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Ultimate Begginer's Guide - How to invest in ICO and secure your wallet

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  • Ultimate Begginer's Guide - How to invest in ICO and secure your wallet

    Before you invest in any ICO, you should understand ERC20 Token first.
    Most ICOs are using ERC20 Token as a standard token used on Ethereum platform. You can invest in ICO by sending Ether (ETH) from your wallet to the ICO address.

    For new Blockchain projects, ERC20 Token is used to raise funding. Once the projectís main net is ready, we can swap the ERC20 Token that has been bought via ICO with the new coin issued for main net. As an example: EOS Token that has been sold during ICO can be swapped with its new coin when its main net launches. And for Decentralized Apps (Dapps) that are built on top of Ethereum platform, the token being sold can be used to pay for certain product/service of the Dapps.

    Using wallet to store ETH - MyEtherWallet or MetaMask
    You can follow the guideline of using the wallet
    You basically have to purchase ETH from an exchange like Coinbase, and then send it to your wallet address. You can send a small amount first to make sure it is the right address, any mistake in the address will cause your Ether to be lost in the wrong address and you canít get it back.

    Send your ETH to the right address for ICO
    You must not send your ETH from exchange. If you send ETH from an exchange to any ICO, you will not receive your tokens. This is because when you send ETH from an exchange, the exchange sends the transaction from their pool of ETH, not an address specifically linked to you.
    When the ICO smart contract sends the tokens back to the address you paid with, it sends it back to the exchangeís pooled address so you donít receive your tokens. Thatís why you must always send from an address you control, not an exchange address.
    Also, make sure you have enough Ether for Gas, you will be charged a certain amount of Gas every time you transfer Ether (ETH) or any ERC20 Token.

    Please remember to follow all the rules for participate in in the ICO you want to, rules may be different in different projects.

    Secure Wallet Management:
    As suggested by digroske, secure wallet management is very important. However, it may be a bit too involved, so detailed discussion should be placed in another thread. Below is a security checklist to be explored further:
    Choose desktop/smart phone wallets over web wallets if you are NOT sure how they work. This is because non-web wallets don't require you to manage your own private keys (while still storing them in your computer).
    Encrypt your private keys. Most wallets will ask for a password to encrypt them.
    Protect your private keys from hackers by securing their storage. For hot wallets (those connected to the Internet), the storage is your hard disk. For cold wallets e.g., hardware wallets, paper wallets, etc., the storage is the medium you use.
    Keep your computer malware-free. Use strong passwords on anything remotely connected to your wallet storage. Beware of phishing sites. Because security is a chain. One weak link and it is broken.
    Backup your private keys, seed phrases, and even passwords to a safe place. Loss of such items is common.
    Don't easily trust anyone. Scams are everywhere.
    Don't put too many coins in one wallet.
    Only store coins that you are going to use often in hot wallets. Store the rest in cold wallets.

    Btw I read a lot about trading tips and technical analyst on this site Enjoy it ^^
    Last edited by laurencehanlin; 06-26-2019, 08:55 AM.

  • #2
    Thank you so much for the detailed explanation.