What is an Initial Coin Offering – Can Anyone Get Involved?

 

First, let’s talk about what an ICO (Initial Coin Offering) actually is.

Some people may be able to work it out by association – it sounds awfully like an IPO (Initial Public Offering), right? Well that’s because that is essentially what it is. It is a form of crowdsurfing, whereby an up-and-coming cryptocurrency that is not yet trading will attempt to raise money for itself before release. In return for investing in an ICO for a specific cryptocurrency, you will be provided with tokens/coins in the currency once it releases.

In essence, this allows the investor to have first-mover advantage at a very low price on a new coin. Of course, this doesn’t mean the coin you choose to invest in will do well. It could become the next big thing, or it could crash. Or most likely, somewhere in between. It is up to you as a shrewd investor (I know you are!) to do your research and pick a coin with a lot of prospects.

People make money from ICOs every day. One example I read recently was Ian Balina, who turned $50k into $4m in less than a year, and has grown his own community of followers who treat his teachings as gospel, and usually profit from it. You don’t need $50k to get started, but it clearly helps. If Ian only had $5k to invest, his holding would still be worth $400,000 now. Not bad for reasonably passive income in one year!

As ICOs are becoming much more frequent (2017 had 40x the money that ICOs did in 2016. This is both increases in the number of ICOs and the amount of cash raised in each one on average), there are coming more ways to profit. Excellent!

So how does it work? And how can I start making the right investments today? Can anyone get involved in an ICO?

 

How to Invest in an ICO?

 

Step 1 – Get Bitcoin and/or Ethereum

As per previous articles, PF suggest the exchange/wallet Copay.

 

Step 2 – Move your Bitcoin/Ethereum to a decentralised wallet
Copay, as well as other leading exchange/wallets such as Coinbase, is a centralised service (i.e. a company). If you send your Bitcoin/Ethereum to the ICO address via an exchange such as Copay, the tokens would be received by Copay instead of you (lucky them!).

To ensure this doesn’t happen, you need to create a decentralised wallet to move your cryptocurrency to. PF’s suggested site to use is My Ether Wallet for Ether and Blockchain.info for Bitcoin. You will be given a private key which you control – which means you’ll be able to receive tokens from there as well.

 

Step 3 – Invest in the ICO!
This is done by sending the crypto (usually Ether or Bitcoin) to their address. The token sale/ICO will provide the address which you will input when sending the crypto. It may sound confusing but once you’re set up with the decrentralised wallet it will be really intuitive! Just click send crypto, choose the amount, and then input the address and click send. Easy!

It should be noted that you are always doing this at your own risk. 10% of ICOs are scams intended to steal your Bitcoin/Ethereum. Do your research and see what others are saying before purchasing. An article will be made soon to let you know exactly how you ensure the ICO you are investing in is legitimate, although they usually are.

 

Step 4 – Get a hardware wallet to store the tokens securely
The two largest ones are Trezor and Ledger. These are called cold wallets and the idea is simple.

  1. Plug in the USB.
  2. Transfer the crypto/tokens to the USB via its address.
  3. Unplug the USB.

The final step makes your investment safe from viruses and hackers. Not that it is likely that a hack would happen, but it just makes absolutely sure your cryptocurrency is safe. This step is more important if you’re dealing with very large investments.

If you purchase the new cryptocurrency after the ICO, the only big difference is that you won’t need a decentralised wallet (step 2). Instead, you simply need to be registered to an exchange which is selling the new cryptocurrency.


Take action!

In summary, I have provided a simple step-by-step instruction on how to invest in an ICO with minimal risk. Of course your success ultimately depends on the quality of your research/ the people you’ve been speaking to.

Use the internet to surround yourself with people who are knowledgeable and are making money from cryptocurrencies! Find which sites are best for advice and get your information from multiple sources.

The people who make money will be the ones who act, rather than simply observing. Take action today! There is a lot of money to be made here.

Thanks for reading! Please comment below if you have any questions/ want to chat, or alternatively contact me via the channels on the Contact Me page.

 

 

 

Author: Alex

2 thoughts on “What is an Initial Coin Offering – Can Anyone Get Involved?

  1. This is an interesting article and easy to follow. If I was going to invest in cryptocurrencies (which to be honest I don’t think I am as I like playing it safe!) it would be useful. I would like to know more about how to keep my cryptocurrency safe and avoid ICO scams!

    1. Hi Aidan. Thanks for the comment! Glad you found my post interesting. I don’t blame you for playing it safe in the current market, even though ICOs are flying right now! My next post on cryptocurrencies will be focusing on safe storage and avoiding scams, so you’re in luck! Stay tuned.
      Alex

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