By Research Group
The token generation event (TGE) — often called an initial coin offering (ICO) — is one of the most exciting applications of cryptocurrency technology. Unfortunately, many first-time token buyers express confusion at how to participate in these innovative blockchain-based crowdsales. Strategic Coin understands that the process can be overwhelming, which is why they aim to provide novice and experienced token buyers alike with the resources they need to navigate the marketplace with confidence.
Below, this guide explains the three steps you must follow to participate in an ICO or TGE:
1. Obtain Ether or Bitcoin
The majority of ICOs and TGEs only accept contributions in the form of cryptocurrency, so you will need to identify what cryptocurrencies the token sale accepts and obtain some. Many crowdsales restrict contributions to ether – the native currency of the Ethereum platform – while others accept bitcoin contributions as well.
Most token buyers purchase bitcoin and ether from a reputable cryptocurrency exchange that accepts credit card payments or bank drafts. The most popular U.S. exchange is Coinbase. It is important to complete this step well in advance of the token sale, because although Coinbase is beginning to roll out instant purchases for U.S. customers, many prospective token buyers must still wait up to a week for transactions to clear at their banks.
2. Move Your Funds to a Personal Wallet
Due to the technical structure of ICOs and TGEs, you cannot participate in the token sale directly from an exchange wallet. Consequently, you must transfer your bitcoin or ether to a personal wallet whose private keys you control and send the funds to the TGE contract address from that wallet. If you attempt to send funds from an exchange, you will lose them and will not be able to recover them.
3. Send the Funds to the ICO Smart Contract Address
Just as your personal wallet has a specific address, so does the smart contract that governs the token sale. It is very important to send the funds to the correct address, or – once again – you will lose your money. This phase of an ICO presents the most security vulnerabilities, so you must remain vigilant to avoid falling prey to a scam. As a rule, never send money to a supposed contract address sent through email or social media – even if it appears to be from the ICO organizer.
Generally, the crypto tokens you purchase during TGEs will be sent directly to the address from which you contributed. You can continue to store them in this wallet, but it’s wise to move large balances to a hardware wallet such as a Trezor, KeepKey, or Ledger Nano S. This is the most secure way to hold your coins and tokens while still having access to them if you need to make a transfer.
Strategic Coin is committed to providing you with trustworthy information about launching and participating in the world of cryptocurrency. Whether you are a start-up or existing business that desires to enlist the help of a professional utility token Initial Coin Offering (ICO) advisor or a token buyer who needs help navigating the blockchain space, Strategic Coin will provide you with the resources you need to take advantage of market opportunities within the crypto marketplace.
Tokenizing Your Utility
Featured Image from Australian Fintech