We’ve all seen ads online offering free stuff. “Get your free iPad!”
Of course, there’s often a catch to schemes like this. You have to share your personal information – and let the gift giver share it wherever they will – or sell stuff to your friends.
So 99% of the time I see something free advertised on the internet, I automatically dismiss it. But free crypto is a different matter. Giving away free crypto in “airdrops” can be an excellent way for a new project to gain traction.
For example, in the early days of bitcoin, project leader Gavin Andresen gave away 75,000 bitcoins to users. All people had to do was prove they were a real person by filling out a “CAPTCHA,” and voilà, as many as five bitcoins were sent to their wallets. Today those airdropped coins are worth as much as $45,000 per person.
This early bitcoin giveaway helped the network grow immeasurably. It boosted the “network effect,” a key factor that drives crypto adoption, and also spurred the vital “viral organic growth” that cryptos thrive on.
The ideal cryptocurrency has wide distribution – in other words, a lot of users and holders.
When an “airdrop” of coins or tokens happens, recipients get instant distribution. Some of these people will become champions of the new project. Some will buy more coins or tokens. And a few valuable coders may contribute directly to the software if they believe in the project.
Most importantly (and this is the whole idea behind an airdrop), some of the recipients will tell their friends about it. That can kick off a buying spree if the project seems promising and undervalued.
Others will begin mining and operating a node, which helps process transactions in many coins.
As you can see, airdrops make a lot of sense for crypto projects. And now that initial coin offerings are in legal trouble (particularly in the U.S. and China), airdrops have become a vital distribution mechanism for new coins.
So we’ll be paying a lot more attention to airdrops in the coming months. If you’re interested in getting started immediately, airdropalert.com is a good place to do so. One quick security tip: I recommend using a new email address for your airdrop registrations.
This way you won’t clog up your primary email account with potentially risky emails. It’s possible some of these email lists will be sold, rented or compromised. So, generally speaking, don’t click any links or open any attachments or anything else that you are even slightly suspicious of.
Types of Crypto Airdrops
There are many different types of airdrops. Some require you to own a specific coin. For example, a new token debuting on the Ethereum network (known as an ERC20 token) may choose to distribute a portion of its new tokens to every Ethereum owner. This (and other airdrops) is done through the blockchain in a very efficient fashion.
Other airdrops require registration on the project’s site. Often these projects perform detailed checks on registrants. Most of the time you’ll be added to the newsletter and receive updates.
Sometimes you’ll be required to follow the project’s primary Twitter account or join its Telegram channel (a chat service). This helps the project display better “social media metrics.” It’s a bit manipulative, since not all attendees actually interact or pay attention.
Overall, there’s not a ton of work involved in most airdrops. They do, however, require attention to detail and good security practices. I’m on the lookout for promising airdrops right now, and I’ll let you know as soon as I find any good ones.
