Why Do Crypto Airdrops Happen
Cryptocurrency airdrops distribute free cryptocurrencies or tokens in exchange for minimal effort on the part of the recipients so whats the catch? And why would a new blockchain network with a fledgling cryptocurrency or token send out a portion of its networks native resources for free? To understand the value proposition for airdrop distributors and receivers alike, it helps to understand the underlying structure of a blockchain network.
A blockchain platform is a distributed global infrastructure made up of decentralized nodes that share the responsibility of maintaining the network, verifying new transactions, and keeping a record of the entire blockchain. A network bolsters its security each time a new node is added because it is one more entity keeping record of the blockchain, which gives the blockchain another layer of redundancy and increases overall network participation with respect to consensus and governance. Network participation is generally a good indicator of the level of a networks general security. The more nodes that comprise a , the more difficult that network becomes to attack or compromise.
Why Would Companies Give You Free Crypto Tokens
As previously mentioned, the market for ICOs is incredibly saturated. Its not easy to rise above the noise and gain traction anymore. A crypto airdrop allows an organisation to gain the attention of crypto investors by giving away free coins. It costs organisations very little as their tokens are worth almost nothing at this stage.
How To Send Your Tokens From The Cryptocurrency Airdrop To A Different Wallet / Exchange Like Bittrex Binance Kucoin Etc
After checking if youve received the tokens and adding them to your wallet, the next question is: how to send the tokens to another wallet / exchange? Before doing this, I would recommend you to evaluate the value of the token. If the project is good, you might be better off by holding the token for a few weeks/months more in your MEW wallet. For example, XLM has had an airdrop in the past .
Step 1. Click on Send ETH & Tokens in the upper menu of MyEtherWallet.com. Afterwards, access your MEW wallet.
Step 2. Fill in your deposit address of the token on the exchange, and the amount you want to send . Click on ETH , and select IOST. Fill in a Gas limit, or do not change it. Click on Generate transaction and confirm that the filled in address & amount is correct by clicking on Send Transaction.
Note: it is possible that some exchanges havent listed the token yet. You can look at coinmarketcap.com to see which exchange have listed the token. In the case of IOST, you can look at this page: .
I hope you learned from this tutorial. If youve any question, feel free to DM me on Twitter, CryptoTutor. If youre still looking for a legit cryptocurrency airdrop Telegram group, do not hesitate to join using this link
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Are Crypto Airdrops Worth It
Airdrops are great for both companies that are trying to promote new virtual currency and for recipients, as long as they know how to use them correctly.
For companies, sending out airdrops is a great marketing method. It doesnt cost as much as advertising and can still be enough to spread the word about your enterprise and generate a buzz about your new virtual currency.
There are risks involved. You can give out too many tokens and plummet their value or too few and fail to improve the token spread and adoption. With the right amount, however, this marketing stunt can do wonders for your enterprise.
For most recipients, getting free tokens, especially if you dont have much in your wallet, is a great feeling. In most cases, youll have to do a small task in exchange and the cryptocurrency token might be worth very little. But, there are some examples of real airdrop gems.
Airdrops can be a great source of income if you know how to recognize the right ones. Its crucial to research the projects in question and assess how promising they are in the long run.
What Is A Bounty Airdrop
Bounty airdrops are also a marketing strategy, but potential recipients have to engage in some promotional activity to receive the digital asset.
These activities could include:
- Sharing a post about the blockchain project on Twitter or other social media platforms
- Signing up for the projects email newsletter
- Joining a forum to discuss and participate in the project
It takes a bit more work to get a free token through a bounty airdrop as opposed to a standard airdrop, but the activities usually arent demanding.
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Matryoshka Play With Diminishing Consensus
In fact, after the Adventure Gold airdrop to Loot holders, there was another benefits for Adventure Gold holders. A project called Mercenary Party allowed AGLD token holders to spend AGLD . Cast new TXT NFTs, they look like this:
Although the total number of these NFTs is only 7777, there are not many people who cast them at present, which shows that the consensus obtained by these fork projects is diminishing.
Finally, I would like to remind you that the current mood about Loots fomo is quite serious. Before you know it, dont take part in this kind of game lightly.
