Speculators are investing 0-1% of their astronomical earnings from bitcoin and ether transactions in Initial Coin Offerings (ICOs) and token sales.

As mentioned in our article on ICO speculation tips, these sell-offs of crypto assets have reached over $1 billion this year.

The rate of fundraising almost doubled from April to May, and volumes continue to rise. The latest record was set in early July 2017 by the Tezos smart contract platform, which raised $232 million.

But the average buyer has no idea how this new technology works and how to get their hands on the tokens. If you are thinking about buying some of them, be sure to read our financial tips to avoid falling victim to sharp (up to 50%) fluctuations in cryptocurrency prices. If you still want to give it a try, here is our guide.

How to buy with ICO

1. Buy Bitcoin or Ether

This is easy to do on the leading cryptocurrency exchange Coinbase using the wallet of the same name. Link your bank account or card, make a purchase and wait a few days for the bank to process it.

It's best to do this early, at least a week before the start of the token sale you want to participate in. Also note that on Coinbase, the fee for using bank cards is higher at 3.99%, as opposed to 1.49% for wire transfer.

If you plan to store bitcoins or ethers here, then move them to a vault and make sure you are not using two-factor authentication via SMS.

Instead, it's better to use Google Authenticator or Yubikey. (For more on why this can be a terrible nightmare, read on.)

2. Transfer your bitcoins or ether to a wallet you control

This step is important because you cannot participate in the ICO using only a Coinbase account. When using centralized services like Coinbase, you don't have your own keys to your bitcoin or ethereum address.

How ICOs work - you send them your ether or bitcoins, and the smart contract immediately sends tokens to your address. But since you do not have private keys for addresses in Coinbase, if you transfer ether or bitcoins from it to the ICO address, you simply will not receive tokens. Coinbase will get them for you.

If you pay with ether, which is usually accepted at all ICOs, then you can use the My Ether Wallet service. Create a new Ethereum address there (with private keys) and transfer your ether from the Coinbase exchange to this wallet.

Another option is to use Parity, which allows you to invest in an ICO at a specific time. This feature may be needed if you think that the ICO will end in just a few seconds.

If you use Bitcoin, then Blockchain.info has a good wallet that users themselves can control. (Many token sales accept other cryptocurrencies, but bitcoin and ether are the most popular).

After you have transferred your coins to a wallet that you control (you have private keys), you can receive tokens to this address.

3. Participate in the ICO by transferring your coins to the ICO address

The token sale administrators publish the address where the money is collected for a certain period of time. Be very careful, make sure the address you are sending money to is the token sale address.

There are a lot of scammers who try to get people to send their ethers or bitcoins to other addresses. For example, in early July 2017, during its ICO, the Coindash.io website was hacked, and the scammers received $7.9 million worth of ether by simply replacing the address on the site with their own.

You can also use a smart contract to place your bet. For example, as it was during the sale of Gnosis project tokens for the prediction market. Some participants had a fear that the sale would end very quickly. Those who, say, lived in another part of the world were sleeping during the ICO, so they made their applications in advance by using smart contracts.

Due to the jet lag that occurs during many ICOs, many investors try to get ahead of the curve, paying huge fees to make sure their transactions go through quickly.

For the Gnosis ICO project, such intermediary smart contracts collected investors' money in advance, and then staked for them at the right time, thereby saving them money, since those same gigantic transaction fees were distributed among all participants, and were not assigned to one person . This means that investors do not need to trust anyone to receive their share of tokens.

4. After you have received your tokens, learn how to store them

If you have invested a significant amount of funds, then it is best to use the so-called cold wallet, "cold wallet" (one that does not have an Internet connection) and, in particular, a hardware wallet - a device specifically designed to securely store bitcoins, ethers and other cryptocurrencies.

The two most popular hardware wallets are Trezor and Ledger. Whichever option you choose, plug it into a USB port, transfer your coins to the address of this wallet (it comes with it), and then disconnect it from your computer. You have just saved your coins, so much so that they are now protected even from viruses on your computer.

