The wild west of ICOs can be quiet confusing to beginning investors. This guide aims to help ease the confusion and provide tried and true methods to manage Ethereum Tokens and ICO offerings.
This guide is formatted in a way to read from top to bottom to properly manage your security, Ethereum, and ICO Tokens.
Step 1 – Obtaining Ethereum (ETH)
You need Ethereum. Unless you have managed to get Ethereum for free, Ethereum is best obtained when converted from a FIAT currency, such as USD, EUR, GBP, etc.
Reputable Exchange to Convert FIAT to Ethereum: Coinbase
Now that you have a bit of Ethereum, you’re going to want to secure it. Exchanges are not a safe place for longterm storage of cryptocurrency. In addition, they often don’t the ICO tokens.
Protip: You don’t really need to buy ETH to get started, but it can help familiarize you with the process. Some ICOs have a minimum buy-in and require ETH to do so. Credit cards are high risk of being marked as cash-advances. Starting a ACH transfer to Coinbase now will help keep your money ready to go when you are ready to buy ETH. ACH currently takes about 10-14 days to process.
Step 2 – Securing Your Ethereum
This is one of the most important things you could possibly do. Take great care and don’t fat-thumb anything. With cryptocurrencies, you are your own bank.
Basic Security Measures
We all need to be reminded of the basics from time to time.
- Updates – Always make sure your computer, browser, and antivirus is up to date. In fact, make sure ALL of your programs and apps are always up to date.
- Secure Unique Passwords – I recommend using either KeePass or LastPass. I use a randomly generated unique password or passphrase on every single website or login.
- Multifactor Authentication or 2FA – When dealing with banking, finance, email, and even social media, I enable 2FA for my accounts. All these are methods to phish or hack and gain access to your cryptocurrency. A second layer of security helps prevent something terrible from happening.
- Secure Email – I setup a secondary email address for cryptocurrency. Again, its an additional protective layer to keep potential hackers from accessing my main account and getting ahold of EVERYTHING. I’m actually a bit overboard and have a third email just for questionable or throwaway services.
Data breaches are easy to come by these days. A combination of several emails and a different password
Converting FIAT to ETH
- Secure Banking – I never connect my main bank I use to save and pay bills to any cryptocurrency exchange. Instead, I use a free checking account from an online only bank like Ally. I use mobile deposit to fund my crypto-connected bank and from their send out ACH transfers. I always have control of how much is available and in the worst-case scenario – a hack – I’ll only lose what was made available to fund Coinbase. Yes, the funds are FDIC insured, but I don’t want to have to rely on waiting for that entire process.
Setting Up Your Ethereum Wallet
Your Ethereum Wallet is where you will securely store all of your Ethereum. You can send it out from here and also receive tokens.
- Setup MetaMask in your browser. It is compatible with Chrome, Firefox, and Opera. This extension turns your browser into an Ethereum blockchain browser. You can securely manage identities. Using MetaMask can also help protect you from phishing scams and websites. Watch the video and read the short About section.
- Head over to MyEtherWallet and click View Wallet Info, select MetaMask, then Connect. MyEtherWallet lets you interact with the blockchain and serves as a pretty interface. Read the Getting Started pages to learn how to properly use all of the functions.
Some important things to remind you of:
- Be diligent to keep your private key and password safe. Your private key is sometimes called your mnemonic phrase, keystore file, UTC file, JSON file, or wallet file.
- If lose your private key or password, no one can recover it.
- If you enter your private key on a phishing website, you will have all your funds taken.
Check Your Wallet Token Balances
While you are viewing your Wallet, you will see a right hand column for viewing Token Balances. This is where you can verify ICO balances on your part of the blockchain.