Source link: www.8btc.com
Disclaimer: As a blockchain information platform, the articles published on this site only represent the authors personal views, and have nothing to do with the position of ChainNews. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.
How To Use Cryptocurrency Airdrops In Your Country
Of course, cryptocurrency airdrops will only be eligible in your country if cryptocurrencies are permitted by your governments legislation. Some countries are more liberal than others when it comes to cryptocurrency. For instance, Russia wholly prohibits the use of cryptocurrencies and crypto exchanges within its borders. However, in Asia, Japan has declared Bitcoin as legal tender for various goods and services.
Be sure to check that the buying and storage of cryptocurrencies is permissible in your country before signing up to any airdrops and crypto wallets.
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How To Keep Your New Crypto Safe
First of all, you need a wallet, to be able to receive, hold, and send the newly minted crypto. While you can find many web-based wallets, a.k.a. hot wallets, we recommend you to use a hardware wallet. Trezor is the original and most secure cold wallet. And its compatible with most tokens!
And you must keep secret your private keys to your coins and tokens. Otherwise, theyre not yours. Period. While you can share your crypto address, you must never share your private key! If you do, you can say goodbye to your coins.
Finally, remember that this is your best airdrop alert website! So dont forget to register for our newsletter above, or to subscribe to our Telegram channel, our , or our . And you wont miss a single airdrop crypto!
Are Crypto Airdrops Safe
Some users have also fallen victim to fraudulent airdrops in the past. During the ICO craze of 2017 and 2018, there were many fake crypto startups that were actually frauds.
Amid an industry with much more hype than regulation, some savvy scammers devised a way to attract investment funds without actually creating anything. They would create a coin or say they were planning on creating a coin, and then claim to have plans to airdrop crypto.
Sometimes the companies would require small fees to be eligible for the alleged airdrop, or other speculators would make investments believing that the airdrop itself would lead to a successful project.
While these types of scams might be less common today than they were three or four years ago, investors would still do well to be wary when it comes to crypto airdrops.
Looking at the idea of safe from another perspective, few would argue that the coins received in an airdrop could be considered a safe investment. Altcoins in general can be highly speculative, and that goes double for any new coin that has been airdropped.
As we saw in the Auroracoin example, airdropped crypto can lose nearly all of its value.
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How To Be Eligible For Crypto Airdrops
To be eligible for a crypto airdrop, you might be required to hold a certain token in your wallet or have a specific minimum balance. For example, people holding TRON will keep getting BitTorrent BTT crypto airdrops until 2025.
Alternatively, users may have to complete specific tasks in exchange for a crypto airdrop, such as posting about this new crypto on their social media pages.
The Best Airdrops 2021
Were trying our best to filter scams. But you should also do your part! Here are a few rules wed recommend you to follow to stay out of trouble:
- Do not share your private keys NEVER
- Avoid downloading exotic wallets and using wallet addresses from exchanges
- Enable 2FA when possible
- Create a dedicated email address to claim your tokens
- Do not use the same password on each platform
- Never send crypto to receive more crypto
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What Are Cryptocurrency Airdrops
Cryptocurrency airdrops are crypto coins that are distributed to users for free. This is usually part of an initial coin offering or token sale of an early-stage launch into the cryptocurrency scene. Airdrops see crypto tokens distributed in specified proportions to existing owners of cryptocurrencies like Bitcoin, Ethereum and Chinese crypto, NEO. They are an effective form of marketing, which capture the interest and imagination of investors that would otherwise have turned a blind eye to new ICOs. There are literally dozens of new ICOs appearing on the horizon every month and exclusive airdrops help to differentiate new blockchain projects from the crowd.
Even well-established cryptocurrencies perform holder airdrops from time to time. One of the most common airdrops youll find is when hard forks are created. When Bitcoin forked to Bitcoin Cash, those who had previously opted to buy Bitcoin were granted with an equivalent amount of Bitcoin Cash.
How To Get Started With Cryptocurrency Airdrops
Obviously, the first task to get started with crypto airdrops is locating them. In years gone by, those looking to claim crypto airdrops would have to keep their ear to the ground within the cryptocurrency community and liaise with industry insiders. However, there are many dedicated websites for airdrops, as well as social media accounts that monitor and announce daily updates on new airdrops. Telegram and Twitter appear to be the best places to find out about new airdrops. Telegram is a chat application akin to WhatsApp, while Twitter needs no introduction but is hugely effective at aggregating sources within the crypto industry.
