Creating an ICO - How to Create an Initial Coin Offering in 2018
Related exchange:
- ICOs are considered the best cryptocurrency tokens to invest in for low market entry point investors
- Thanks to Ethereum, creating a brand new cryptocurrency for ICO purposes is altogether easy
- The most important thing for ICO developers to remember is that new ICO tokens should always be utility-based
Unless you have been living under a rock for the past year, you can’t have failed to miss the rise of ICOs.
Appealing to startups because of their simplicity, Initial Coin Offerings allow businesses to raise capital, by selling digital currency in advance of bringing products to market.
Binance, the world's fastest-growing cryptocurrency trading platform, was created thanks to ICO fundraising. In like regard, the cryptocurrency IOTA, is itself the product of over $400,000 of successful ICO investment.
How Easy is it to Create an ICO Really?
Given how easy it can be to raise startup capital via an initial coin offering, almost everyone wants a piece of the ICO action. The only question is, could you too raise startup capital by bringing an ICO to market?
Authentic Business Ideas Vs 2018 Business Pipedreams
Creating an ERC-20 token and releasing coins as part of an initial public offering, can help businesses raise investment capital both quickly and easily. What startups need to keep in mind, however, is that investors in 2018, are much more cautious about investing in ICOs than they were in 2017.
How to Appeal to ICO Investors in 2018
ICO scams and startups which failed to materialize after token sales ended, account for over 80% of ICO projects launched in 2017. This being the case, ICOs in 2018, need to offer investors much more than just brief business outlines and buzzword-heavy whitepapers.
- New ICOs need a whitepaper which details not just their business idea, but exactly how they will bring products and services to market
- Businesses need to build out their basic structure prior to an initial public offering
- Any product or service needs to be blockchain based and use digital currency tokens in a genuinely utilitarian capacity
- Businesses need to register trademarks, file for taxes and have a fixed postal address
- Businesses need to have their own website, social media accounts and have a legitimate business plan
- Ideally, business concepts and whitepapers need to be peer-reviewed by a reputable third party
How to Write an ICO Whitepaper
The first step involved with creating an ICO, lies with creating a rock solid ICO whitepaper. What is more, at its most basic, an ICO whitepaper needs to outline what a business sees as a current market problem, and what it believes it can bring to market as a solution to that problem.
How Not to Write an ICO Whitepaper
One of the worst ICO whitepapers to arrive on the cryptocurrency market in recent months was that of Cream Coin:
“CREAMcoin is based on Cream protocol which is based on Bitcoin open source code, a state that deffines correct agreement between the nodes in the network, creating X11 algoritam. With this algoritam, our developers goal is achived in the most possible way to be applied between the nodes, creating most secure valid transactions. The collection of multiple secure transactions in a block, and well order of those blocks — blockchain, in this case modified Bitcoin base altchain, is creating asset or digital property CREAM cryptocurrency.”
Grammar and spelling errors aside, the Cream Coin whitepaper is simply impossible to read. It is filled with improperly used technical jargon and most importantly of all, doesn’t explain what Cream Coin actually does.
Don’t Over Complicate Things
ICO investors don’t want to read overly technical jargon. - At least not at the beginning of a whitepaper. What ICO investors want to know, is what problems a new cryptocurrency solves, and how an Initial Coin Offering plans to solve these.
Introduce Your Development Team and Then go into Technical Specifics
After identifying a problem and surmising how a new startup plans to provide a solution to this problem, ICO whitepapers need to introduce their core development team. What is more, team members should be real people who's identity can be independently verified via places like Github and Facebook.
Why Team Member Transparency is Important
As a rule, scam ICOs never put real names and/or faces to project developers and team members. If they did, developers would be easier to track down and easier to hold accountable for perpetuating the frauds that they do. This being the case, never put your startup reputability in jeopardy by trying to remain anonymous.
Explain How ICO Tokens Will Create Value After an Initial Public Offering is Over
What investors want most of all when buying ICO coins, is an assurance that tokens will increase in value in future. This being the case, the most important component of any whitepaper, is that which explains how ERC-20 tokens will be successfully monetized after a business launches.
