The emergence of the blockchain and cryptocurrencies, especially Ethereum, has opened up a new kind of investment currently known as ICOs. If you’re looking to invest in ICOs and need to be shown the way about safe investment and managing your funds, this article is perfect for you.
- 1 ICO investment
- 2 How to invest safely and easily
- 3 Conclusion
What is an ICO?
An Initial Coin Offering, also commonly referred to as an ICO, is a fundraising mechanism where new projects sell their underlying crypto tokens in exchange for bitcoin and ether. It’s similar to an Initial Public Offering (IPO), with the only difference being in IPOs investors purchase shares of a company instead of its tokens. As the company’s value gets higher and becomes well established in the marketplace, the token’s value rises as well, which enables investors to gain more profits. Tokens also provide users with future access to a product or service. Through utility token ICOs, startups can raise enough capital to fund the development of their blockchain projects, and users can purchase future access to that service, sometimes at a discount off the finished product’s sticker price.
History of ICO potential profits
In 2014, the famous Ethereum was a pioneer in the space of initial coin offerings, and the team successfully raised $18 million in 42 days, making it the number one most funded ICO in cryptocurrency. Since its inception, Ethereum has quickly grown and has become the world’s second-most valuable cryptocurrency ecosystem. Ethereum debuted with an ICO price of around $0.30, and trades today are in the vicinity of $440.
The table below shows two examples of highly successful ICOs that launched their businesses in the last two years:
|ICO||Year||Sale Phases||Funds Collected||ICO initial price||All time high|
|Neo (ex Antshares)||2015||Phase 1: October 2015 (end)
Phase 2: September 2016 (start)
|2100 BTC raised
6119 BTC raised
Total amount: 4.5M $
|Block.one||2017||5 days selling phase||185M $||0.925$||5$|
This year has seen an explosion in the success of ICOs with a number of projects breaking records for total amounts raised. ICOs began to surge over the first half of 2017 with projects amassing millions of dollars within a matter of days, or sometimes even hours. However, ICOs can still be a valid scamming threat, thus any intention to invest in such a business should be properly thought out before taking any action.
Traditional ICO investment
The process of investing in an ICO boils down to this: You send some ether to an address, and after the ICO’s done, you get tokens in an amount proportionate to the amount of ether you’ve sent. A typical ICO (again, every ICO is different. Read the terms and conditions very carefully), will look as follows:
1. Register for the ICO through the project’s website
Some ICOs don’t require any registration. This is a red flag, although it’s still possible that it’s a legitimate project. Sometimes this will involve sending scans of your passport or a similar document. If you’re not comfortable with this, stay away. In some cases you will be asked to provide an address to which you want to receive the ICO tokens. Make sure you send a Parity/MEW Ethereum address that you have access to.
2. When the ICO starts, send some ether to the address provided on the ICO website
The ICO’s website will typically have a counter and a clearly designated date and time when you can send funds. Do not send your ether before that time or after the ICO ends. Many ICOs are capped to a certain amount (like 10 ETH per person). Do not send more than your personal cap. Make sure you set the right gas price and gas limit (gas is the extra ether you have to pay for an Ethereum transaction to go through). These are typically laid out on the project’s website.
3. Per the ICO terms, you get tokens to your address
This might take a while. Sometimes the tokens will be sent immediately, sometimes it can take weeks, months or even longer. When you receive the tokens, they may not be immediately tradable. This depends on the smart contract within the token. These details were probably laid out on the project’s website. Sometimes things will go wrong — or appear to have gone wrong. Don’t freak out if you haven’t immediately received your tokens. During a busy ICO, these things can get delayed, and deadlines can move a bit. Consult with other investors on the Internet and other social channels.
What is the problem with ICO investment?
Even though ICOs present a good investment opportunity for making huge profits in a relatively short amount of time, there are still a few issues with ICO businesses, which are presented as the following:
As any other business that puts investors’ money at stake, ICOs are vulnerable to cyber attacks. These attacks can be done in different ways, be it through fake addresses, scamming investors, emails, or even creating fake ICO websites, as it was recently the case with the phishing attempt on Blockstack ICO.
