First you have to know what an ICO is. Initial coin offering is a strategy used by many start up cryptocurrency projects to raise startup Capital. Those who believe in the project’s success get to invest in the project before the launch.
Airdrop is the process of coin distribution of coins to the community/members of the particular project. Some project offer free airdrops for participating in the promotion of the company via social media and referral of other investors.
To participate in the ICO you will need to have the following:
Wallet address (not exchange) e.g. myether wallet, cipherbrowser e.t.c personally I use Cipher for ECR20 tokens.
Some projects have their own wallets and you need to create the wallet on their website.
Personal details: Name, surname, age , gender, email address, residential address
Attachments(KYC): a picture of ID copy/passport, residential address, selfie, selfie holding the ID
Activities: Social media tasks (facebook, telegram, email, medium, bitcointalk or reddit) and some inputs on the ICO project.
Some projects may require fewer details than others.
Benefits:
Certain % off for the first investors (e.g. week 1 may be 50% off; week 2 may be 40% as weeks go by the price goes up).
Free airdrops (some projects offer free number coins per person).
Deeper understanding of the cryptocurrency space and new coins.
Risks:
Scam (investing in a scam coin)
The dump(when majority of the investers sell the coin immediately after the coin launchon exchanges)
How to avoid the risks
Do thorough research of the project before investing your money. Go through the team, white paper and partners. The team social media platforms, team member social media profiles, implementation of the white paper thus far. Only when all checks out and you understand what the project is all about can you invest your money.
To avoid the dump you can either sell before the dump or hodl until the coin price goes up again, but if you believe in the project you would not worry about the dump, you hodl.
Always set Google authentication security feature.
Disclaimer: Please note this are my own recommendations based on my own experiences and I am not a financial advisor.
Let me know what you think and if you have any questions or additions below.
