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How to buy your first ICO token

23 august 2017, 13:29

With the tremendous amount of various new projects popping out everyday, trying to revolutionize digital world with their brave new ideas, there is an amazing opportunity to make some decent profit.

'ICO' stands for 'Initial Coin Offering' and is an easy way for developers to obtain funds in order to fully develop their ideas. An investor can acquire a digital token, that will act as a proof of supporting the project. This way the investor not only can feel like an ordinary donor, but also an owner of a product, as these tokens are often used later as a mean of executing the service. They can be used to exchange it for some physical goods or services, to access some part of the project or vote on it's direction and make important decision almost like a share-holder.

But what is the most important; the more popular the project gets, the more valuable these coins become. It's worth to add that the initial price of the coin is often very low and an investor can buy it for as low as few cents, while later on can be worth even thousands of dollars.

In this article, as a part of small ''How to'' series for beginners in ICO investing world, I'd like to focus on the sole process of obtaining these news coins and tokens.

1. Money to invest

First you need to have the money that you want to invest. But your ordinary dollars won't do the trick. In many cases the only way to purchase the tokens is through Bitcoin or Ethereum donations. So head to your favourite cryptocurrency exchange and get some of these coins. Of course it all depends on the project, there are many accepting different coins and also fiat currencies like dollars, but generally Ethereum coin is the most widely accepted.

2. Digital Wallet

Make sure you really have that Bitcoin or Ethereum coins and you are the owner of them. That means, that they are safely stored in YOUR wallet. Don't leave them on the exchange or use exchange address as ''yours''. You need to have them stored in a wallet that you own private keys to. It's very important as you won't be able to prove the donation if you don't own the address from which you will be sending the money.

3. Buying the ICO

Send the amount you wish to invest to the address given by ICO project. The details and address is most probably easy to find on their website, with more detailed instructions and information about how many coins will you get and how usable these coin will be in this project in the future, where does the coin distribution start and their goals and targets. It's very important to read carefully not only instructions on how to buy these coins but it is really important to read and research what they need this money for and what is this project about. Remember, never invest in what you don't know anything about, even if there are many people backing this project already. It's important to make sure it's worth your money.

4. Getting the token

Done! You've just invested in your first project with ICO. Now they will probably be raising these funds for a few more weeks or months and will distribute the coins at the end of this period. It can come in various forms. They may want you to download a dedicated wallet where you will get your own address and they will send these coins to you there. Or it can turn out to be supported and be sent to one of already popular wallets, that you most likely have. It can even have a form of just being an Ethereum smart contract.

But a good ICO investment does not only include buying a random coin and holding it with a hope of profit. It's necessary to properly research your project beforehand. In the next articles we will focus on the process of choosing the ICO, how to spot the worth investing projects and also we will give some tips on how to be careful and not fall into trap of fake ICO scams.

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