If you happen to lose your hardware wallet, you can recreate it using what's called a paper backup, a set of words you can use to get your private keys back.

5. If you want to store coins that are not supported by your hardware wallet

Now this is not a very common situation, because almost all tokens follow the so-called ERC-20 standard (the standardized token on the Ethereum network).

But if you have some coins that are not supported by the hardware wallet, then one option is to save those coins in an encrypted text file on a USB drive. After that, disconnect it from the computer and store it in a safe place, such as a safe, until they are needed.

Once again, write on a piece of paper the information needed to recreate the private keys. Each type of coin should have an explanation of how to do this, since recovery methods may differ for each coin.

Another option is to store these coins on an exchange. However, if you do, remember to protect your account with something called two-factor authentication. But not with your phone number, but with the help of Google Authenticator or Yubikey. (More on this below)

How to buy tokens after their ICO

1. Buy Bitcoin or Ether

The same as in paragraph 1 above.

2. Transfer them to the exchange where they are sold

Typically, Poloniex, Kraken or Bittrex crypto exchanges offer a large number of tokens, including some of the newest ones.

When you find an exchange offering the token you want, create an account and get your address. Copy it and go to Coinbase and paste this address into the send box. In a few minutes, your money will appear on the new exchange.

3. Set up two-factor authentication, but don't use your phone number

This is an incredibly important step, and the main part of it is not using your phone number. In no case do not neglect this advice, unless of course you want hackers to steal your coins (which they often do).

They target people both known and unknown in the crypto world and steal funds from any accounts on centralized exchanges.

Their method is to convince the telco customer service representative that they are you. And that "you" want to transfer money, say, using Sprint, to another T-Mobile phone (actually, to your device).

Once all phone numbers and cell phone messages meant for you and sent to your phone go to them, they will have access to all of your accounts (such as your Kraken or internet banking account, Gmail, Twitter, or Dropbox). ) when using the password recovery function.

If you have two-factor authentication enabled via SMS or text message, then they receive these messages instead of you and simply change your password, block you and transfer your bitcoins or ethers to their wallet. Since cryptocurrency transactions are not reversible, then alas and ah - you are “out of luck”.

Instead of using a phone number for two-factor authentication, use the Google Authenticator app, which generates new codes tied to each specific service at short intervals, or an external device such as a Yubikey.

4. Exchange your BTC or ETH for tokens

Once the tokens in your wallet are secure with two-factor authentication, find the right trading pair. Let's say you have bitcoin and want to exchange it for REP, Augur's prediction market coin, which launched in August this year.

Select the number of tokens you want to buy, and if you are making a limit order, enter how much bitcoin you would like to pay for the REP.

5. Save them to your hardware wallet

If you do not plan to trade, transfer your new coins to the wallet as described above. Then be sure to secure it, perhaps by placing it in a safe at a bank and keeping a backup for recovery in more than one safe place.

The ICO fever has been tormenting the whole world for a month now. Perhaps every businessman had time to think that launching his own ICO campaign is a very good way to raise money for the implementation of his project. Moreover, issuing your own cryptocurrency or tokens does not require legal agreements or government regulation.

Although it is worth noting that in some countries cryptocurrency is prohibited in principle. In the minds of ordinary people, these two concepts, tokens and cryptocurrency, are most often mixed up. But it's far from the same thing.

Tokens are the basis of project financing, a new type of financial instrument. At the pre-ICO or ICO stages, it is tokens that are issued, which can then be exchanged for a new cryptocurrency. A token can be a coin, but a coin may not always be a token.

What are cryptocurrency tokens? The world's most famous cryptocurrency, bitcoin, also functions as a coin as a way to reward the main players. Bitcoins and similar digital currencies are mined only by mining.

But tokens can be obtained in other ways. Steemit gives users tokens for publishing content and improving the service, just like the Russian counterpart of the project, the Voice media platform. In this case, the tokens act as a referral reward, which can then be exchanged for another cryptocurrency.

