3 Traps That Can Sink Your ICO – and How to Avoid Them

CornerRight 4 min


Icons/Position/Pos. No. 4

Cryptocurrency


Icons/Technology/Tech No.1

AI

In the first quarter of 2018, ICOs have already raised almost 7 billion dollars [Coinschedule.com]. The pie is big, and what’s even more important, it is booming – in half a year we will raise more funds in ICOs than in the whole of 2017.

But you know all that well enough, and the reason you’re here is that your company is seriously considering cutting off a piece of that delicious pie for itself.

We are here to share our experience and make sure you won’t burn your fingers.

If you wish to learn more about the technical details and processes of ICOs, check our recent post:
>> How to launch an ICO project

Now, to the point. What are the biggest issues you have to face?

1. Safety

Preparing your company and website for an ICO

The first IT topic strictly related to your ICO campaign is the website, which falls into your domain as the tech expert.

It can be either neglected or perfectly polished by your marketing team, but in both cases the more important thing for us is a technical background which guarantees safety. We are dealing with financial data here, and people put enormous trust in your brand to take care of their money.

As the tech expert, it is your job to ensure that nobody messes with the data displayed on your website, and the investment process is smooth and secure.

Our pro tips:

  • Avoid content management systems for your website.

They can open your doors to online threats. Even though it often allows your team to work more as the middleman between marketing and the website itself, in the end it’s a fair price to pay to prevent your website from being hacked.

  • Educate your coworkers.

For many small and medium-sized companies, an ICO may be the first project of such a vulnerable nature. You are the one that fully realizes the threats and consequences of possible attacks. It makes you the natural chief security evangelist.

Of course, this can easily turn into a full-time job, and we do not want that. For a start, just make your team aware of the threats, and remind them about security standards, proper passwords policy and not opening those weird attachments.

During the ICO, you will also have to build a web application to allow your investors access to the system as well as to manage the process of buying and selling your cryptocurrency. Bugs and holes in your app code can drown your ICO in no time.

Private key

Your private key is a password to your cryptocurrency account. You will have to use it to allocate tokens to your investors in the final phase of the ICO.

We’ve observed a tendency to store this asset in a rather light-hearted manner, putting it into unverified applications and storing it in insecure places. You do not want to do that – giving up your private key means that you lose control over your account and your money.

That’s why during our ICOs we suggest a process based on the MetaMask Chrome extension, which allows you to avoid unnecessary risks. It gives you more control over your private key, and makes sure it won’t be used to transfer your funds into the wrong wallet.

Phishing

30% of phishing messages get opened by targeted users and 12% of those users click on the malicious attachment or link.
>> Verizon Data Breach Investigations Report

Phishing is a big threat, and you shouldn’t underestimate its power. The most fragile moment to target will be in collecting funds during your ICO – money sent to the wrong crypto account will never find its way back.

In this time, your investors might be getting deceitful emails almost indistinguishable from your own, urging them to take actions which drain their funds and expose them to other t

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