Airdrops

An airdrop is when a blockchain company gives away tokens to users free of charge. Depending on the company the user can either sign up to receive the free gifts or they can simply be dropped into their account if they use the same blockchain.

What is a Cryptocurrency Airdrop?

A cryptocurrency Airdrop occurs when a blockchain company gives away all or a portion of their new coin supply. Airdrops are free. A blockchain company might choose an Airdrop in order to raise awareness of their project, and/or to gain many new users without the investment of time and capital required for an ICO.

How to Receive an Airdrop

There are many Airdrops that occur each month. Most are not well publicized. Investors who want to get these free coins must do their own research, using sites (like this one) which compile information about upcoming Airdrops.

When a promising upcoming Airdrop is identified, the participant must ensure that they have a digital wallet in which the new coins may be stored. Frequently, the airdrop coin is an ERC20 token (a coin created using the Ethereum platform) or equivalent coin format for a different smart contract blockchain. ERC20 tokens can be received at any Ethereum address, so a multi-currency wallet like MyEtherWallet (which supports all ERC20 tokens) may supply an address to which the Airdrop coins may be sent.

Once this address is provided (as well as any other user information; not common), the user waits for the date of the Airdrop. Once the time arrives, the new coins appear in the user’s destination wallet.

Sometimes owners of one currency (NEO, for example) will receive free Airdrop tokens from new coins that are released on that platform (free Ontology coins Airdropped to NEO holders, for example). Airdrops can only be received from blockchains that conduct ICOs (Ethereum, NEO, Elastos, EOS, among others).

How to Learn About Upcoming Airdrops

Airdrops are common, but not always well publicized. Sites like this one compile information about upcoming ICOs. Interested investors should peruse these resources, then sign up for Airdrops that sound promising.

It is not always necessary to learn about Airdrops in advance. Some smart contract platform tokens (like EOS and ELA) entitle the holder to Airdrops from every new token released on the platform. These are automatically sent to the user’s wallet.

Airdrops vs. the Initial Coin Offering (ICO)

An ICO is a funding model. Investors pay for ICO coins using funds like Bitcoin and Ethereum. Airdrops are not a fundraising model. An Airdrop is the distribution of new cryptocurrencies to investors at no cost. Sometimes users have to sign up for an Airdrop in advance in order to receive coins. In other instances, Airdrops are distributed to users without their prior knowledge.

Successful Cryptocurrency Airdrops

Ontology may be the most successful cryptocurrency Airdrop in history. Ontology is a Chinese blockchain company. Because non-Chinese investors would have been restricted from participating in an Ontology ICO, the company chose the Airdrop model in order to distribute tokens to worldwide investors.

Ontology Airdrop

Users were awarded 1,000 ONT coins for performing simple actions, like signing up for a newsletter. NEO holders received 0.2 free ONT tokens per NEO token owned. Ontology entered markets after the Airdrop and went on to sell for $10+ per coin. Ontology is one of the most popular cryptocurrencies traded today.

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