Classification of tokens

Depending on the needs and desires of the company, the issued tokens can have various functions. This allows classifying such crypto assets into the following types: embedded tokens, appcoins, credit tokens, stock tokens, bond tokens, hybrid tokens. All these token models fit into the framework of familiar and understandable classical economic schemes. A particular cryptocurrency network can use several types of tokens at once.

Built-in tokens

Such tokens are a mandatory part of blockchain networks. The main tasks of embedded tokens are to reward miners and prevent spam in transactions. In fact, at their core, such tokens do not have any security or obligation, although they have their own monetary equivalent. Such features - the absence of an issuer (the person who issues them) and obligations - are differences that are inherent only in embedded tokens. It is these tokens that are called cryptocurrency. The most famous embedded Bitcoin tokens (Bitcoin tokens) and Ethereum tokens (Ethereum tokens).

Appcoins

Appcoins are quite comparable to ordinary money, but are used mainly within a single application. The more opportunities or services that can be purchased on this service, the more such a token is of interest to the user and, accordingly, its price is higher. Application tokens and cryptocurrency are far from the same thing, not all tokens can be used as a universal means of payment.

Appcoins are akin to currencies of different countries - only one coin works within one such “digital state”. An example of an appcoin is Golem, where tokens are used as payment for the rental of computing power. This project allows users to buy and sell unused computer resources. Golem tokens are used as a means of payment between users, providers and software developers.

Share tokens

Share tokens are roughly the same as ordinary shares - securities that are the property of an enterprise and provide their holder with the right to dividends and participation in important management issues. Unlike real shares, tokens are not registered. A user who has bought such tokens receives the right to manage the company, for example, to vote on investment proposals, as well as to receive dividends. The release of share tokens takes place at the stages of pre-ICO or ICO, and the funds collected from their sale go to the development of the project.

The Digix project, which developed the protocol's proof of assets system, uses stock tokens that are backed by physical gold. The platform allows you to tokenize any asset, which makes it possible to transfer digital gold using the blockchain. The owner of Digix assets is entitled to submit a business proposal and vote on existing Digix DAO proposals, as well as to be rewarded as part of the commissions from transactions on the company's network. The same type of tokens is also used by the Taas closed-end fund, designed to invest in blockchain projects. The project built an innovative system of cryptographic audit, which allowed it to become the first truly transparent fund focused on cryptocurrency. Half of Taas' quarterly profits are distributed to token holders.

Bond Tokens

A bond is a security whose owner has the right to receive from the person who issued it the value of the asset in the form of money or a property equivalent. At one time, almost every inhabitant of the Soviet Union had government bonds. There are hundreds of securities on the market today, and even government savings bonds. Bond tokens are based on the same principles in relation to blockchain projects. So, the Cyberfil company initially planned to position its token as a share. However, in the United States, surrogates for such securities were banned at the legislative level, so the company's token became a bond. As a result, the value of the token was equated to a can of drink produced by this company, for which you can exchange your digital assets.

Certificate tokens

Certificate tokens certify the right to a tangible asset, which is secured by the token itself. As a result, a token of this type becomes a digital equivalent, a surrogate for an asset. At the same time, the turnover of the asset is facilitated - the tokens easily change the owner without the need to move the material assets that provide it. A token certificate can be exchanged at any time for an asset that provides it. An example of such a certificate is Royal Mint Gold, a gold-backed token of the Royal Mint. Each DIGIX GLOBAL PTE LTD token is backed by a gram of gold held in the Singapore Vault. In real life, such tokens can be compared with bank checks, by presenting which the user can receive a sum of money. Parallels can also be drawn with gift certificates that allow you to receive a product that is indicated on paper.

Credit tokens

Credit tokens are treated as a loan. By selling tokens, the company receives funds to implement its idea, but some time after the launch of the project, buyback assets are bought back. However, the user may not wait for this period and sell tokens at any time, however, their price will be much lower. It is assumed that after the successful launch of the project, the price of such tokens will grow, and the company will buy them back with interest. Simply put, these are debt obligations in the world of cryptocurrencies.

