An increasing number of people are realizing that one of the best ways to get involved in cryptocurrency is by participating in token sales.
However, one barrier stopping people from doing that is being unfamiliar with the token sale process.
At first glance, funding your favorite project via a token sale may seem complicated. However, once you get there, it will be a piece of cake.
This article will show you how to create an ethereum wallet, the steps required to participate in most of the token sales issued on the Ethereum blockchain.
Why do you need a compatible Ethereum wallet?
Most of the token sales are built on the Ethereum blockchain; therefore, you must have an Ether wallet compatible with the ERC20 protocol in order to participate.
To ensure complete control over your assets, you must use a wallet over which you have control over the private keys.
It is not advisable to use a third party portfolio such as your wallet in an exchange or from a company that owns the resources. Having control over your own portfolio is key to properly controlling and moving your resources.
ERC20 compatible wallet
This wallet has been verified to support the Ethereum ERC20 token.
- MyEtherWallet (Online and local browser)
- MetaMask (Firefox and Chrome browser extension)
- Parity (Desktop)
- Jaxx (iPhone and Android)
ERC20 incompatible wallet
Until recently, this Ethereum wallet was known to be incompatible with token sales. Before investing, you have to move your ETH to one of the wallets mentioned above.
How to Make an Ethereum Wallet?
MyEtherWallet is the most convenient Ether wallet. So, it is not surprising that most people use it to store their tokens which are earned through token sales.
It is an online wallet for ethereum, but also provides offline and hardware wallet support, implying that users can generate wallet keys for various Ethereum storage solutions.
That makes it a great all-in-one solution for everyone interested in investing in token sales.
- Please Open MyEther Wallet
You will be greeted by several safety reminders and the option to create a new wallet.
- Create a password
Use a combination of letters, numbers, and symbols to make it as strong as possible. Write it down immediately, and keep it safe again. Then, click “Create a New Wallet.”
- Download and save your keystore file
Do it for safety reasons. As you know, there can never be too many security precautions in cryptocurrency trading. Save your keystore file in a safe location and click continue.
- Save your private key
This may seem like a series of symbols, but your private key and its security are very important. Make sure to back it up and keep it safe. You’ll also need to print hard copies to keep as a paper wallet.
Remember, there is no way to retrieve your forgotten or lost private keys and passwords; Hence, take all the necessary safety precautions suggested by the wallet provider.
- Use your private key or keystore file to open your wallet.
There are many ways to unlock your wallet, but to keep it simple, let’s stick with the files we just got – private keys and keystore files. Choose and paste your private key or upload a keystore file to unlock your wallet.
- Congratulations, you just opened your fully functional Ethereum wallet.
Next time you want to access it, visit: www.myetherwallet.com, click “View Wallet Info” in the top right corner and authorize yourself again. In your wallet you will find the address.
This code serves to identify where the transaction originated, and where the funds should be transferred to. The principle is similar to a bank account number.
All that’s left now is to load your wallet with some Ether. If you already have one, send it to your public address. MyEtherWallet also makes it easy to buy Ether via Coinbase.
Desktop / Mobile Wallet
Desktop or mobile wallets are also popular choices for hot wallets. This is a much better option in terms of security. Desktop wallets are downloaded and installed on one PC or laptop and they can only be accessed from the one device where it was downloaded. While this is a safer alternative to an online wallet, it can still be very inconvenient as you won’t get access to your money unless you are on the device from which you downloaded the wallet. MultiBit and Armory are great examples of desktop wallets.
Mobile wallets are quite convenient to use because all you need to do is download the app onto your phone. MyCelium is a very popular app (for Android and iPhone) that people use for their cell phone wallets, CoPay is also a great choice.
What are public and private keys?
Let’s think about a real world situation before we understand what public and private keys are. Imagine a vending machine. Can anyone and keep their money in the machine, right? However, they cannot take the money because they don’t have the key, they can only put the money into the machine. The only person who can spend money is the owner of the machine who has the keys.
In this example, the vending machine is the public address anyone uses to send you money. You own the machine, and the key he carries is your private key. Using this private key only you can access your money and do whatever you like with it.
The public key is the address that anyone can use to send money to you, while the private key is what you will use to send money to other people. Remember, ONLY you have to know what your private key is, otherwise anyone can use your wallet to send your money to another address.
Under no circumstances should you lose your private key. Let’s put this in super simple terms. If you lose your private key, then you are SCREWED (yes, capital letters have been used to emphasize the gravity of the situation). You must use at least two different techniques to store and store your private key. We will cover these various techniques a little later in this article.