How To Make Money From Cyptocurrency – Part 1 (Investing in ICOs)

So, the whole world is going crypto and you will be leaving a lot of money on the table if you don’t join the race right away.

It is looking like the best way to increase the value of one’s money in no time lately. For example Bitcoin which happen to be the greatest grandfather of all Crypto currencies is currently sitting at $7,500 (1 BTC = $7,500) as of the time I am writing this post. The same Bitcoin (BTC) was just a little over $700 (1 BTC = $700) this time last year. And the projection is that it will go to at least hit $15,000 – $20,000 by 2020. So, holding as much as possible can simply change your life.

Just as Bitcoin is rising, many other coins are rising along with it. Talk about Ethereum which was more like the No.2… This time last year, it was barely $10, today 1 Ethereum is $299 (1 ETH = $299). There are so many other coins on the rise like that too.

Personally, I have not really been looking too much into it myself until recently when I saw some of my friends making a load of money buying these coins when the price is low and selling as it goes higher.

You may be wondering, what cyptocurrency means, Click here to read about it here on Wikipedia

Even though, we might have missed out on these rushes, it is never too late to get in.

There are several ways to make money from these coins and in this post; we will be going through one of them. There will be 2 more parts to this post where we will be discussing other methods. I will drop a link below for the other parts.

But, the method we will be talking about in this post is “Participating In ICO”.

 ICO simply means Initial Coin Offering.

According to investopedia ICO is an unregulated means by which funds are raised for a new crypto currency venture. This is usually used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks.

ICO is like the easiest methods for companies and individuals to fund their projects and for regular users to invest in projects they see value in. The ICO usually extends over a period of one week or more (these days) a time frame that allow everyone to purchase newly issued tokens using established crypto currencies like Bitcoin (BTC) or Ether (ETH).

When a crypto currency startup firm wants to raise money through an Initial Coin Offering (ICO), it usually creates a plan on a whitepaper which states what the project is about, what need(s) the project will fulfill upon completion, how much money is needed to undertake the venture, how much of the tokens the ICO participants of the project will get, what type of money is accepted, and how long the ICO campaign will run for.
So, the main thing you need to understand here is that, you will be able to buy the coins (initially offered as token) for a very cheap price during the ICOs and then once the coin finally launched in the market (if it is really a good project) you will be able to sell it for a higher price and maybe exchange into bigger cryptos like BTC and ETH.

Let me rephrase, once the ICO has ended, you will be able to transfer and trade the coins (initially tokens) in the various exchanges and people who didn’t participate will be able to buy from the ones you are selling.

The other day, we bought a token (RegalCoin) for around $0.80 and the same coin is now currently going for $63 just after less than 2 Months of its launch on the exchange.

We will be talking about 4 Things.

1. How to spot Available ICOs
2. 5 Steps to Confirm The Authenticity of the ICO (To Avoid Scam)
3. How Much To Invest In A Project and How To Invest.
4. Maximizing Your Earnings On A Project (Referring)

How to Locate an Initial Coin Offering

Anytime I am looking for a project to invest in, I just simply browse ICOAlert.com and TokenMarket.net and see which ones are available. I also recently discovered CoinSchedule. You can save yourself from those stress though and go through my top picks here: ICO List

Checklists for an ICO Project

Already, ICO has become a way for some people to rip other people off quickly and easily because it is not regulated and bitcoin/ethereum payments which are being used to raise these funds are anonymous in nature.

There are so many things that people check, but I personally don’t do too much. Here are the things I check for.

Step 1: Go Through The BitcoinTalk Thread

Every time I see an ICO project, the first place I go to is bitcointalk.org. Bitcointalk is the biggest Crypto currency forum and there are many people over there who knows what a good project is and what a bad one is.

This is what I do, I go to Google and type “site: bitcointalk.org name of coin” without quote and go through their announcement thread.

I normally wait to see as many replies as possible before deciding whether to jump in or not.

Step 2: Checkout The Team

On the ICO website, you will always find a tab for the TEAM. Use Google to find out as much information about everyone from the owner to the technical team and the advisory board members. Check them out on Facebook, LinkedIn and even Google information about them. Confirm the realness of the people involved in the project. Do they have any previous success in similar ventures?

One more thing here, make sure those faces you saw there are actually people who are involved in the project. There was an ICO (from Japan or so) the other day that was using a picture of someone only for the man to claim he knows nothing about the project.

Step 3: Join Their Community

Most ICOs have communities on telegram group and Facebook fan pages. It is always good to check out these places to see what other people who have shown interest or have invested in the project are saying. You will get to see how they are also asking questions and the kind of responses they are getting. You can as well ask your questions there too.

Note: If there are a lot of people in the community, that might be a good sign as well.

Step 4: Confirm The Solidarity Of The Concept

One major thing that affects the value of the coin in the future is the concept. The concept has to be unique and it is also important to be sure such concept is necessary for a crypto project.  Be sure there are no other cryptos already running the same concept.  Carefully examine and evaluate the whitepaper.

Step 5: Confirm When The ICO Is Ending

I want to be sure I have my eye on where the project currently is, but I am more particular about when the ICO will be ended. I don’t want it to be too long.

How Much To Invest In A Project and How To Invest.

You can’t tell how well a coin will perform especially at the ICO stage. It doesn’t matter how great the project looked. In fact, you might still be able to fall victim to scam because scammers will always feature and find their way into your head no matter what.

But what if it is a real coin and one that will grow so high very soon?

So, I will advise you to do the same thing I always do and tell my friends to do too. And I am really going to shout this.

INVEST ONLY WHAT YOU CAN LOSE. SIMPLE.

How to Buy Your Tokens

Most projects accept BTC and ETH. So, for BTC, simply register on localbitcoin.com (or mycelium for a better security) to be able to participate. You can go to Topupgold.com to buy BTC some with Naira.  I use https://www.myetherwallet.com to manage my Ethereum funds.

You can easily and instantly buy BTC and ETH funds from LUNO (it is a bit expensive anyway).

SpectroCoin provide both BTC and ETH and even some other coins like Dash, etc… One cool feature about them is that they offer some sort of debit cards which you can withdraw your funds into to make online payments or withdraw on ATMs.

 Maximizing Your earning On ICO Projects

Some ICOs offers you some extra tokens if you promote them and refer other people to participate. Most of the time, you will be offered some certain percentage of their purchase. This is a cool way to earn more and there is nothing bad there.

Conclusion

Participating in an ICO is highly risky and that is why I have given those suggestions I gave. But from my experience, the more likely way you will lose is if you don’t follow my guidance. If the coin manages to launch, it will most likely surely sell for more than what it was offered as a token – at least it is for the first 2 weeks to 1 month of the launch.

How To Make Money From Cryptocurrencies – Part 2 (Investing In Established Cryptos)

Thanks for reading

Idris Adeleye.

Disclaimer:  I am not a financial expert and I can’t be held responsible for any losses that can or might happened as a result of this post. Invest wisely.