What Are ICO Airdrops

During times when there is a crisis, help is normally sent to the affected people in the form of food, medicine, and other supplies. These people might be trapped where they are, making it necessary for the supplies to be sent through the air. The supplies are then dropped from the plane to the ground, where people are. These are known as airdrops. However, when it comes to cryptocurrency, the meaning is different. It does not mean that coins and paper money is dropped from the plane.

Read on to find out what airdrops mean when it comes to cryptocurrency.

Definition

In the cryptocurrency world, an airdrop is when a cryptocurrency company decides to distribute some of their tokens free of charge to users. This money is placed in their wallets. Usually, airdrops are given by crypto projects that are just starting out as a way of helping them to cut down costs. Even established cryptocurrencies can give out free tokens as well.

The History of Airdrops

You can open up your wallet and check your tokens. However, it is best that you use Etherscan to do this instead of opening your wallet directly just to check your balance. Using Etherscan is a lot less risky. Once you get into your wallet, check the row that is at the top. It is named token tracker. If you can see the tracker, then this shows that you have tokens. But if you can’t see a tracker, then it means that you do not have any tokens. This is something that you would have been able to do since the first Ethereum ICO.

If you have an ETH balance, you might have noticed that you have some extra tokens in your account. You might have wondered whether someone made a mistake or randomly just decided to send you some tokens. Well, this was not just a random deposit. Sometimes, the Ethereum team might decide to add a few tokens to all ETH wallet users, to help them spread the word about their wallet.

Well, there are three possible reactions that you might have had when you saw the extra tokens. The first reaction is maybe you ignored it. Or you could have decided to Google, to find answers. Thirdly, you might have decided to talk about the issue with someone else.

If you choose to ignore the issue, then the airdrop won’t achieve its purpose. If you chose to Google it, then you will have learned a lot more about the airdrop and the company. The third reaction is the best. It means that the airdrop achieved its purpose. You have been able to tell other people about the airdrop and spread the word about it. This is at only a small cost to the company (Well, unless the price shoots up greatly).

Airdrops were used well beyond marketing. It turned into a method of increasing value for the coins. For instance, a company would announce when it was going to give airdrops. It would match the number of tokens that you already had in your account. This encouraged investors who didn’t have any coins to buy so that they could get airdrops. And those who already had coins decided to buy more so that they could get more tokens. However, this article is not going to focus on airdrops as a way to pump up coin value. This article will talk more about how you can get free coins and not how you can get coins by buying more coins.

Off late, Facebook barred advertising of ICOs on its network. Therefore, this has left many cryptocurrency projects to turn to airdrops since they can’t use pay per click advertising method. Since this is a consumer-focused product, networking through making the product go viral is a great way to get the word out there about the product. Therefore, this advertising method is based on a strong referral system.

Process Mechanism

There are two kinds of airdrops; the ones that are announced and the ones that come as a surprise to everybody. More established companies usually prefer to announce their airdrops. If you want to know about any airdrops that have happened, then it means that you must be quite involved in the blockchain community. A lot of investors will talk about any airdrops that have happened to them, or they have heard about. So, being a part of such communities is important.

Companies that are just starting up will also prefer to announce their airdrops. This is because they want to create a buzz about their company. These airdrops will be given to any successful person who completes the given set of tasks that the cryptocurrency company has set up. The free tokens will be given on a set date to everyone who met the requirements.

Organized Airdrops

There are companies, such as the Blockchain Education Network, that usually organize events about airdrops. This is to create more awareness about cryptocurrencies. This is a great way to introduce people to the world of cryptos and encourage them to adopt digital currencies.

A lot of companies commonly use airdrops as a way of bootstrapping their operations when they are first starting out. Friedman suggests that this is a way of manipulating monetary policy. However, this is not true. Airdrops are just a way of getting coins into the hands of investors. As more people get to know about the currency and start using it, then it gains value. Usually, these giveaways follow the same format: The project managers of the event will take a snapshot of the blockchain. This will be done on a date that has been announced before. Any investors who have Bitcoins or Ethereum at that time will be given free tokens.

Why Carry Out an Airdrop?

There are so many reasons why it is important to do an airdrop. This ranges from publicizing the new cryptocurrency to popularizing it to rewarding dedicated customers.

