The cryptocurrency airdrop is a process whereby existing holders of a particular cryptocurrency, such as Bitcoin, receive free tokens as a reward.
Simply put, this is a share that aims to promote a specific blockchain. It also rewards loyal customers for ensuring that they continue to subscribe to a particular blockchain platform.
In the cryptocurrency industry, an airdrop is a marketing ploy that entails sending coins or tokens to wallet addresses to boost awareness of the new virtual currency.
Small amounts of new virtual currency are sent to the wallets of active members of the blockchain community for free or exchange for a remote service, such as retweeting a message sent by the company issuing the currency.
TIP: Although you use the two words used in conversation alternately, the airdrop is different from the fork. A fork occurs when the chain splits into two parts, while an Airdrop occurs when coins are placed in an existing wallet.
KEY TIPS
- Cryptocurrency airdrop is a marketing method used by startups in the cryptocurrency space.
- This is about handing over bitcoins or tokens to current cryptocurrency traders’ wallets, either for free or in exchange for a small promotional service.
- Airdrop is intended to raise awareness and increase ownership of coin launches.
Understanding The Cryptocurrency Airdrop
Airdrop is a promotional activity typically run by blockchain-based startups to help kickstart a virtual currency project.
Their goal is to raise more awareness about the crypto project and get more people to trade it when listed on the stock exchange as an Initial Coin Offering (ICO).
How It Works
This practice is relatively new to the crypto market. Therefore, specific rules on the operation have not yet been created.
It could be developed soon, as the project has gained tremendous popularity. Some crypto websites display rules, but most require contacting the developer for details.
The team behind a particular event announces when it will be launched from the airdrop. After a proposed date materializes, the crew that operates the airdrop takes a ‘snapshot’ of the blockchain, enabling holders of the relevant cryptocurrency to receive free electronic tokens.
Most crypto blockchains, especially early-stage ones, prefer to advertise airdrops rather than surprise airdrops, intending to launch their projects.
Why Airdrop?
The primary reason for this practice is to create awareness, especially for the new virtual currency. The world of virtual currencies relies heavily on “hype.”
People are frequently on the lookout for what will be exciting next, and as such, free tokens are an incentive to attract more people to the project.
The next Airdrop announcement creates much-needed news both on social media and in the world of virtual currencies.
Airdrops also encourage projects to acquire a valuable database which is crucial for identifying potential customers.
Some airdrops require customers to fill out multiple forms online. For example, Universa.io airdrop required potential participants to submit their list to Facebook to qualify for the airdrop.
Customers should always beware of fake websites and make sure that they only provide information to official websites.
Additionally, you should never disclose your login details to any airdrop organization.
How To Get Information About Airdrops
Many websites and network platforms have been created to inform users about past, future, and current airdrop. A good example is the warnings regarding Icodrops and Airdrop, which offer relevant advice on upcoming airdrops.
Another way to access information about airdrops is to follow projects that interest you on various social media platforms, and those could be Reddit and Telegram.
Airdrops are typically promoted on the company’s website and cryptocurrency forums, Telegram, and coins or tokens are only sent to current crypto wallet holders, typically those with Bitcoin or Ethereum.
Understanding The Different Types of Airdrops
The word “airdrop” illustrates a distribution event that happens when a cryptocurrency allocates tokens to users for some reason.
For example:
- A distribution event occurs after the ICO goes live. The smart contract for the ICO sends fresh tokens to the existent addresses of the users who participated in the presale. For example, someone buys an Ethereum based ICO; then, on the token drop date, the token is sent to the user’s wallets, then they can ‘add the token’ to their Ethereum wallet.
- After hard fork or creation of a new token resulting in the receipt of “free coins” by existing coin owners, the distribution event, but where the platform used requires a token distribution. For example, a fork in the Ethereum network creates a new token in the Ethereum network or a network of another currency.
- A distribution event in which tokens are given to existing holders as a reward for holding an original cryptocurrency or an incentive for people to keep a cryptocurrency or associated token.
In other words, it could be a giveaway, a distribution event due to the creation of a fork or side chain, a distribution event due to ICO, etc. . It doesn’t matter why the tokens are placed in existing wallets; it only matters what they are.
Given the above, we can say that the term “airdrop” refers to an event in which unaddressed tokens are associated with them, usually due to someone attending the presale (as in the ICO) or holding existing parts (as in some jaws).
However, with the above, the term “airdrop” is sometimes misused to describe distribution events regardless of the specific mechanics (as in the case of some forks which use the term “airdrop” in their PR).
Since there is some connection between how the term is sometimes used (especially considering how it is used on social media) and what the word means in a purer sense, it helps understand the different definitions.
How to Earn Cryptocurrency Airdrops
To qualify for a gift, the recipient may need a minimum amount of cryptocurrency in their wallet. Alternatively, you may need to do a specific task, like posting a piece on a social media forum, linking to a particular member of a blockchain project, or writing a blog.
A legitimate crypto airdrop never requires a capital investment. Its objective is purely promotional. On the flip side, some crypto coins scams involve sending micro amounts of bitcoins or other cryptocurrencies to unsuspecting recipients as part of what’s known as purge fraud.
Users should frequently be on the lookout for unwanted deposits in their crypto wallets.
Is there an ICO?
Basically, ICO airdrop occurs when the company that launches the first (initial) coin offering offers some of its coins for free to those interested in virtual currencies as a marketing ploy. However, sometimes participants may be asked to complete simple tasks.
Pros and Cons of Cryptocurrency Airdrops
Considering the extreme competition among crypto startups, an airdrop attempts to stand out from the crowd.
Some airdrop crypto companies give user alerts and listing services for startups, as well as a variety of marketing services to fine-tune their airdrop. As always, there are good and bad jobs in this field.
Michael J. Casey, chairman of the CoinDesk advisory board and advisor to MIT’s blockchain research initiative, argued in a CoinDesk blog post that some form of marketing is key to crypto success. -change. “Currency is nothing if it is not universally used. And cannot achieve this if people do not make costly efforts to encourage its widespread use,” he wrote.
However, there are also warnings about cryptocurrency airdrops from other players in the industry. For example, Pierre Rochard, founder of Bitcoin Advisory, tweeted a warning that cryptocurrencies could pump and reject schemes. In other words, the owners of cryptocurrency could artificially inflate its value to make quick money.
Rochard tweeted: “Beware of scams like this: 1. Instantly reward tokens for yourself and your friends. 2. Swap prepaid tokens with each other to increase the price. 3. Get investors individuals by “offering” tokens 4. The trade evangelizes the token for you, download “.
The Team Behind Airdrop
Much depends on the virtual currency involved. However, organizations like the Blockchain Education Network hold airdrop events to educate and introduce new people to digital currencies.
Wallets
The essential requirement is that a person must have a relevant virtual currency, such as BTH or ETH, in their e-wallet to participate in the airdrop successfully.
Conclusion
It is often said that in the world of product promotion, knowledge marks the beginning of a customer’s journey. According to psychology experts, you are more likely to buy something you have seen or heard before than you do not know. It is alright to say that cryptocurrency airdrops have used this concept with more success.
