If you’re thinking about taking part in an initial coin offering, it will be vitally important that you fully understand how they work and how to avoid falling prey to scams. Understanding at least the basics will help to develop a deeper comprehension of the ICO process as a whole. Here, we’ll talk about what an ICO is and then discuss how one can take part in one while protecting themselves from common scams. We’ll also discuss a few different, yet proven ways to grow your cryptocurrency wallet.
What is an ICO Token?
To begin, let’s talk a bit about ICO tokens and what they mean to potential investors. ICO tokens differ from cryptocurrencies in that they are technically not currencies at all. This means that they do not require any blockchain. Each cryptocurrency possesses some form of monetary value and thus can be exchanged for some amount of cash money. ICO tokens, on the other hand, carry no set monetary value. What ICO tokens represent is a fixed amount of digital coins that will be received by the holder once the ICO comes to an end.
ICO tokens can be provided in many different formats and we never see two different ICOs assigning the same value to their specific tokens. Where one ICO token may grant you ownership of a portion of the coin once it has launched, another may offer you something else of value, such as shares of the businesses as a whole. ICOs which offer shares provide an excellent path for investors to profit from state-of-the-art technologies upon their initial unveiling. Some tokens may offer compensation in the form of equity or even some type of future credit against a financial loan that is being provided to aid in the launch.
What is most important is that you read completely through any contract that goes along with an ICO purchase. You’ll want to know exactly what you will be receiving in exchange for your purchase and when you will be receiving it. Although you will be promised something in exchange for your investment, you must understand that not all ICO launches are a roaring success and getting rich off your investment is far from guaranteed.
What are Some ICO Alternatives?
If you’re searching for a way to grow your cryptocurrency balance, there are other options. Brokers such as CryptoRocket are now offering crypto trading in an easy, affordable manner. Trading your way to greater profits does require some effort, but many now see the appeal of taking this approach, capitalizing on the often strong price movements seen within the digital asset marketplace. While the process works in the same manner as Forex trading, cryptocurrency value fluctuations are quite different and often times more predictable than those of physical currencies.
Anyone who is interested in trading with a brokerage such as CryptoRocket may do so completely anonymously, never needing to provide any personal or financial information. Thus, the same appeal that surrounds digital assets is carried over into the world of trading. Another perk is the ability to start trading with very little money ($10 or less), as opposed to the much higher costs of getting in on an ICO. Using leverage as high as 1:500, a trader would have the potential to transform a small deposit into a large profit in mere minutes. This outcome does not happen for everyone, of course, but the potential is there.
Aside from trading, there really aren’t many alternative ways to profit off cryptocurrencies. Not safe methods, anyway. This could of course change in the future, as digital assets have completely changed the ways in which we think about money.
How Can I Participate in an ICO?
We’re going to assume now that you have done your homework and are positive that an ICO token purchase is in your best interest.
The next step to participating in an Initial Coin Offering would be to buy the cryptocurrency required to purchase the ICO tokens. If you need to purchase Bitcoin securely, you can do so online at a trusted website. Be sure to ask which cryptocurrencies are accepted for the purchase, but in most cases, this will be either Bitcoin or Etherum.
You will need to have a cryptocurrency wallet to transfer your newly purchased digital coins into. Look for a wallet provider that offers offline storage, providing you with control over your own private key. Once you have your wallet and have purchased your coins, you’ll send your public address. At this point, you’re all set and ready to be included in your chosen ICO.
How Can I Participate in Cryptocurrency Trading?
Should you decide to enter the world of trading either instead of or in addition to participating in various ICOs, there are several things you need to know. For starters, you’ll need to select a broker. The broker will be the one that accepts your deposit, provides you with a platform within which to trade, processes your withdrawal requests, and more. Be sure to choose a trusted brokerage such as CryptoRocket to ensure that you are provided with not only fund security but also optimal trading conditions.
Once you have selected a broker and funded an account, you’ll be ready to start trading. The process works in the exact same manner as FX trading, with trade decisions being based upon how the value of one currency will perform against that of another. The only real difference is that in this case, the chosen asset pairs will involve cryptocurrencies, for example, BTC/USD. If you’re entirely new to trading, consider studying Forex trading prior to getting started. While the basic steps are quite straightforward, one must understand how to analyze the market and make sound decisions prior to trading with actual money.
Avoiding ICO Scams
There are actually several red flags to look for when trading to identify ICO scams. One would be a lackluster website and/or social media profiles. If the website is poorly designed, consider this a warning sign. Even though the purpose of an ICO is to raise funds, there should still be plenty of effort put into designing a professional website to present to potential investors. As for social media, red flags could include the use of stock images and a lack of contact information. Speaking of which, do test any provided contact information to ensure that a response is received and in a timely manner.
Other warning signs include promises of fixed profits and token distribution structures that simply do not add up. There is simply no way to know in advance just how successful an Initial Coin Offering is going to be and because of this, there is no way to be able to promise investors a fixed profit amount. If you’re being offered a specific percentage of the profits, you should be extremely skeptical. Take the time to study the token distribution structure to ensure that it is not illogical and the numbers do add up.
Avoiding Cryptocurrency Trading Scams
Broker scams are as old as brokers themselves. The good news here is that over the years, the number of broker-related scams has decreased tremendously. There are many reasons for this, but the primary reasons for the decrease is an increase in trader education. Knowing which warning signs to look for will protect you from being disappointed when it comes time to withdraw your hard-earned profits.
Some of the red flags that are associated with ICOs also apply with cryptocurrency brokers. A poorly designed website can be considered a red flag, as can a lack of communication on the part of the company’s customer support team. Brokers such as CryptoRocket offer 24/7 live support, allowing their clients to speak with a support agent by phone, live chat, or email at any hour, day or night. This is an excellent sign of broker reliability.
Since small deposit amounts are accepted by brokers such as CryptoRocket, feel free to test the withdrawal process by making a small deposit and then request a withdrawal. This will not only work to provide that your funds are indeed withdrawable, but should also show you what to expect with regards to the withdrawal processing time-frame. When banking with Bitcoin, withdrawal payments should arrive in an hour or less once a withdrawal request has been reviewed, approved, and paid out.
There is no denying the fact that cryptocurrencies provide us with many ways to generate profits. Whether you want to be in on the launch of various new cryptocurrencies, or want to trade on the value of the digital coins that are already in circulation, earning opportunities abound. Do exercise caution though. If there’s one thing that we’ve all learned, it would be that whenever money is involved, scammers are always looking for opportunities to steal it. With just a bit of education and investigation, you will be able to protect yourself from potential problems and benefit from ICO and trade opportunities.