ICOs define a limited time range in which you can buy their tokens, and even though these time ranges are different depending on the business, an investor should buy tokens as soon as possible if the opportunity arises for seemingly huge profits with an ICO. This was illustrated this year when the blockchain-based browser Brave launched an ICO, since it had collected 35M dollars in just 30 seconds.
Learning how to setup an Ethereum wallet outside of a centralized exchange, like Coinbase, is important for any person wanting to invest more into the cryptocurrency space. Centralized exchanges carry a heavy risk however – your assets can get frozen, lost, and controlled by the government, just like what happened with the Mt. Gox scandal. That’s why the investor should set up his or her own wallet outside of a centralized exchange to one that they owns, transfer his Ether to the new wallet, and purchase the custom token. For anyone who wishes to set up his or her own wallet, you can find the complete steps in here.
Managing multiple wallets and addresses for years
An investor should certainly aim at investing in various and multiple ICOs whenever a good business arises. This can eventually lead to being stuck with multiple addresses to manage. This process can also prove very difficult as an ICO is more likely to rise slowly in value rather than making a huge immediate profit, which means that the investor will have to deal with managing multiple wallets for a long time.
How to invest safely and easily
ICO platform solution
In order to address the previously mentioned issues, ICO platforms have emerged to offer instant, safe, and easy-to-use solutions, as they allow not only safe platforms where the hacker threat is minimized but they also offer the ability to manage multiple wallets with the tokens they contain in one single place. If you’re looking for the top ICO platforms available out there, look no further because that’s what we are going to see next.
Top-3 ICO investment platforms
KICKICO is an online blockchain-based crowdfunding platform that allows its users (projects authors, advisors, translators, announcers…) to collect funds through the blockchain-based tools offered by the platform, as well as smart contracts. The problem that KICKICO strives to solve is the rash of fraudulent ICOs that have arisen as a result of successful ones. KICKICO combines two industries: blockchain and crowdfunding. Instead of centralized platforms like Kickstarter or Indiegogo, KICKICO gives people the right to choose and protect their smart contracts. The KICKICO platform supports three kinds of fundraising campaigns: ICO, crowdinvesting, and crowdfunding. No other platform can boast that same level of flexibility and freedom of choice.
Benefits Of KICKICO
KICKICO aims to change the way companies launch crowdfunding campaigns and how investors participate in them. Here are some of the proposed benefits according to the KICKICO whitepaper:
- Allows for the creation of a marketplace within a platform
- Motivates project authors to be successful on the platform
- Motivates participants to be active
- Protects investors from defaults
Drawbacks Of KICKICO
- Similar to Kickstarter, KICKICO is suited only to smaller scale fundraising projects.
- It seems like the biggest advantage KICKICO has over the major players is the fees. However, KICKICO is not necessarily cheaper than current solutions. For example, Indiegogo charges 4% (same as KICKICO) when a crowdfunding goal is met.
Blockstarter is a blockchain-based crowdfunding platform for launching ICO campaigns. It helps users carry out a crowdsale campaign from A to Z: create smart contracts, generate an ERC20-compatible token, engage with investors and bounty hunters, raise funds, and even find professional team members for your project. All this with zero actual coding: the advanced UI will allow any entrepreneur with a basic grasp of modern technology to launch a crowdsale. It features a user-friendly interface; numerous options like customized smart contracts written automatically for specific purposes of a project, and an API for third-party websites that would empower a campaign, among several other options. While it all seems quite promising, one of the most important features proposed in this solution is the utter reliability of the entire ecosystem. More importantly, such a solution could become the first step in developing a trustworthy standard for crowdsourcing campaigns that the industry desperately needs. Such standards could cut out all scam projects, let more interesting projects in, and eventually become the link between traditional industries and the crypto industry.
Benefits of Blockstarter
- BlockStarter has built an Ethereum-like powerhouse where ICOs can be created, marketed, and funded with ease.
- Smart contracts are generated easily.