This type of crypto assets allows companies in the real economy to raise funds. So, BananaCoin, at its core, is a banana plantation that raises funds to expand its own territory and establish marketing mechanisms. The creators of the “banana token” say that this will be the first eco-plantation in Southeast Asia. Another example is SandCoin, where the company raises money to create a sand pit near Moscow, which could provide sand to construction companies involved in the renovation program.

Coin may be especially relevant. Based on the example of such projects, it is obvious that credit tokens work well, including for local projects that do not set themselves a revolution in one area or another.

Hybrid types of tokens

Hybrid tokens, combining to some extent the functions of other types, also have a place to be. The ZRCoin project is a blockchain option for investing in the production of a unique industrial material, a synthetic zirconia concentrate. Its token, ZRCoin, combines all three properties of tokens: a stock option, a certificate, and a credit obligation. The owners of the token can redeem it at any time, returning the invested funds, taking into account the growth of its value, exchange it for zirconium dioxide (underlying asset), or exchange it for shares of the company producing this material.

Often hybrid tokens can also be discounts, that is, provide a certain discount on the purchase of another product. Thus, ICOS tokens from the ICOBox platform not only give the right to vote when choosing an interesting ICO project, but also provide the opportunity to purchase tokens of selected projects for half the cost or less. Thus, ICOBoxes make the ICO process easier for a wide range of entrepreneurs. Although this project is not perfect, it serves as an excellent example of discounts in the digital world.

One of the largest domestic ICO projects, the KICKICO crowdfunding 2.0 platform, also uses hybrid tokens. Some platform services can be bought for tokens, however, an ecosystem is developing around KickCoins, so in the future it can become a means of payment. At the same time, the advantages of KICKICO tokens were already noted at the state level - with the help of the platform, it is planned to develop a number of urban blockchain projects in Innopolis, Tatarstan.

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Invest in ICO today it is extremely fashionable, and many investors find their benefit in such an investment. Nevertheless, not everyone knows what happens to the tokens after the sale is completed, and most importantly, the important question is unclear - is there life after ICO ? Let's try to understand the problem in this article, and at the same time remember all the successes and failures that befell the coins that started by pre-selling.

How the ICO ends cryptocurrencies and what should an investor do?

The venture capital investments we were familiar with are fading away, and a new fundraising model is booming in its place: ICO . The initial placement of tokens is interesting for both the organizers themselves and investors, but the latter do not always receive the desired profit.

An ICO can end in different ways:

1. The amount needed to implement the project will be collected and investors will receive their tokens.
2. The volume of investments expected by the organizers will not be, which means that the money will return to its investors. Organizers ICO lately they have gone to the trick, indicating the minimum (soft cap) and maximum amount of funds ( h ard cap) that they plan to collect. This significantly reduces the risk that the amount will not be typed and at the same time it is possible to collect more money.
3. Well, the most banal ending ICO - scam. The project may initially be a scam, but it also happens that developers who really wanted to launch something are tempted by huge amounts of fees and simply disappear.

Investors have only one thing to do - wait for the completion of the sale, because only then will it become known whether they will receive the purchased tokens. At the same time, their distribution does not guarantee that you are lucky and you hit the big jackpot.

Tokens after ICO

Some time after the distribution of tokens, the coin enters the market, that is, it appears on the exchange. Immediately after this event, the price of coins changes dramatically - there can be no stability in this matter, there will be a jump down or an upward movement without fail. And here an important factor comes into play: the interest of investors in owning tokens. If the participants in the pre-sale start draining all the coins, trying to grab a profit, and at the same time other investors do not start buying them, then the rate will go into a drawdown.

In the same case, if the project has an interesting offer for the public, is some kind of innovative development, then the price of coins will immediately or after a while grow up. But, alas, a huge number of projects have no further growth prospects - the team spends all their efforts on ICO, and then free swimming begins, which turns into the most unpredictable consequences for investors.

New ICOs start daily and in huge numbers, but not everyone earns in them. Nevertheless, history knows both incredibly successful coins that started by selling tokens that everyone is talking about, and those that turned out to be real failures and brought only disappointment to investors.

