat, transfer your cryptocurrencies from your exchange wallet, to your secure user-controlled wallet such as Exodus or MyEtherWallet. There are various types of wallets catering to different types users and their needs. These include Desktop/Mobile Wallets, Online Wallets, Hardware Wallets and Paper Wallets. Refer to this link for a more detailed description.
*NOTE: If you send Ether/Bitcoin from your Coinbase (or any other online exchange) account to an ICO address, you will NOT receive the coins, they will end up on the exchange instead. It is also inadvisable to keep your cryptocurrencies stored on online exchange wallets, as they are vulnerable to hacking.
Step 3: Participate in the ICO!
Now that you are armed with cryptocurrencies in your personal crypto-wallet, and ready to dive into the ICO. All that is left is to send your cryptocurrency (Ether/Bitcoin) to the specified ICO address to receive the new tokens.
*Reminder: The transaction should be from your personal crypto-waller to the ICO’s address, not through any exchanges
**Word of caution: Be sure to read the general terms of the ICO and the guidelines for token sale participation. It is advisable to also follow the respective news and social media channels concerning the ICO to be kept informed and updated.
Depending on the way the ICO handles the transactions, one of the following scenarios may happen after your transaction:
- You will receive your tokens immediately after then token sale ends
- You may need to wait for a couple of days for your tokens
- You may need to redeem your tokens manually
Step 4: Securing your tokens
Congratulations! You have received your new tokens. You should consider securing them with a cold storage wallet — for security purposes of course. The last thing you want is to lose your hard-earned tokens should your third party wallet experience problems with their servers, or even shut down.
There you have it, a simple step-by-step guide to participating in your first ICO!