Get Your Whitepaper Peer Reviewed
The ultimate key to a successful ICO? - By having blockchain technical specifics and coin monetization strategies peer-reviewed, those launching an initial public offering can significantly increase their chances of fundraising success. This is because having a paper peer-reviewed lets investors know that startups will at least attempt to deliver on what their ICO is promising.
How to Outsource a Whitepaper
Hate writing or simply don’t know where to start with writing a whitepaper?
In 2017, freelance marketplace Fiverr became the go-to place for new ICOs looking for professional whitepapers written on a budget. Sadly, writers on Fiverr are directly responsible for the likes of the aforementioned Cream Coin whitepaper.
Thankfully, it is still possible to outsource whitepaper writing. All that startups launching an ICO need to do, is use more reputable freelance platforms like People Per Hour and/or Writing Bunny. Most importantly of all, ICO teams should only work with writers whom they can communicate with directly. This is important, as startups will need to make sure that key technical terminology is used and explained correctly.
Start Marketing Your ICO - But Don’t Launch or set a Launch Date Just Yet
As a rule, it takes weeks (if not months) to lay the groundwork for a successful ICO. That said, as soon as a startup has a first draft of their whitepaper in hand, it is time to start marketing new coin offerings.
How to Successfully Market an ICO
Traditionally, ICOs have announced intentions to raise funds via places like the Bitcoin Talk forum at bitcointalk.org.
Sadly, Bitcoin Talk is fast becoming a dumping ground for bad ICO ideas and obvious scam coins. This being the case, legitimate ICOs would be wise to steer clear of Bitcoin Talk (and other forums) and focus marketing efforts instead, on more reputable media platforms.
Steemit
Steemit is a blockchain based content creation platform which is free for anyone to publish upon, and which has strong ties to the wider cryptocurrency community.
Medium
Medium is a similar content creation platform to Steemit, albeit not cryptocurrency based and one which charges $5 to $50 for an annual membership.
Youtube & Fame BIt
Youtube has become one of the go-to places for anyone looking for easy to understand ICO reviews. Of course, not everyone has the skills required to make a professional Youtube video. What ICOs can do, however, is use social media influencer platforms like Fame Bit, to hire Youtube influencers who can help them curate and syndicate content.
Key cryptocurrency influencers like Charlie Lee, John McAfee, and Doug Polk, regularly take to Twitter to offer unbiased cryptocurrency news and investment advice. New ICOs, in this case, can help market upcoming coin releases, by commenting on influencer Tweets, and in some cases, by reaching out directly to key cryptocurrency community members.
Social Media
If a business already has a strong social media presence, it will always pay to announce an upcoming ICO to existing Facebook, Twitter, and Linkedin followers.
Invest in a High-Impact Website & Drive Traffic Via a Google PPC Campaign
The first thing investors do when learning about a new ICO is visit ICO websites to acquire more information.
Needless to say, a poorly designed ICO website will only ever work to deter investors. This is why new startups should invest heavily in a well-designed website. Much more importantly, startups should invest in a Google Adwords (or similar) pay per click campaign, in order to help drive traffic to websites by appearing more prominently in search engine results pages.
ICO Websites & Landing Pages Should Feature:
- A highly informative about page
- Downloadable links to ICO whitepapers
- Blogs which are updated daily with relevant news and new ICO development information
- Graphical roadmaps which detail the real-time development of ICO blockchains and business features
- Graphical countdown clocks counting down to ICO release dates
- Links to relevant cryptocurrency news media
- A fully responsive design which makes websites accessible on mobile devices
- ICO coin wallet information and download links
Building Out & Getting to Know Your Own Blockchain
When investing in ICOs, the most important thing which investors look for is a robust coin use case paired with real blockchain technology.
Startup promises that their coins will eventually be regarded as the best cryptocurrency tokens in the world, simply don't cut it anymore. Because of this, new startups need to be able to present at least partially working evidence of the blockchain technology which they plan to use to bring their business to market.