Successful ICO projects

Now we will not make a rating of what grandiose sums were collected during this or that ICO and which projects sold their tokens the fastest. Investors do not get richer from these parameters, what is much more important is how much the coin allowed to earn after its launch on the exchange.

1) NXT - 408 177%

Nxt is not just a cryptocurrency, but also a whole platform for decentralized applications. That is, this is not a traditional bitcoin fork, but a completely separate development with great functionality. In real life, it may seem ridiculous, but during the sale of its tokens, the project collected only 21 bitcoins, which was a very meager amount at the exchange rates of 2013.

Nevertheless, Nxt has not only been launched - it is actively developing, and its tokens, which 73 investors were lucky to acquire, have risen in price by more than 408,000% today! Imagine yourself just spending 1$ to buy coins in 2013, already after 4 years, the investor would have been able to earn more than 4080$.

2) IOTA - 180 196%

An absolutely unique cryptocurrency, which, in terms of its breakthrough, is able to overtake Bitcoin itself - therefore, it is not surprising that since ICO she went up in price so fast. The innovative development for the “Internet of Things” does not work on a traditional blockchain, but on Tangle technology, which makes micro- and nanotransactions possible, has no internal commissions and miners, and generally makes it possible to make instant transfers.

ICO project was carried out in 2015, then about 434$thousand and sold almost a billion coins. At the start on the exchange, the price of the coin was negligible, today it reached 0.81$, which allowed IOTA to take 8th place in terms of capitalization, displacing Monero, NEM and Ethereum Classic.

3) Neo - 111 204%

“Chinese Ethereum” or Antshares, as the Neo coin was called at the start, did not start very well, but its developers caught on in time and not only rebranded, but also completely updated the technical aspects of the platform. Immediately after that, an active interest in the coin began and, although there is a lot of criticism against Neo, the cryptocurrency rate is growing by leaps and bounds, and this is the main thing for investors who are willing to buy a coin.

4) Ethereum - 106 673%

It is not worth talking about the next participant in the rating of successful cryptocurrencies after the ICO - everyone already knows about him. Ethereum, which is a decentralized platform for building applications powered by smart contracts, was "up for sale" in 2014. By the standards of the then ICO, the project collected a solid amount of investments in the amount of 15.5$million. Happy owners of 50 million tokens today could become real rich, provided that they did not merge their tokens on the day they were listed on the exchange.

5) Spectrecoin – 47,578%

The investment in the sale of tokens of the super-anonymous Spectrecoin coin also pleased its investors. ICO took place not so long ago, in 2016, and in exactly 12 months the project managed to prove its viability – otherwise, how could coins rise in price by more than 47,500%? And again, at the stage of selling tokens, the cryptocurrency did not raise billions of dollars, the budget was very modest - about 15$ thousand

6) Stratis - 45 185%

Stratis appeared in the summer of 2016, and began its active growth in the spring of this year - a stunning result in a short period. Investors who believed in the coin at the initial sale are very lucky, because it was easy to get rich on this asset. The reason for such an increase in the rate is that Stratis is not just a cryptocurrency, but also a blockchain platform, the functionality of which even such a market giant as Microsoft became interested in.

7) Ark - 30,038%

After entering the exchange, one Ark token was quoted at a price of one cent, today the unit price of this cryptocurrency is 3$. The platform is really worthy of attention and the investors who invest in it are very far-sighted - Ark has a whole range of functions in its arsenal, the main of which is to create smart bridges between different blockchains.

8) Lisk - 11,080%

Cryptocurrency Lisk is called one of the main competitors of Ethereum, with the latter clearly losing in comparison. One of the main advantages of the young platform is the support of the JavaScript language, which is so convenient for programmers. The coin appeared at the beginning of 2016 and in just a month collected 6.5$million, which were required by the developers for the development of the project.

