How I bought into my first ICO and you can too

Strap in folks, this isn’t easy as pie yet, but with some tricks and some helpful advice you too can join into the future of cryptocurrency and ICO’s.

What is an ICO?

An ICO is an Initial Coin Offering and is similar to a stock IPO or Initial Public Offering. It gives you a chance to buy into a cryptocurrency before it hits wider circulation and exchanges.

How do I find ICOs to get involved with?

The ICO I used for this demonstration is called Token Lot. They host several ICOs and are an account-less service which means they don’t hold your tokens and thus cannot steal or lose your tokens. Remember to follow all of these steps well in advance before jumping into an ICO. The purchase and transfer of cyrptocurrency can be very slow. (days)

How do I find a token to purchase?

There are a lot of great avenues for finding new and upcoming tokens. There are places like TokenMarket and BitCoinTalk. When in doubt a Google search will net you the new exciting aggregator.

Okay now how to I purchase the token?

The path I will be taking you down involves a couple of services. There are many many ways you can do this, but this seemed to be the most straightforward way for me.

Step 1) Aquire Ethereum

Most tokens or “coins” or “altcoins” are built on top of the ethereum platform. This makes it easier and more economical for people to build new products and platforms. The ICO is generally a way for them to raise money in order for them to build their product. By purchasing this token you not only helping fund an initiative but it could grow in value if the initiative is successful. Coinbase is a very straightforward service that allows you to purchase Bitcoin (BTC), Litecoin(LTC), and Ethereum(ETH) using a credit card, debit card, or bank account. You will want ETH because most ICOs use that as their method of purchasing their new coin. Again, many different ways to go about this.

Step 2) Create your wallet

While coinbase acts as a wallet for tokens, it is not ERC20 compliant. This means ETH based tokens will not work if you try to send them to your coinbase wallet, only ETH itself. Several Google searches and personal recommendations led me to MyEtherWallet as a great service to act as a wallet that is ERC20 compliant, thus allowing me to use it for ICOs. A good thing about them is that they don’t hold the keys to your wallet which means that can’t steal your tokens or get hacked and lose them.

IMPORTANT NOTE

You will want to setup your MyEtherWallet and all further steps on Chrome. The next step is available as a Chrome extension and setting up your MyEtherWallet on it will make things much easier.

If you go to the MyEtherWallet homepage they do a great job of walking you through the steps to setup your wallet.

Here are some important notes. They cannot recover your account. If you forget the password and lose your account information it will be lost forever. This is a good thing because it means they cannot steal your tokens or be hacked and loose them. With great security comes great consequences if you loose your info :). Now making sure you are doing this in chrome you will need to save the information that it is giving you somewhere safe. If you leave the information somewhere that can be hacked then you will be giving away all the money in your account and no recourse to get it back. So be very careful and thoughtful where you place this information. I don’t have a hard and fast recommendation because nothing is 100% impenetrable or safe so common sense rules this one.

Step 3) Host your wallet

This next step is an important evolution in making it possible for newer cryptocurrency users to get involved with ICOs and tokens in general. Previously you would have to host your own ETH node and there were many complications with that. MetaMask allows you to link your wallet and access the tokens created in ICOs in your browser. This allows your Chrome browser to be an ETH access point. Once you go through the steps to setup MetaMask you will have your account created and have the plugin installed.

Step 4) Link MyEtherWallet to MetaMask

In order to view your wallet info you will need to select a service to access it. While in Chrome you can select MetaMask / Mist now and it will open your wallet and show you your information. This is important because you will have your wallet address and balances.

Step 5) Access the ICO

For this example I will be using one of the projects I am involved with called Avalon. This ICO is hosted on TokenLot. As you see above you have the option to purchase tokens which are priced in ETH. Your email address is important because that is where your confirmation information will be sent. Once you purchase tokens you will need to wait until the ICO is complete and the goal is met to receive your tokens so hold onto that confirmation information! The distribution address will be your account information on MyEtherWallet once you select MetaMask. Simply copy, paste, and thouroughly double / triple check you have the information right and then you are ready to buy! This process will be very similar with other ICOs and it is handy to have all of the information ready to go because many sell out quick!

Think of this as giving someone your bank account information for a direct deposit whom will give you money and then immediately disappear. You need to make sure this information is correct or you will not get your token.

Time to pay! Once you select the Pay now button (or however the ICO you are going for is setup) you will receive some options to pay. You can use your MetaMask wallet address as your payment address. In this case I will be paying ETH for AVA. Choose the amount you want to send, and choose your payment service. This ICO is nice because it has a Pay with MetaMask button that allows you to automatically link your account to process the transaction.

Step 6) Verify verify verify

We are talking money here after all! One popular way to verify your transactions is to use the power of the blockchain! One of the great aspects of cryptocurrency. I used the Etherscan option from MyEtherWallet to check the transaction history for my account.

Step 7) Wait and celebrate!

If you have gotten this far it is time to breath a sigh of relief and celebrate. You have bought into your first ICO. It may not have been easy, but I am guessing it was fun and rewarding. Plus many of the best things in life are challening. Often with ICOs there will be a minimum amount they want to raise. If they don’t reach that goal they will return the money to the backers. If they are successful the tokens will move from the master wallet to yours and you will be a proud new owner of a new cryptocurrency. Have fun with this and start off slow and small. I wouldn’t put big money into these until you have done a couple ICOs. Like preordering an iPhone at 3:00am you have to rush to get in, and you don’t want a sleepy eyed mistake to cost you big.

Bonus step 8) Tell your friends!

Talk to your friends and family about your new hobby and try to explain it to them without sounding condensending. The beauty of tokens and ICOs is that the more people that get involved the better value for everyone in it. Didn’t think I was right about something? Let me know, I would love to correct any mistakes or misunderstanding. We are all new to this great thing at some point. Let’s be an inviting community that welcomes newbies with open arms.