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What Does Crypto Airdrop Mean
The company issues airdrops to current holders of blockchain wallets. Bitcoin or Ethereum is the common blockchain wallet. Due to this reason, they are always present on the agencys website and cryptocurrency communities. There was a time when airdrops were a part of an absurd kind of guerrilla marketing. However, this strategy has exploded in prominence in the cryptocurrency world since 2018. Many projects used this strategy to encourage community participation. This also boosts the adoption and rewards their dedicated clients.
Gradually, airdrops grew into a strategy that was more than just marketing to enhance the value of a currency. Currencies would declare airdrops. When token owners get additional coins equivalent to the number of overall tokens they own. Token investors who chose to participate in this airdrop strategy would need to buy the tokens if they did not already have any. Investors can also buy more if they desire a more significant stake.
Airdrops That Take Place Alongside Hard Forks
One of the most common scenarios in which an airdrop is likely to take place is a hard fork of a major cryptocurrency. More than 20 bitcoin hard forks have taken place in the past year, for instance, and some of these resulted in investors who previously held bitcoin receiving new tokens for simply maintaining their investments. EtherZero, LitecoinCash, and MoneroV were projects that caused a similar level of investor sensation in recent months. In each of these cases, though, time showed that the forked coin was far less important than the original, and the new altcoin eventually lost interest and value.
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Why Is The Us Sec Unimpressed With Cryptocurrency Airdrops
The American Securities and Exchange Commission has made a recent ruling which may put paid to the future of cryptocurrency airdrops. The SEC recently deemed free tokens, dished out as part of cryptocurrency marketing techniques, as securities. It is anticipated that the US SEC will take a similar view to airdrops and bounty campaigns as they have towards ICOs.
Are Crypto Airdrops Similar To Initial Coin Offerings
An initial coin offering isnt the same as a crypto airdrop, since the former is, in fact, crowdfunding for upcoming crypto.
In an initial coin offering, the developers launch a white paper of the project that explains how it will work and the number of tokens that will be mined. Then, they give investors a reduced price for tokens if they purchase them earlier on in the campaign.
On the other hand, in crypto airdrops, developers actually give away free tokens to raise awareness about their projects.
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How To Participate In Airdrop
Although airdrops are free, you will need a few things to participate. Here is what you need to get started with airdrops:
How To Participate In Crypto Airdrop
The format of these crypto giveaways is usually like this: At a pre-announced time the project behind the event will take a snapshot of the blockchain, anyone holding Ethereum or Bitcoin at that point will receive a certain number of free e-tokens. This can also be done on other blockchains, but Ethereum and Bitcoin are the most used for this airdrop format.
Other airdrops require social media posts or you need to contact a member of the team on the Bitcointalk forum. This form is gaining more popularity since September 2017.
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Tax Considerations For Crypto Airdrops
What is a Crypto Airdrop?
For new cryptocurrency, it can be difficult to convince consumers to use or purchase a coin in its early stages. With no publicity, followers, or trading volume, new projects need to find innovative ways to market the currency in order to reach the consumers. Airdrops is one common tool to do this.
One way to promote coins and increase uptake is through airdrops, where a consumer receives free coins or tokens airdropped into their crypto wallet. Blockchain based projects like to use airdropping as a marketing tool to promote awareness and engage consumers, helping build the early value in their token and increasing the overall supply.
An airdrop involves sending a small amount of a new coin to targeted members of a selected blockchain platform. To qualify, the wallet holder may need to hold a minimum amount of a certain coin and they may even be given multiple Airdrops if their wallet remains above a minimum balance for a sustained period. Some Airdrops may require the receiver to perform a task, such as a social media post, to qualify for the crypto drop.
Airdrops have the potential to provide real value to a consumer. In 2020, Uniswap released a native coin, UNI, by dropping it into the accounts of all users on its platform that had made at least 1 trade prior to a certain date. The coin initially traded for between $2-$4 USD before rising to $30USD in April 2020, netting those who had received the airdropped tokens $12,000 USD.