Everything You Need to Know About CryptoCurrency Airdrops

Free stuff is great right? But whenever you get something for free you always wonder “What’s the catch?” That’s because we know that you rarely get something for nothing, and that anything which seems too good to be true usually is.

Well in the cryptocurrency world the traditional rules rarely apply, and the creators of new tokens and coins have found a way to challenge the idea that free stuff always comes with a catch with a little trick of their own and it’s called an “Airdrop”.

In the most simple terms an airdrop is nothing more than free coins that are given away by the development team. There are many ways that this is done. In some cases the coins simply show up without warning in your wallet.

In other cases there are requirements that need to be met to get the airdropped coins. Perhaps it requires signing up for the development team’s Telegram channel and following or interacting with them there. It could require you to promote the coin on Twitter in some way, or on another social media site.

You may have to hold a certain amount of another coin in your wallet to receive the airdropped coins. There are any number of requirements and they differ from one airdrop to another, because in the wild west of cryptocurrencies there are no rules.

The development teams make up their own rules as they go along, deciding what requirements best suit their needs before distributing free coins.

In that case every bitcoin holder received an equal amount of bitcoin cash when the fork occurred. With bitcoin cash currently trading right around $1,000 that’s a pretty nice “freebie”!

You probably think it sounds crazy for development teams to give away up to 95% of the equity in their projects for free, but it actually makes very good sense.

The other way to distribute coins is through an initial coin offering. If you’ve been following cryptocurrencies for any length of time you know that some ICOs have been wildly successful, raising hundreds of millions of dollars. But those are the exception rather than the rule. Most ICOs are nowhere near that successful.

So, a new idea was formed. What if new projects simply gave away their coins?

The result is that they are able to spread the news about their project much further — ICOs typically don’t see more than 30 or 40,000 buyers. And they get people interested in learning more about the project, and in some cases they become so excited they begin to spread the word to their friends, turning the airdrop and the project into a viral phenomenon.

That’s really the reason airdrops are done. To spread the word about a project to the largest number of users, in hopes that they will spread the word further, generating massive interest in the project, and eventually causing the price of the airdropped token to rise dramatically.

Of course not all airdropped coins perform so well, but they’re free so even if only 5% of them grow like this you’ve made a nice profit.

It isn’t likely you’ll get rich with airdrops, but it can be a quick and easy way to add some new token to your portfolio and make some small profits.

They’re free after all. And if you’re getting in on as many as possible maybe, just maybe, you get lucky and pick up some coins that will perform well in the long run.

Featured Image via Fotolia

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