All You Need To Know About Airdrops

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In this article, I will explain what is an airdrop. How they are used in the cryptocurrency space, the benefits that crypto airdrops can give you and some additional sites that are worth checking out regarding airdrops.

What is an Airdrop?

What are airdrops - crypto rewards

In their most basic form, when a company decides to give their users free money in the form of their company’s cryptocurrency, they are conducting an Airdrop.  

Airdrops are becoming more common as new cryptocurrencies appear.

There’s even a token airdrop giveaway every month on the airdrop program’s main website.

Like the beginning of Bitcoin, sometimes cryptocurrencies are valued at nothing, and they’re still given away as tokens. But what is $0 today might increase tomorrow?

In the world stocks, trading, and now cryptocurrencies, if you receive something for free that can rise in value, you’re going to keep it.

Those who are airdropped tokens can check their digital wallets and watch the value of their new tokens grow and fall. They will be invested in the success of the cryptocurrency and keep tabs on how it’s doing.

Even though the currencies are not tied to a single country, that didn’t stop nations from using them.

The government of Iceland conducted the first-ever airdrop. They wanted their citizens to experiment with a countrywide digital currency. This is the Auroracoin.

So, they gave it away for free if the residence registered themselves on the website. This was in 2014, and since then, airdropping tokens have risen in popularity.

What are the benefits of using airdrops?

Benefits of crypto airdrops

1 ) First, as we discussed above, airdrops can be a great way to reward users for their loyalty and increase their trust in a brand new system

Free tokens can improve how a company is seen by its users and by the cryptocurrency public in general.

Think of Chick-fil-A, it is a (US-based) fast food joint that makes excellent food, but that’s not all it does.

Their customer service is impeccable, and they continuously work to create a positive customer experience for everyone who walks through their doors and drives in their drive-thrus.

Because of all their goodwill from their customers, they get a lot of free PR from people online talking about their delicious food. Tokens are like the fantastic customer service of cryptocurrency.

2 ) Airdrops that are well-publicized can increase awareness of the new cryptocurrency and spark the interest of potential new users

Since the invention of Bitcoin and the success of Ethereum, there has been a massive flood of brand new cryptocurrencies, all trying to get a piece of the futuristic currency pie.

Many ICOs have trouble distinguishing themselves from every other company out there. But now airdrops have a way to catch a trader’s eye.

Imagine having a digital wallet, and, out of nowhere, the free cryptocurrency appears like magic.

3 ) AIrdropping tokens to users can prevent someone with deep pockets buying all of the tokens and then holding the ICO hostage

Much like stocks, if a single person owns a lot of an ICO’s tokens, they now have a voice in how your ICO is run.

Plus, when or if they decide to sell off a large portion of their tokens, the price of your ICO tokens can drop dramatically from a single sale.

Imagine having an individual sale from one person impacting the future of an ICO for years. Airdropping tokens to users can prevent a takeover.

4 ) ICOs can lure in current and potential users by paying them tokens in order to get their information

One of the biggest issues in the digital marketing world is gathering data on the audience that a company wishes to market too.

But when has a corporation like McDonald’s or Apple has ever told their target audience, “Give us these key data points, and we will give you some money.”

It’s an equal exchange. The crypto company receives valid, trustworthy information about its users, and the users received cryptocurrency. 

Great ways ICOs have used airdrops

Polymath Network website screenshot

In the past six years, since airdrops have come out, there have been a number of extremely successful airdrops giveaways.

For starters, the platform Polymath gave away nearly 10 million tokens to 40000 e-wallets.

This airdrop giveaway was conducted for early adopters after two different anti-bot tests. Each person was given 250 Poly tokens.

This airdrop event happened in January of 2018 when the price of their token was around $0.97 as of 2020. Unfortunately, there tokens only worth $0.04

Another massive giveaway was conducted by eBitcoin on September 29th, 2017. This company gave away nearly 20 million tokens, which were valued at $0.03 at the time (learn more about eBitcoin eBTC airdrop).

Now, the market price of their cryptocurrency is $0.14.

Finally, we will talk about Hydro airdrop.

In September 2018, this company airdropped a massive 2.6 billion tokens to the first 25,000 people that participated in the drop.

This means that every user got at least two or more than 200,000 tokens. It was valued at less than 1 penny. In fact, it was $0.0033 cents.

However, it only rose up for a short amount of time and then came crashing back down again. It is now $0.000196, which means that every person’s airdrop has a value of less than $50.

Are there any risks with airdrops?

Scam money

Ok, so now I’ve explained what airdrops are and the benefits of them.

But are there any risks to them?

Can they be harmful for you?

I think there could be a couple of risks with airdrops as I see it.

1 ) It could be a scam

And the sole purpose of the airdrop could be to extort you of your funds, steal your personal data or in some other way commit something illegal or fraud.

So be careful before giving up your personal data, or send any funds to an airdrop that in return promises you higher returns.

2 ) Never give away your private keys

If there are requirements from the people behind the airdrop that you need to give away your private keys to your cryptocurrency wallets then stay clear.

3 ) Some airdrops are just spam

Some airdrops have turned out to be nothing but spam. Sending out tokens to a big groups of addresses. Often these tokens are worthless and now they sit in our wallets with no way of removing them.

Or it could be a spam effort where the tokens have some value but you need to pay a small amount to get that value. This is just another scam effort.

Useful sites to keep track of regarding airdrops

  1. Airdrops.io – Keep track of future airdrops here
  2. Airdrop Bob – Same, keep track of future airdrops here

Conclusion

Airdrops is the term for when a cryptocurrency company or ICO gives out free tokens of their cryptocurrency to users.

The first successful airdrop was in 2014 by the government of Iceland.

There are plenty of reasons why a company would do this: to prevent take over a single purchase, to reward loyal customers, to attract new customers, and as an incentive to make people do what they want.

Other popular guides:

  1. What is a cryptocurrency?
  2. Cryptocurrency mining explained
  3. Market volatility explained
  4. How 2FA works

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