• To Reward Loyal Customers

A cryptocurrency exchange, wallets or a trading platform might want to reward its loyal client base. Airdrops can

Be a great way of rewarding these clients. It will encourage them to continue using your services. A good example of this is the way that commercial companies usually reward their faithful clients with discount codes or free vouchers.

A good example of this is what Binance, a cryptocurrency exchange platform, did to rewards their account holders in 2017. They deposited 500 TRX in the accounts of their clients. This took place from 31st October to the middle of November 2017. For a client to qualify, they needed to have a minimum of 0.003 BTC, and they must have at least carried out a single transaction in their account. Any Binance account holder who had an equivalent of 0.003 BTC in any other cryptocurrency format was also qualified to receive the airdrop, if they had done at least one transaction in their account.

• To Generate a Lead Database

One of the main aims of marketing is to generate leads that could potentially be turned into clients. That is why the process of generating leads for an organization is quite important. By using airdrops, companies will be able to capture essential information about people who are interested in their products. Users will be requested to fill out online forms with their details in exchange for free tokens. The leads that are developed this way can further be streamlined and used to retarget these potential clients. Even companies that are not in the blockchain platform can also use this strategy to come up with leads for their companies.

• To Draw Attention to a New Cryptocurrency

There are so many cryptocurrencies that are currently in the market. Without proper marketing and advertising, a new cryptocurrency might go completely unnoticed.  There has to be a lot of buzz and hype about the product for it to gain traction in the market. Investors are always looking for new cryptocurrencies that they can invest in, therefore, if you advertise your company and they get to hear about it, there are chances that they could invest in it if they get to hear that you are doing airdrops.

Organic campaigns and word of mouth marketing can make a huge difference in introducing a new cryptocurrency in the market. This is in addition to social media advertising of airdrops. This can lead to many people gaining interest in the cryptocurrency. This is a great way for cryptos to bootstrap, just the same way Bitcoin Cash did. Bitcoin Cash had an airdrop, where they were rewarding all their users. Bitcoin Cash matched the equivalent of the Bitcoins that any investor had in their account. In less than 30 days, Bitcoin Cash became one of the top 10 cryptocurrencies in the world.

How to Get Airdrops

You need to have a wallet, and you should also be well informed if you want to get airdrops. For this to happen, you should be in the right circles, where any airdrops that are to be made are announced. This means following the right people on Twitter, joining Telegram groups, forums and online websites where such announcements are made. This includes websites such as Airdropaddict and Icodrops.  You will be able to know which companies are carrying out airdrops and what the qualifying criteria are. For instance, FundYourself Now has an airdrop that is currently going on.

You must have a cryptocurrency wallet if you want to deal with cryptocurrency.in any case, your wallet is where the airdrops will be deposited. Ensure that whatever wallet you choose is ERC20 compatible with different currencies since most tokens are ERC20tokens. Be cautious when you are receiving airdrops. Ensure that the airdrops are from credible companies since some hackers might lure you through airdrops, only to gain illegal access to your wallet and steal your private keys.

Be Careful with Scams

There are so many airdrops in the market that you could easily lose focus and try getting into everything as you try to get as much as you can for free.

Here are some guidelines to keep in mind, so that you do not get scammed.

• Do not give out your private keys: If someone wants to know your balance in your wallet, they can use tools like Etherscan. You do not need to give them your private keys for this, so do not disclose your private keys to anyone for whatever purposes.
• Don’t pay for airdrops: It is free to get airdrops, therefore, don’t pay for them. This is whether you are required to have a balance in your wallet first or whether you will just receive it for free, you should never be asked to pay for it at any time. If you are ever asked to part with money for an airdrop, know that you are being conned.
• Confirm from credible sources: Always cross-check the information that you have, to be sure that it is from a credible company. You can check the company’s website or Twitter account. This will minimize chances of you getting scammed.

Conclusion

Always carry out due diligence first before you commit yourself into investing into a new cryptocurrency.  You should understand and support the vision that the company has. Always be on the lookout for any possible scams. Keep in mind that a legitimate company will never ask you to pay for an airdrop or ask for your private information. You can get to get more information about a company through airdrops. After collecting more information about the company, you might even decide to invest more in it. Just be cautious about your data and always secure it.  You should also be cautious about any company that you deal with. Do not just blindly invest in a company that you do not know much about.

And we will emphasize one main point…

Don’t disclose your private key to anyone.