- Non-tech savvy dashboard and panel.
Drawbacks of Blockstarter
- Wide availability of similar projects for launching ICOs such as KICKICO.
Cryptonomos is an innovative platform for conducting Token Launches and servicing tokens. Either through their website or mobile app, Cryptonomos makes it easy to buy and sell tokens of ongoing Token Launches. As soon as you set up your Cryptonomos account, you can transfer funds directly from your bank or any external cryptocurrency wallet and start browsing ongoing Token Launches. Safe and secure with two-factor authentication, your cryptocurrency and your tokens are well-protected. The mobile app is easy to navigate, and gives you mobile access to exciting new opportunities. On the Cryptonomos platform, every transaction is recorded and you have access to detailed transaction histories through which you can keep track of your earnings, token price increases, etc. The dashboard also contains a clear and easy to use “Referral Program” section that lets you earn rewards for bringing in new token holders.
Benefits Of Cryptonomos
- The ICO services available from Cryptonomos span the entire process of the crowdsale. Before the ICO begins, it can help with legal analysis, the ICO website design, token economics, and more.
- It assists with technology such as securely collecting funds, developing tokens, and creating a secure user wallet.
- Cryptonomos also offers additional services such as early backer engagement, PR¸ escrow, and community channel management.
Drawbacks Of Cryptonomos
- Cryptonomos is still developing as an ICO platform, so until it becomes widely adopted by businesses, users and businesses alike should use it cautiously and not rely entirely on the platform for their organization.
How to manage your ICO tokens with Cryptonomos
1. One unique account
Here’s a step by step guide on how you can manage your own ICO tokens using the Cryptonomos platform.
The first thing you will need to do is register on the Cryptonomos website. After accessing cryptonomos.com, you’ll find the sign up button in the top right corner as shown below:
Afterwards, you can register either by using your Google account or by registering on the website after filling out the form.
Registering using your email will redirect you directly to the feed page, while registering by filling the form requires account activation through the email that you provided. Either way, after registration and logging in, you will be redirected to the page shown below:
Registration on the Cryptonomos platform allows you to look for WTT tokens. There are two ways to do this. Either by clicking the ‘Dashboard’ button to view the widgets of the companies whose tokens you’ve bought…
Or you can scroll down the list and find the widget that you need — just like this:
2. Buy in one click
On the other hand, the feed page shown after logging in lists different ICOs on the market, with a short description about each ICO, its current rate, and the period remaining to buy its tokens (if it’s not already closed). You can also consult the whitepaper, or learn more about the ICO by accessing its website through the platform. More importantly, hovering your mouse over an ICO in Cryptonomos shows the buy button in case you want to buy the tokens of an ICO, as shown in the picture below:
After clicking the buy button, a small window will pop up where you choose the amount of your ether that you want to invest, and how many tokens of the ICO you can buy with the specified amount as well as the bonus that you will get with that investment.
Cryptonomos lets you buy tokens of an ICO with just one click, providing simultaneous information about the ICO as well as access to the ICO’s whitepaper. Fantastic!
3. Deposit ALL your tokens in your Cryptonomos wallet
If you are adding BTC or ETH to your account, go to the corresponding section of your Cryptonomos account (on top of the screen), copy the wallet address and pay the desired amount.
If you are paying by wire transfer:
1. Go to the USD link at the top of your Cryptonomos account and set the desired deposit amount.
2. Fill in the required fields and generate an invoice.
3. Download the invoice and make a payment.
To purchase tokens, You need to log into your account, decide to buy the WTT tokens, and pay for them with the funds you deposited into your Cryptonomos account.
As you purchase multiple and various tokens, they will all be available in your Cryptonomos wallet, that way you can manage your investments in different ICOs from one single platform. God bless Cryptonomos!
ICO investing used to look like a difficult task that required dedicating a lot of time and energy to. With the new emerging solutions and platforms, you cannot only promote your own ICO and manage it easily and safely, but you can also ensure the management of your investment from a central single platform without being burdened by remembering your different addresses and wallets.