Failed Initial Coin Offering

You will be surprised, but many high-profile projects that raised hundreds of millions of dollars during the pre-sale have not brought investors a profit at the moment. Moreover, investors went into the red, because the price of coins has fallen significantly compared to the one that was when entering the exchange.

• Bancor is a sensational crypt that collected a record 153$million in three hours. At the moment, investors who did not have time to drain the coins at the start are in a drawdown of -49%.
• Status– 109.4 were collected during the auction$million, and due to the hype around the tokens, there was even a malfunction in the Ethereum platform, and the ether even fell in price. All these shocks were unnecessary, because at the moment the price of the coin is in the red by -23%.
• true flip– the blockchain lottery has not yet identified the lucky ones among its investors, since they are all in the red by -47%. And such investors gathered in the amount of 6.4$ million
• Mysterium– an anonymous network for connecting to the Internet could not inspire confidence among investors and has fallen by -41% since entering the exchange, not at all justifying those collected during ICO 14$ million

And there are a huge number of such examples - we have not yet taken into account outright scams that have not brought and will not bring investors absolutely anything. Alas, the coins do not shoot for many reasons, and the investors themselves are to blame for the lost profit.

Why is the initial offering of tokens ( ICO ) does not always bring profit?

The possibility of obtaining money to develop your existing business, startup, or simply the desire to cut profit out of the blue attracts a huge number of people to the ICO sphere. Not all of them are professionals in their field, someone is a bad organizer, but there are even scammers. Many people have the strength and knowledge to make an ICO, but it doesn’t get to the development of the project, because it is very easy to overestimate one’s strengths, as well as underestimate the market. All of these reasons explain why so many ICOs are launched and why so few of them generate returns for investors.

But the blame for the current situation should not be removed from investors. Today, the number of those who want to get a crazy profit is much more than the market supply, and investors are ready to turn a blind eye to a lot in the hope of getting the coveted income. There is no need to go far for examples; here is a glaring case, which is just one of many. Not so long ago, an ICO of the UET coin was held, which collected 40,000$

Is an ICO campaign suitable for any business? No. In fact, in some cases it can even be harmful: you will spend time and money on such a campaign, but will not raise the necessary funds.

Some startup founders believe thatis a tool that can be used in any project. It allows you to quickly attract funding and avoid the long and costly process of registering an IPO with regulatory authorities. Although this was the case in the early days of the ICO market, the situation has now changed.

ICOs, like all other aspects of the cryptocurrency industry, are changing rapidly. There are informal standards that define the requirements for running a successful campaign. The first and foremost requirement is to generate value for users.

Authenticity and transparency are also important for the cryptocurrency community, which includes the ICO market. Therefore, an ICO, the sole purpose of which is to enrich the creators of the project through donations, will not arouse interest.

Before deciding how you will conduct a token sale, you need to think about whether it is worth it at all.

Does your product need an ICO campaign?

It depends if you can seamlessly integrate, which you sell, into your product. Regardless of the other factors influencing a particular ICO, every startup must answer one question before launching a campaign: will the token be important within the given business model?

For example, the value of ethers (tokens) is ensured by the fact that they are needed for the DApp to work on the network.

If the only purpose of the coins is to trade on the exchange, their price is almost guaranteed to collapse soon after the completion of the ICO. Such a campaign will not satisfy discerning users.

The main problem with any token issued during the ICO process is that immediately after entering the market, it comes under huge speculative pressure. The only thing that can resist this and prevent the token from becoming a worthless trinket is a sufficient level of demand for it. Only true utility will provide such a demand.

Thus, if you think that using a decentralized token can add value to your product, or if the token is an integral part of the product, you can move on. Otherwise, it is better to look for other funding opportunities.

What should you focus on before launching an ICO?

It is necessary to clearly define and communicate to the general public who is working on this product, what the goals of the project are, and what investors will get.

The practice of many successful ICOs shows that the team, goals and protection of the interests of investors are the three topics that interest the public the most. Therefore, these aspects must be clearly defined and articulated to the general public even before the launch of the ICO. Let's consider each of them.

How to present the team in a favorable light during the ICO campaign?

