What is an Airdrop and What You Should Know About It

After the increased popularity of ICOs, airdrops gained in popularity as an alternative method of token distribution.

What is an airdrop?

An Airdrop is a calculated distribution of a new cryptocurrency to wallets of a specific blockchain. 

In order to participate in an airdrop you will need a cryptocurrency wallet that supports the coin you are looking to receive.

After doing so, register to online services that provide accurate and timely information about crypto-related airdrops. You can also sign up to Telegram groups, Twitter accounts, and crypto-related forums. 

Services like these will help you stay informed on upcoming airdrops and provide information on what you need to do to qualify for participation.

Why are Airdrops used?

Coin creators usually create an airdrop to achieve one or more of the following:

  • Increase the popularity of their coin by distributing it to a community of active users
  • Increase the value of their coin through promotion and trading by increasing the demand for their asset
  • Rewards users of a bigger, already existing cryptocurrency (e.g. Tron – BTT airdrop)
  • Get personal information of users (e.g. Blockchain wallet – XLM airdrop)

The first airdrop experiment happened in Iceland, in 2014, when Auroracoin, the “cryptocurrency for Iceland”,  distributed Auroracoins to the country’s citizens in March 2014. The project was soon deemed as a failure but set the stage for future, more successful airdrops. You can learn more about Auroracoin by reading this post.

Ever since those early days, airdrops have occasionally been very successful for new projects. Examples of such projects include BitTorrent, Decred and, of course, Bitcoin Cash.

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