What is a crypto airdrop?
What is a crypto airdrop?
A crypto airdrop is when a blockchain project distributes free tokens or coins to the crypto members of her community.To be a recipient of an crypto airdrop often the only requirement is that you have coins from the relevant blockchain stored in your wallet. Examples of this format of airdrops are Novacoin where you get free $33, Stellar lumens where you get free $25 and Besteex where you can earn up to $1000 for doing simple tasks.
The format of these crypto giveaways is usually like this: At a pre-announced time the project behind the event will take a ”snapshot” of the blockchain, and anyone holding Ether or Bitcoin at that point will receive a certain number of free tokens. This can also be done on other blockchains, but Ethereum and Bitcoin are the most used for this airdrop format.
Currently the most commen crypto airdrops require a few simple social media task. These projects use an airdrop as a marketing campaign. Examples of this format are the ones whose links are given above.
A Hardfork is a less common, but well known way to do an airdrop. At a certain block number a chain Hard fork's into two separate chains. If both chains get miner and community support you now have 2 separate coins! The most famous examples of this are Bitcoin Cash & Ethereum Classic.
How do I get free crypto?
I have published an excellent article on this already, you can read how to get free crypto coins performing simple tasks here. Every airdrop has a different set of rules.Currently most airdrops require retweets on Twitter, usually you need a minimum amount of followers. Make sure you have active social media accounts to be eligible for these free crypto tokens.
Most airdrops of today require to join their Telegram group so make sure to download the Telegram app.
Other possible requirements are:
- Medium
- Youtube
- Slack & Discord
Check your wallets regularly to see if you received surprise airdrops. Platforms like Waves or Komodo have delivered airdrops for Waves or Komodo holders without any announcement.
If you are an investor holding a diverse portfolio of coins you are likely to be receiving more and more free crypto as this concept keeps gaining popularity.
Why do ICO's give away free tokens?
If you're not paying for the product, you are the product. With doing an airdrop the project creates awareness about their ICO or token. It brings people to the project that otherwise would not have owned or heard about it. It could lead to token price appreciation, since people value a token they own higher than a token they don't own. This is called the endowment effect.Airdrops create a community/network of people who own the tokens. If you would list the token distribution after an ICO in a pie graph, a large part of the pie is still owned by the Dev's or project. Another large part is owned by people who joined a pre-sale. And a reasonable part is owned by people who invested in the ICO. An airdrop adds an extra slice to the pie and that slice will have the most people in it.
An airdrop also plants a seed. When you look at Coinmarketcap you will see a list of thousand coins. Just on page one you can see 100 coins listed. However if you have or had a coin that name is still in your brain. The seed is planted and whenever you check Coinmarketcap and scroll down, the name of the free e-Coin will jump out and people will check how it is doing. If they see an article that the free e-Token is doing well or bad, they are more likely to click it if they own it or previously have owned it. It's just like advertising!
Looking forward, possible crypto airdrop developments could be projects starting to gift tokens to users who hold tokens in projects that overlap or have some synergy with their own. We could also see projects encouraging other projects to airdrop to their token owners and receiving some benefit in return. Like we already see happening at the Ethereum, Waves, NXT & Komodo platforms.
Where do I sell my airdrops?
So now you have free crypto, what do you do? Many coins that do airdrops are PRE-ICO or just finished their ICO. This often means it is not traded yet on the bigger exchanges. Some of the popular exchanges are Binance, Coinone, Huobi, BitMEX, KuCoin, Coinexchange.io, Qryptos, Livecoin.net, LiteBit.eu, Cryptopia, Mercatox, etc.
I suggest you make an account at all exchanges listed above so you can easily sell and receive your crypto airdrops.
I hope you receive as many airdrops as possible and that they increase in value over time. Many projects that are now top 40 coins have done airdrops in their early stages, like NEM, DECRED & Ripple. You don't need to immediately sell your free crypto, there is nothing wrong with being a HODLer.
How do I keep my cryptocurrency safe?
The safest way to store your airdrops are hardware & cold storage wallets. These wallets store your coins offline, and therefore protect them from being hacked. There are a number of hardware wallets available. It is recommended you use the Ledger Wallet Nano S or Trezor.Not all cryptocurrency can be stored in hardware wallets. I advise you to store your crypto in wallets where you control your private keys. You don't want your free crypto to be stolen!
To avoid scams there are a few general rules:
- Never give your private keys!
- Use 2 Factor Authentication on your wallets
- Be careful downloading wallets of smaller project, possibly use a Virtual machine.
- Never click on links redirecting to wallets
- Don’t use your main email address to apply for airdrops
- Don’t re-use your passwords when you register on a website
- Don’t send small amounts of crypto to receive your airdrop
Where to Get Reliable Airdrops and Bounties
I have already make a post on this. However, to save your time looking for the entry, here are two sources of reliable airdrops and bounties: Bounty0x and Freecoin Hunt. Follow the links to register now.
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