Expert Blog News

“Airdrops” in Cryptocurrency: What is it really about?

Were you able to encounter the term “cryptocurrency airdrop” and thought, what does that mean? It’s not, in any way, close to what you probably have imagined – airplane roaming in the sky or the instrument that was being sent to people who have been trapped in dangerous locations in times of war, crisis, and natural disaster. It’s nothing like those images you picture in your head. In fact, airdrops have a different meaning in the world of cryptocurrencies. There is a distinctive vocabulary that is related to the world of cryptocurrency that continuously develops as the market grows over time. In this article, you will learn everything you need to know about cryptocurrency airdrops.

Definition

In the simplest explanation, airdrop is free coins for certain individuals. Crypto Airdrop can be defined as the free distribution of small amounts of a certain virtual currency tokens to some of the users completely free of charge. It refers to a procedure through which a blockchain project distributes free tokens to community members or distributing new tokens/coins by awarding them in a certain proportion to existing holders of a specific blockchain currency, such as Bitcoin or Ethereum etc.

What are the mechanics of this process?

There are two major ways a creator distributes their tokens: a company will either announce it beforehand to generate buzz, or simply airdrop the coins as a surprise. An established enterprise, more often that not, will usually choose to go the route of the latter rather than the former. Knowing about these events hugely depends on how involved you are with the happenings around the crypto community as there are online forums for the community, and you might encounter people commenting that their wallets have received credits, and none will be the wiser to determine where it originally came from. For start-up enterprises, the favorable route will be publishing the announcement as it generates a community buzz. The goal of carrying out an airdrop is to bootstrap a project. However, there are certain qualifications that has to be met in order to qualify for receiving free coins, and that usually involves performing few tasks that must be completed on or before the release date of the airdrop. The company will then release free tokens for the users who qualify.

Why do free crypto airdrops occur?

Who doesn’t love free coins? I mean, we all know we do. But in case you’re wondering why blockchain-based enterprise are doing this, here’s several reasons why:

Rewarding faithful early investors.

Blockchain-based services such as cryptocurrency exchange, trading platforms, wallet service providers, and more want to reward their early supporters and investors who first invested in their tokens. What’s a better way to reward your customers than by giving free tokens? Free cryptocurrency tokens serve as an incentive and a motivation for customers for continuous support and loyalty. A cryptocurrency exchange platform, Binance, once processed an airdrop of 500 TRX cryptocurrency in 2017 to its account holders. The airdrop took place from the end of October 2017 until the middle of November 2017. One of the qualifications that must be met is for an account holder to have at least 0.003 BTC on top of having processed at least one transaction in the account. Account holders qualify for the free tokens as long as they have at least 0.003 BTC and has completed at least on transaction on their account.

Marketing and hype

This are the most common reason why enterprises carry out airdrops. Airdropping coins/tokens in pursuit of generating leads for further business opportunity expansion. Airdrops are often used by blockchain-based enterprises to collect valuable leads for their business. When you come across an advertisement about airdrop, you will be asked to fill up an online form that contains your information to qualify for the free tokens. The information that has been collected will then serve as a lead database for an organization’s marketing strategies.

Develop awareness about a new cryptocurrency

A new cryptocurrency business often go to this route to create awareness and to get their names out there in public. The cryptocurrency is getting bigger, new cryptocurrencies have a high chance of getting unnoticed if not given the right boost in marketing campaigns. Popularity has a major role in the cryptocurrency’s ecosystem. Over time, there are a lot of people wanting to explore the world of cryptocurrency checking for different options, an airdrop is an effective way to get their attentions. Social media and word of mouth is also an effective way for marketing campaigns that are most commonly seen in social media. Take, for instance, how Bitcoin Cash had succeeded in the market; developers of Bitcoin Cash have carried out an airdrop as a reward for all of its users. The mechanics were, for every Bitcoin cash held in an account of a participant, he or she qualifies for a corresponding amount of Bitcoin Cash as a reward. The results of this marketing campaign made Bitcoin Cash one of the top 10 cryptocurrencies in the market in less than a month.

How to get involved and earn free coins for yourself

One of the most important requirements in order to participate in airdrops are access to information and ownership of a cryptocurrency wallet, where you will receive your free coins. You also need to sign up for online services that would provide you the latest information latest information about cryptocurrency airdrops such as websites, Twitter accounts, Telegram groups, and online forums. AirdropRating.io and MyAirdropSite are two of the several websites where you can get the latest information about upcoming cryptocurrency airdrops and the specific requirements to qualify for each one. Claiming your airdropped free crypto coins/tokens differ from each project, from ownership of a private key and signing your public address with your private keys to simply filling up an online form and signing up. Getting a compatible multicurrency wallet is important in order for you to receive your free coins. With the popularity of cryptocurrencies rising each day, the scams are surrounding and growing, too. When participating in airdrops it is essential to do the due-diligence by going an extra mile while examining the authenticity of an airdrop as some are created and designed to hack the system and steal from users’ wallet.

Advertisements