Deciding on Basic Blockchain Functions
At present, blockchain technology is most commonly used to serve three main functions:
ID & Data Authentication
ID and data verification based blockchains (used by the likes of Bitcoin), serve to provide immutable data storage protected by complex cryptography and secure data signatures. This makes ID and data authentication blockchains perfect for decentralized ledgers and tokenized ID verification systems.
Smart Asset Management Blockchains
Completely utility based, smart asset management blockchains help businesses track real world commodities. As a result, smart asset blockchains can be used to track physical business inventory, provide business escrow like services, and create fully decentralized business services.
Smart Contract Based Blockchain Technology
Smart contract based blockchains (like Ethereum), enable transaction triggered execution of blockchain and IT network services. This being the case, smart contract based blockchains can be used to provide everything from cloud-based data storage services to decentralized remote computing services.
Do You Need a Working Blockchain Prior to Launching Your ICO?
As a rule, startups don’t need a fully functional blockchain prior to launching an ICO. ICOs which prove successful, however, are usually those which launch after already laying the basic groundwork for their venture. This is because starting blockchain development prior to launching helps imbue ICO investors with much more confidence.
Creating ICO ERC-20 Compliant Tokens
As surprising as it might sound, the easiest step in launching an ICO involves creating ERC-20 compliant tokens themselves.
For those with even minimal technical know-how, platforms like Ethereum provide pre-made code which can be used to set different token parameters such as ICO coin volumes, token symbols, and ICO token trading prefixes. All that startups need to do (in theory), is download the Ethereum Wallet app and select ‘Deploy New Contract.’ Once this is done, ERC-20 tokens can be created in as little as a few hours.
Key Steps Involved in the Creation of ERC-20 Tokens
Creating a brand new cryptocurrency on Ethereum is easy. What new startups need to keep in mind, however, is that as well as setting things like total coin supply parameters, they will also need to specify how coins will be mined and how coin transactions themselves will be verified. When this is done, Ethereum will then provide coin creators with the cost (in ETH) required to launch tokens, as well as what the cost in Ethereum Gas will be to make transactions possible.
Should You Outsource Creation of Your ICO Token?
While creating ERC-20 tokens in Ethereum is easy, doing so independently isn’t always the best option.
ICO investors know that ERC-20 tokens can be created by almost anyone. This is why as well as benefiting from more professional ERC-20 token development, outsourcing token creation to a reputable authority, will often help lend more legitimacy to ICO projects.
Launching an ICO and Surpassing Fundraising Targets
If all of the above steps are followed, by the time launching an ICO comes around, new startups will have:
- A well-written coin whitepaper which makes it clear why investors should invest in a new ICO
- A fully featured ICO website complete with a project development roadmap
- A strong social media and cryptocurrency community presence
- A transparent and independently verifiable team of developers and business advisors
- Proof of a peer-reviewed business model which is already in active development
- A fully featured ERC-20 token ready for instant purchase and exchange across the Ethereum blockchain
Don’t have all of the above? When launching an ICO, it is imperative to have at least a few thousand social media followers. This being the case, should each of the above criteria not be met, ICO teams may want to postpone launch until they have been.
Top Tips for Raising ICO Awareness
As a rule gauging real ICO investor interest isn’t easy. There are, however, are a few easy marketing hacks which startups can use to help raise their ICO profile.
- ICOs can airdrop (give set amounts of tokens away for free) on set days prior to ICOs officially launching
- ICOs can set up ERC-20 token faucets where limited numbers of coins are issued free of charge to people who complete certain tasks (like playing online games and/or sharing ICO details on Facebook)
- ICOs can invest in press releases and professional online ICO marketing services which will help increase ICO exposure
What Happens When an ICO is Over?
Successfully raising capital to start a new business can leave startups feeling like they are on cloud nine. What startups need to remember, however, is that for ICO investors, buying ICO coins is like buying equity in a new company. Startups themselves subsequently need to keep on communicating with investors via social media, in order to keep them informed in regard to how raised capital is being used to bring businesses to market.
The post-ICO phase is if you like, all about businesses successfully delivering on what was originally laid out in their ICO whitepaper. This being the case, keeping communication lines open with investors, is vital when it comes to maintaining investor confidence and building greater brand awareness in the process.