Try not to involve strangers in the team.

From the investor's point of view, a strong project team is one of the decisive factors when deciding on. Conversely, an unknown, and even worse - an anonymous team will be a "red flag" that keeps people from investing money.

Therefore, it is imperative that a list of all key team members, with their photos and social media profiles, be available to any potential investor.

But not all projects can boast of high-level professionals. Try to find an appropriate specialist in the industry and invite him to your project as a consultant. This is usually enough to win the trust of the public.

Try to avoid significant team changes before and during the ICO campaign. This can hurt investor confidence and make the campaign ineffective.

How to convey the goals of the project to the audience?

Make sure the goals are clearly defined and realistic. It is important. Unrealistic or vague goals are a major hurdle for investors, as it gives the impression that the team either doesn't know what they're doing or, worse, is trying to scam money.

Therefore, before launching an ICO, it is imperative to draw up an official prospectus and roadmap. The prospectus should clearly describe the technical aspects of the product, the problems it is supposed to solve and how it will be solved. The roadmap should set out clear and realistic goals with a time frame for achieving them.

Even more important is proof of concept. It is best if, when preparing an ICO, you can present a working, tested product to the public. Such a prototype can be given a major role in the campaign to win the trust of investors.

How to protect the interests of investors?

In order to protect the interests of investors, it is necessary to provide in advance bonuses for early investors, an escrow wallet for donations and a mechanism for returning funds in case of failure. Another important point is special conditions for investors. Discounts for first investors are a must.

It has also become practically standard nowadays to accumulate all donations in a multi-signature escrow wallet. At the same time, the names of all key holders must be known to the public. Some of the keys must be held by people who are not involved in the project, which will serve as an additional guarantee of the safety of investors' funds.

It is also necessary to provide a mechanism for the return of funds to investors, since there is always the possibility that it will not be possible to raise the required amount, and the campaign will have to be curtailed.

What factors are important in the ICO process?

The most important thing is the right timing and communication with the audience.

Of course, I would like to launch the sale as soon as possible. But in most cases, the ICO is limited in time, so you need to approach it in full readiness and launch it at the right moment.

We have considered the main aspects above - the team, goals and conditions for investors. The launch should take place only after all these issues have been resolved, which can take two to six months.

Another important aspect of a sales campaign is PR. Getting enough attention is one of the hardest things to do as new ICOs hit the market almost daily. Try to constantly communicate with your audience before and during the campaign. This will allow you to attract more people and receive feedback in order to refine your ICO launch plan along the way.

The main communication channels are social networks (Twitter and Facebook) and forums (Bitcointalk and Reddit). Consider hiring a professional who will only monitor and maintain a dialogue with people on such sites. There is nothing worse than failing a well-prepared campaign due to poor audience contact.

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This article is for people who wish to purchase coins during the ICO or after its completion.

Purchasing tokens during the ICO

Buying Bitcoin or Ethereum

The purchase of Ethereum or Bitcoin coins is carried out on the Coinbase cryptocurrency trading platform, here the user can also create a personal digital wallet. The client must connect his own credit card or account and purchase the currency. You should pay attention to the fact that it is desirable to purchase virtual currency at least 7 days before the start of the ICO. This is due to the fact that the execution of such financial transactions involving banking institutions takes several days.

Special attention should be paid to the fact that on this cryptocurrency exchange the commission for paying for a transfer is 3.99 percent, which is 2 percent more than an ordinary transfer.

Transferring funds to a wallet

The transfer of coins to the wallet is necessary, since the user cannot participate in the ICO using the account created on Coinbase. This is due to the fact that when a user uses this service, he does not have personal keys and a digital wallet address. When participating in an ICO project, the user sends his own virtual coins, and the intellectual agreement sends coins to his address. However, due to the fact that the client does not have personal private keys on Coinbase, sending tokens will become possible when they arrive at the Coinbase account, and not at the account of the ICO participant.

If the user has preferred the Ethereum currency used in most ICO projects, it is recommended to use the MyEtherWallet wallet. The participant must create a personal key there, and then transfer ETH to the created digital wallet.

