What would you say if I told you I want to give you free money?
I’ll bet you’d think I was crazy, but you’d also accept.
It’s true you’re not often going to get something for nothing like this, but as you probably already know too, the cryptocurrency environment is quite different from our everyday traditional world. And in cryptocurrency circles, it’s actually pretty easy to get free money.
It’s called an “Airdrop” and it’s become quite popular as a way to fill your cryptocurrency wallet for free.
Cryptocurrency Airdrops: What is an Airdrop Anyway?
The most basic definition of an airdrop is any cryptocurrency that is given for free to users by the development team of the cryptocurrency. There’s more than one way to accomplish an airdrop though, and more than one reason for conducting an airdrop.
The most surprising are airdrops that are conducted without prior warning, where coins simply show up in your wallet without warning. This is usually tied to some other coin you hold, or it could be an airdrop of more of the same coin that’s already in the wallet.
In other cases there are actions you need to take to qualify for the airdrop. These are often related to social media and sharing information about the project that’s conducting the airdrop. Maybe you have to share something on Twitter, or post about the project on Reddit.
Some airdrops might require you to hold a minimum amount of coins, either the same one being airdropped or another one.
Airdrop requirements differ from one to another because there are no rules for airdrops. They’re part of the wild West that is the cryptocurrency environment. Development teams that decide to conduct an airdrop can do it in any way they feel will best suit their needs. This creates some very different types of airdrops.
Cryptocurrency Airdrops: How are Airdropped Coins Created?
Image credits: Virgil Pana
The most common way that airdropped coins gets created is through the hard fork of an existing blockchain that creates an entirely new cryptocurrency. Bitcoin has seen several of these types of airdrops, with the most well known being the fork that created Bitcoin Cash. There have also been similar airdrops for Bitcoin Gold, Super Bitcoin, and Bitcoin Private.
With each of these airdrops holders of Bitcoin when the blockchain fork occurred received an equal amount of the new coin. That turned out to be a pretty good deal for Bitcoin holders when you think that Bitcoin Cash is currently trading above $500, while the other three coins combined are around $35. That means Bitcoin holders have received $535 worth of free coins from airdrops just for holding Bitcoin.
Some development teams have also conducted an airdrop in lieu of an ICO, simply giving away the bulk of the coins, while keeping perhaps 10% or sometimes more to help fund future development of the project.
Cryptocurrency Airdrops: Why Airdrop Coins
It likely sounds insane for a project to give away as much as 95% of its equity, which could be tens of millions of dollars, but if you look deeper you’ll see it can actually make perfect sense in the cryptocurrency environment.
If an airdrop isn’t used, the other most popular method for distributing coins in through an initial coin offering. Lots of projects have used the ICO as a way to distribute their coins.
What many of you may not know is that most ICOs aren’t really all that successful.
I’m sure you’ve heard of the blockbuster ICOs that have raised hundreds of millions of dollars, but what you haven’t heard of are the other projects that fail to reach even tens of millions. Successful ICOs are actually the exception rather than the rule.
That led blockchain developers to come up with an innovative, and some thought crazy, new idea. Why not just give away coins?
The benefit to simply giving away coins is that the projects are able to spread the word much faster, and much further. After all, an ICO rarely sees more than a few hundred, and at most a few thousand, buyers.
By using an airdrop projects can get coins to tens of thousands of people, some of whom will then investigate more deeply, become incredibly excited about the project, and then help to spread the word further still. In the best cases an airdrop can go somewhat viral, and this is the reason that some projects prefer airdrops – that viral nature.
An airdrop has the potential to spread the word about a project to the largest number of people in the quickest manner. Once this happens interest in the coin often rises dramatically, as does price.
One example of a successful airdrop is eBitcoin (EBTC), which was released on September 28, 2017, at $0.03 and traded as high as $1.91 by the end of the year. As of October 2018, the price has fallen back to $0.055, but that’s still double where it was when released a year earlier.
Another example is OmniseGo (OMG), which was airdropped in July 2017 at a value of roughly $0.20 per coin and traded as high as $26.14 and is currently at $3.48 a coin.
Of course, just like ICOs, not all airdrops are so successful, but since they are free there’s nothing really risked when obtaining coins. And if just 1 out of 10 performs well that’s a win.
Because so many newer projects have been using the Ethereum blockchain there are quite a few airdrops that are done with ERC-20 compliant coins. This means an ERC-20 compliant wallet is needed, such as MetaMask, Coinomi or MyEtherWallet. Exchange wallets cannot be used to claim airdrops.
In some cases just having the wallet is enough to receive airdropped coins, but in most cases, you need to take some sort of action to receive coins. This could be posting on social media, or the requirement could simply be the need to own a minimum number of coins to be eligible for the coin drop.
In some ways the most difficult part of airdrops is finding out when they’re happening. Because each project has to announce its own airdrop, and there are different requirements for each you’ll have to do some research to find out about new airdrops.
The BitcoinTalk forum is a good place to find out about airdrops. You can also hear about them from a number of Facebook groups, newsletters and Twitter groups. There are also some websites that collect information about airdrops, such as AirDropAlert.
Cryptocurrency Airdrops: Examples
One ongoing airdrop of an existing coin is from the DeepOnion Project. This is a 100% anonymous and untraceable coin transmitted over the Tor network, and it completed 40 airdrops and has now planned an additional 40 airdrops, one each week for 40 weeks. Currently, the ONION coin is worth $0.3344 each.
Another interesting ongoing airdrop is from the Aelf project. Aelf successfully ended their ICO and reserved 12% of tokens for Marketing and Airdrop in first 3 years to promote the activeness of the community. Earn free ELF tokens by completing daily social media tasks. Withdraw your ELF tokens after 30 days on the platform. The ELF token is currently valued at $0.3555.
If you’ve been around cryptocurrencies for any amount of time you won’t be surprised to hear that there are scammers out there trying to take advantage of the airdrop concept. That means you need to use some common sense and maintain awareness to stay safe when looking for new airdrops to participate in. Below are a few tips that will help you avoid scams and phishing schemes:
1. You probably heard it already, but keep your private keys private. There’s no reason to send your private keys to an airdrop or to anyone at any time for any reason.
2. Airdrops are the free distribution of coins. That means you shouldn’t have to send any money or cryptocurrencies to participate in an airdrop. If an airdrop is asking for money in return just leave it alone.
3. There are many places you can hear about an airdrop, but to verify the validity always check the official channels. That means the project website, or the team’s Telegram channel or Twitter feed, or even the GitHub account. Always be careful when clicking links as there have been several accounts of scammers using a URL that differs from the official website by a single letter or changing to a different tld. Be careful out there and always look for scams.
4. If an airdrop is asking you to download a proprietary wallet, be especially careful. It’s a bit suspicious for a project to require you use their own wallet, and wallet software makes it very easy for a hacker to deliver malware to your computer. And there’s a very good chance that you’d have no idea there was any malware included in the wallet.
Cryptocurrency Airdrops: Conclusion
Airdrops aren’t going to make you wealthy by any means, but they could provide you with a nice amount of small profits for very little work on your part. It’s also a very easy way to add some new coins to your portfolio.
Free coins are quite nice, and if you’re active in collecting airdrops you never know when you might pick up one that soars higher, giving you a few hundred dollars for a few minutes work.
Just remember to stay safe out there and question anything that seems even a bit suspicious.