How-To Guide: Purchasing ICO Tokens
By the end of August 2017, ICO coin sales have generated $1.8 billion. One of the most frequent questions I’ve seen in cryptocurrency and trading forums is “How do I participate in your ICO?” or “How can I purchase cryptocurrency (BTC, ETH, LTC, etc.) tokens?”
The blockchain ecosystem is still in it’s early days and no one has managed to streamline the process to the degree where there is an intuitive all in one solution to the above questions. I will aim to make a guide which clarifies the process. If it’s TL;DR, start here!
Set up an Account on a Crypto Exchange
Most ICOs are based on the Ethereum blockchain, so you will need to purchase some Ether. You won’t be able to participate in an ICO with Yen, USD, Euros or any other fiat currency. The best way to purchase Ether or another altcoin is through an online exchange. For this example we will use Coinbase, chosen because it is beginner friendly and easy to set up. Once you’ve established your account, you will need to link your bank account to fund the account. Depending on which exchange you choose to use, there may be a slight delay in verifying your bank account, so if there is an upcoming ICO that you want to get in on, it’s best to get a head start. Alternatives to Coinbase would be Kraken (not as suitable for beginners), Cex.io, Poloniex, Bitstamp, etc.
After setting up a bank account and verifying your details with Coinbase (or your exchange of choice), there are a few easy steps:
1. Access the ‘Buy/Sell Ethereum’ tab
2. Select the payment method using the drop-down menu
3. Enter the desired amount
4. Click ‘Buy Ethereum Instantly.’
5. View your ETH credited on your dashboard
Set up your Ethereum Wallet
With fiat currency like US Dollars, EUROS, Yen, you can store them at the bank or in your wallet. You are not in Kansas anymore. Welcome to the future.
With digital currencies, the idea is similar but there are a few differences for you to get used to. Cryptocurrency storage works by storing your coins on the blockchain in a “wallet.” This is simply an address on the blockchain. Each wallet has a public address and a private address. The public address is the address that people will use to send funds to you. The private address is what you use to access and send your funds. This will usually be encrypted in a keystore (UTC) file. Remember to never share your private key with anyone.
Another reason for you to move your coins to your own user-controlled wallet is the token sale participation. In addition to the security advantages of controlling your own wallet, generally ICOs do not allow funds to be sent from an exchange wallet for a variety of reasons. More on that below.
For this example we will use MyEtherWallet. Alternatives include Metamask, Parity, Mist or Ledger (hardware wallet). These are the steps:
- Go to https://www.myetherwallet.com, choose a strong password and click on the “Create New Wallet” button.
2. Click on the “Download Keystore File” button. This will download a copy of your wallet on your computer. Now store this file securely. After reading the message, carefully, click on the “I understand. Continue” button. It is a good idea to print a paper wallet if a printer is available. For this, click the “Print” button. If a printer is unavailable take a picture using your phone or back up to a flash drive. (See below image)
3. Now press the grey “Save your address” button in order to unlock your wallet.
4. Select “Keystore File (UTC / JSON) from the list.
5. Now press the grey “SELECT WALLET FILE…” button. From your Downloads folder or other backup location (flash drive, etc.), select the keystore file, the one that looks similar to this:
“UTC — 2017–09–30T02–32–50.481Z — a1d983b7ea73a8353bb8c0dcc4b81b58bdbe09a6”
6. Next, enter your the password you chose for your wallet earlier.
7. Click the blue “Unlock” button on the right. You can now see the wallet and your public Ethereum address. You now have your own private ethereum wallet address.
Buy ICO Tokens
Now the fun part. It’s time to get in on your ICO of choice. Make sure to read the general terms of the ICO. For this example we’ll use STARMINE AI, a hot new ICO that combines AI and Cryptocurrency, that is live now. Let’s have a look at their ‘Terms of Contribution’:
- You have to send ETH funds from your personal Ethereum wallets like MyEtherWallet, Metamask, Parity, Mist or Ledger (hardware wallet)
- DO NOT send funds from exchanges like Coinbase, Poloniex etc.
- DO NOT send your funds before the fundraiser has begun.
- Set Gas Limit to 90,000 (If it does not work during high-load network, then try increasing the Gas Limit).
- STARMINE (SME) tokens will be sent immediately to the wallet from which the ETH arrived.
When the token sale starts, you will have to send ETH to the address specified by the team. The crowdsale address will only be displayed on the official website at the time described on the site. Keep in mind that impostors often attempt to offer pre-sale tokens and should be ignored. The crowdsale address will only be displayed on the official website at the time described on the site.
8. Go back to https://www.myetherwallet.com/ and press the “Send Ether & Tokens” link on the upper left side of the menu.
9. Next, select “Keystore File (UTC / JSON)” option from the list on the left. Now press the grey “SELECT WALLET FILE…” button. From your Downloads folder, select the keystore file, the one that looks similar to this:
“UTC — 2017–09–30T02–32–50.481Z — a1d983b7ea73a8353bb8c0dcc4b81b58bdbe09a6”. Enter your password you chose for your wallet earlier.
10. Click the blue “Unlock” button on the right. In the “To Address” box insert crowdsale address which you will find on the official website of the ICO (http://starmine.ai)
11. Enter the amount of ETH you’d like to contribute to the ICO.
Token price: 1 ETH =2000 STARMINE Tokens (SME)
Set Gas Limit to 90,000 (if it does not work during high-load network, then try increasing the Gas Limit). You’ll see the following screen:
12. Click “Generate Transaction”.
For the sake of this example, STARMINE (SME) tokens will be sent immediately to the wallet from which the ETH arrived.
View Tokens In Your Wallet
You are almost there! To finish adding tokens and view STARMINE (SME) tokens in your wallet, there are a few brief steps you can follow here: “How to view STARMINE (SME) Tokens in Wallet”