Another method is to use a service called Parity, which allows you to schedule the transfer of funds for a certain time, which is convenient when participating in an ICO.

When using Bitcoin, the best wallet choice would be Blockchain.info.

After completing the process of creating a wallet and transferring coins to it, the user will receive an address on the network, as well as a private key that allows him to receive the purchased coins.

Sending funds to the account of the company conducting the ICO

The company, which is the organizer of the ICO project, places for public access the address to which participants can send their funds. However, before sending funds, it is important to make sure that the address is real, as there are many scammers on the network who want to take possession of investors' funds illegally.

So, for example, the official Coindash portal was attacked by cybercriminals during the ICO, and the address of the project was changed. Thanks to such actions, the attackers stole Ethereum coins totaling about 7.5 million US dollars.

The participant can also make a transfer using a smart contract.

For example, during the period when the Gnosis forecast market was receiving funds, many participants feared that the fundraising of investors would be very fast and people living in other time zones would transfer funds through the use of smart contracts.

The reason for this is that during most ICO projects, investors tend to be among the first investors, which is why they pay large amounts in order for the financial transaction to be completed as quickly as possible.

At the same time, during the Gnosis ICO project, such rates were collected by specialized pools in advance. The latter placed bets at the appropriate time, which saved some investors a significant amount of money, since the high transaction fee was evenly distributed among them. In addition, through the use of smart agreements, participants did not have to trust their own coins to outside people or organizations.

Storage of received coins

To store a large amount of funds, experts recommend using special offline wallets, presented in the form of compact devices that allow you to store coins without the need to connect them to the Internet.

Trezor and Ledger wallets are the most popular among such devices. To transfer coins to the device, you need to connect it via a USB port, and after the transfer process is completed, disconnect the wallet from the PC. This method of storing coins is considered the safest.

If such a device is lost, the owner can recover funds by specifying a certain sequence of words on another hardware wallet.

What to do if the wallet does not support tokens

Today, most of the issued coins are in the ERC-20 format, the lack of support for one or another type of token is rare. However, the existence of such situations is not excluded. In such cases, the participant must store such coins in an encrypted file on any USB drive. Then the device must be turned off and hidden in a safe place until this type of token is useful to the owner.

The second way is to store coins on the marketplace. In such cases, it is necessary to set 2-factor authorization in the settings.

Buying coins after ICO

First of all, you need to purchase BTC or ETH coins.

Transfer of funds to the exchange

The second step will be the transfer of funds to the cryptocurrency trading platform, where the necessary tokens are available for sale. The widest selection of coins is found on exchanges such as Kraken, Poloniex and Bittrex. After determining the necessary exchange, the user must create his own account there and receive an address. Then you should go to your Coinbase account, and enter the received address in the field for sending funds. After some time, the funds will be transferred to the selected trading platform.

Setting up 2-factor authentication

After that, the user must set up 2-factor authentication. Special attention should be paid to the fact that it is not tied to a phone number. This is due to the fact that scammers have repeatedly stolen funds from accounts using this authorization method. In most cases, attackers manage to convince the operator that they are the owner of a particular number, after which they gain full control over SMS alerts.

When authorizing, SMS confirmations are sent to scammers, thanks to which they take possession of the account, change the password and appropriate funds. In this regard, it is not recommended to use a phone number for authorization. In the case of using the phone as a means of identification, it is better to use the specialized Google Authentificator application, which creates special codes that last for a few seconds. Or you can use an external storage device such as Yubikey.

Exchange ETH and BTC for the necessary coins

The next step is to find the necessary tokens. So, having found the right coin, the owner of BTC or ETH can purchase it. To do this, you need to select the desired number of coins and create a limit order, in which you must specify the number of BTC or ETH coins that the owner intends to exchange for the desired currency.

Saving coins

If the owner of the coins intends to use them for trading, the tokens should be left on the exchange. Otherwise, it is better to save them on removable media and hide them in a safe place.