Walkthrough: Running a colored coins crowdsale

Coinprism lets you run a crowdsale campaign entirely for free, and in a self served manner, with what is often called a “Vending Machine” functionality.

In this post, we will describe the process for creating your own asset, making it verified and getting started with a crowdsale for this new asset.

Prerequisites

Here are the prerequisite to this walkthrough:

  • You need a small amount of Bitcoins on any wallet (0.001 BTC will be more than enough).
  • You need a website, with SSL (HTTPS) enabled. This is required only if you want to get your asset verified.

Step 1: Create a Coinprism wallet

Head to www.coinprism.com/signup and create a wallet. All you need is a username and a password. The email is optional. Make sure you write down your password in a safe place (on a non-digital medium, like a piece of paper, which can’t be hacked) because the password protects your key, and through that password, you are the only one who has access to that key. If the password is lost, the Bitcoins and the assets are lost.

Step1

Make sure your password is long enough to ensure optimal security. Coinprism enforces 10 characters, but 20 characters make it extra-safe.

Step 2: Fund your account

Sign in onto your account with your new credentials. You get onto the home page of your new wallet, which has an empty balance. The first step is to fund it with a small amount of Bitcoins. Select “Receive Bitcoins” on the right of the page. A Bitcoin address should appear.

Step3b

Send 0.001 BTC to that address from your non colored coins wallet (in this case Blockchain.info).

Step4

Wait for a few minutes, and refresh the page from time to time. When the transaction is confirmed, your balance should update to reflect the 0.001 BTC:

Step5b

Step 3: Create the asset

Go to the “Addresses & Colors” tab, and click “New color”.

On the next page, call the new address “Crowdsale address”, and type your password to confirm.

Step6

The next page is where you get to define the information about your asset. Choose a full name and a ticker. The issuer name is the name of your company. The description should explain what your asset is, what gives it value, etc… Don’t hesitate to put all the necessary details. Note that you cause use the Markdown syntax for formatting (including headers, links, bold, etc…).

Step7

In “Asset webpage URL”, put a link to a page on your website giving more information about the asset.

Upload a logo and image for your asset, and finally choose a divisibility and asset type.

Save when you are finished.

Step 4: Upload the asset metadata file on your website

In order to have a verified asset, you need to host the asset metadata file on your own website.

On the same page as you were on step 3, you should see something called the “Resource URL”, which should look like “https://cpr.sm/b0Np1y42yl”.

Copy this address, and open it on your browser in a different tab. You should see a file containing the information you have defined in step 3, in JSON format.

Step8

Save the file on your disk, and open it. You should see a line that says:

Replace the “false” with “true”:

Step9

Save the file and close it.

Now you need to place this file on your website. It doesn’t need to be linked from anywhere on your site, but it needs to be available when the address of the file is typed. In addition, the address needs to be HTTPS. The address can be anything, but should be preferably shorter than 31 characters (including https://). In this example, we’ll host it at “https://littlelemon.co.uk/asset”.

After this is done, verify that the file is correctly hosted by typing the URL in your browser (“https://littlelemon.co.uk/asset” in this case), and you should see the JSON file.

Step13

Write down the address of the file and keep it with you as we will need it in Step 6.

Note that if you don’t have the choice and the address has to be more than 31 characters, use an URL shortener (like goo.gl) to shorten it.

Step 5: Fund your issuance address

Go to the “Send” tab. In the “To address” field, select your “Crowdsale address”.

In the amount, type “0.000106” (the exact amount is important: 0.0001 BTC will be used to pay for the miners fees, and 0.000006 BTC will be used for coloring).

Step10b

Press send, and confirm the transaction on the next page by typing your password and pressing “Submit”.

Step 6: Link your crowdsale address with the asset information

We are now ready to make the first asset issuance, whose purpose is to link on the Blockchain the asset metadata URL (defined in step 4) to the address.

Go to the “Send” tab, and on the left, click on “Issue colored coins”.

Make sure “From address” is set to “Crowdsale address”. In “To address”, select your “Main address”. In the amount, type 0. We are not actually issuing any colored coins, just making a dummy transactions linking the address to the asset.

Leave the default fees.

For “Metadata”, select “Provide a custom color definition URL”. A blank field should appear. Type in that field the address from step 4.

Step11b

Press “Issue coins”, and confirm the transaction by typing your password and pressing “Submit”.

Step 7: Start advertising your crowdsale

You are now ready to accept payments!

Go to the “Addresses & Colors” tab and select your “Crowdsale address”. In the top left, make sure “Receive assets” is selected. Copy the address below (it should start with the character “a”).

Step12b

This address is where people need to send Bitcoins to purchase your asset. Showcase it on your website.

Create some buzz to make sure people know about your project.

Step 8: Process the sales

When people send you Bitcoins to this address, the Bitcoins will stay sitting on the address until you “process the sale”.

To do this, head to the “Send” tab, and click “Crowd sale” on the left.

Select your “Crowdsale address” for the Crowd Sale Address field. In “To address”, select the final destination of the money you raised. Your “Main address” is a good option. You can also use any kind of cold storage if you are dealing with large sums of money.

In “Price per XXX”, type the price in BTC of one unit of your asset. Finally, submit the form. You will be presented with a summary of all the sales before your confirm. The asset will be created dynamically in the exact quantity needed. Change in BTC will be sent back to the buyer if there is any.

A more detailed overview of step 8 is available in this blog post.

In conclusion

This process lets you define a validated asset, create a crowdsale address where you can receive Bitcoin payments, and process them automatically by sending back the asset to people who sent you Bitcoins.

Coinprism lets you do that for free, and in less than 15 minutes. Unlike any other Bitcoin-based platform, this can even process unconfirmed transactions in a perfectly safe way, thanks to atomic transactions.

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  • Jon Scott Boroughs

    Is there any way to make this a totally automatic process where when people send the funds the system auto sends assets?

  • Jon Scott Boroughs

    Is there any way to make this a totally automatic process where when people send the funds the system auto sends assets?