A bitcoin airdrop occurs when a new cryptocurrency project distributes cryptocurrency to new members for free or in return for completing a basic action such as publishing a social media post. This approach gained popularity during the 2017 and 2018 (ICO) initial coin offering mania. Numerous cryptocurrency startups employed airdrops to advertise their initial coin offerings and generate excitement for their new digital currency.
Along with ordinary currencies, governance tokens are sometimes airdropped, allowing early adopters a greater voice in how a project develops in the future.
For users, the attraction is straightforward: Crypto airdrops enable anyone to get tokens without the need to purchase cryptocurrency. And the upside to businesses is obvious: individuals who would not have heard about the initiative otherwise may become investors or, at the very minimum, contribute free publicity for the firm.
What Are the Various Forms of Airdrops?
Airdrops may take place in a variety of ways. The word is most often utilized to refer to free tokens placed into a user’s wallet in return for nothing but providing an email address upon registration. However, this is not the only sort of cryptocurrency airdrop.
This is the form of airdrop discussed above, in which users get free tokens in exchange for subscribing to a newsletter or similar service.
Airdrop of Bounty
Users must complete a basic activity to acquire the airdropped tokens. This is often accomplished by retweeting anything related to the project, publishing an Instagram post & adding a few friends, and starting a Telegram group.
This form of airdrop is reserved for those who have a demonstrated history with a certain project, site, or community. For instance, Uniswap rewarded its most devoted users with 2500 UNI coins in September 2020. This amounted to around $1,200 at the moment, & there were no conditions.
Hard Fork Airdrop
This is a little unique. When a currency’s blockchain is hard forked, a new coin is generated, and holders of the original coin get an equal number of the new coins in their respective wallets. The most well-known illustration of this is the 2017 (BCH) Bitcoin Cash hard fork, in which Bitcoin users that held BTC automatically got an equivalent amount of BCH.
Similar to hard forks, these airdrops reward users who already own particular tokens with fresh ones. For example, EOS and Ethereum have sometimes given users free coins when a proposed initiative was launched on one of its blockchains. Are not hard forked of the original currencies, but new projects placed on top of an EOS and also Ethereum blockchains.
All of these airdrops have 1 thing in common: they all involve the release of new currency.
How Do I Receive Cryptocurrency Airdrops?
The simplest method of locating crypto airdrops is to just Google “crypto airdrops” or “what is a crypto airdrop.”
Because these events are geared toward marketing & project promotion, they make themselves quite simple to locate. There are also websites dedicated just to listing impending airdrops, such as Coin Airdrops.
Scams, on the other hand, exist in the cryptocurrency realm, and users would be wise to secure their information in any way feasible. While looking for airdrops, it is possible to come across someone who claims to give an airdrop but is conducting a phishing effort.
If a claimed airdrop requests information such as your website and bank account login credentials, the personal keys to either an online currency wallet, or other sensitive information, it may be a hoax. Requests to download “special” software or clicking on links in emails may also be phishing efforts to infect your computer with malware or steal important information.
Is the Effort Even Worthwhile?
Given the fact that airdrops deliver something for free, some may argue that they are worthwhile.
Simultaneously, when the latest venture chooses to airdrop cryptocurrency, this results in a supply glut, which might cause prices to crash later. Because a large number of users get coins, many of them cash at the first chance. It is fairly rare for coins that have been airdropped to lose the majority, if not all, of their prices over time.
A nice illustration of this is the (AUR) Auroracoin airdrop. In March 2014, AUR was approved as a cryptocurrency for Icelandic nationals. All citizens were able to register for a free payment of 31.8 AUR and was about $380 at the time.
At the time of writing, one AUR was around $0.10, implying that the 2014 airdrop would’ve been worth less than $3 in 2021. Auroracoin is also only available on two minor cryptocurrency exchanges, showing that there is minimal liquidity in the marketplace and that holders may have difficulty selling.
This highlights the extent to which airdropped coins may depreciate to the point of being almost worthless over time.