What is an Airdrop in Term of Cryptocurrency?
An airdrop in the world of cryptocurrency is a marketing strategy used by companies with blockchain-based projects. Simply put, companies give away ‘free’ coins to people. More often than none, there are some caveats involved before an individual can claim those ‘free’ coins. A cryptocurrency exchange, for example, may require that a participant or claimer holds another coin or the coin getting airdrop for a specific amount of time before eligible.
A real example of an airdrop may go like this: Anyone who currently has Bitcoin on Binance exchange between September 12-15, 2019 will automatically receive an equal amount of Ripple (XRP). The idea here is to promote Bitcoin. The price of bitcoin will drastically increase between September 12-15 because a lot of people will rush to buy Bitcoin in order to get free Ripple. Do you see how it can be a win-win for the airdrop participant and the company doing the airdrop?
Airdrops are often used during an ICO period. Another use case can go like this: Anyone who participates in the ICO between August 5-7 gets an equal amount of ICO tokens purchased. This formula is known as a 1:1 match.
Blockchain projects have been using airdrop since the release of Ethereum; Bitcoin’s little brother. You may notice from time to time a few unknown tokens on your Ethereum wallet if you have one. Some projects will drop a few of their tokens in your wallet without your permission (available to the public via Etherscan) as a way to get you to check out their projects.
Airdrops have become a method used for more than just marketing of a blockchain project. Since the majority of the marketing giants like Facebook, Google, Twitter banned Initial Coin Offering (ICO), Security Token Offering (STO), Initial Exchange Offering (IEO), airdrops have been utilized as an alternative method; literally replacing pay-per-click advertisement most traditional businesses enjoy. Basically, projects owners drop a few coins in your wallet in hope you will spread the word.
How to Participate in Cryptocurrency Project Airdrops
There are a few requirements that need to be met before an individual can participate in an airdrop. You typically need the follow:
1. An Ethereum Wallet: This wallet is not like the one you create on an exchange. The wallet has to be ERC20 compatible because most of the projects conducting tokens airdrops are Ethereum-based. There are two popular online & desktop ERC20 wallets that are highly recommended to receive airdrop tokens: MetaMask or MyEtherWallet. After securing your free tokens, I strongly recommend transferring the to a hard wallet like the Ledger Nano S.
2. A Telegram Account (https://telegram.org/): Telegram is the tool of choice for all projects. Most of these airdrop projects will require you to follow their Telegram profile in order to qualify to receive airdrop tokens.
3. A Twitter Account (https://twitter.com/): Twitter is another popular communication medium for blockchain projects. Most will require you follow them on Twitter to participate.
4. An Email Address: This is a must. The projects want to keep their participant updated with the projects and email out promotional emails. When a project decides to do an airdrop, usually there are bigger motives behind them; usually, the token sales. Having the ability to reach via email is essential.
How to Claim & Withdraw your Free Airdrop Tokens
Want to get free airdrop tokens from the best airdrops? Join Earn. They have partnered with the top/best ICOs, STOs, IEOs to drop tokens to members. Plus, you get and additional $1 for each airdrop you take part in.
Most airdrop campaigns do not distribute the tokens right away. The airdrops usually occur during or before the token sales. As a result, distribution may take up to 3 months. Remember, the main goal of the airdrop is to beat the publicity drum and spread awareness. Time is of the essence.
You should, however, check your wallets often to see if you have any airdrop tokens. Some projects will airdrop the tokens to your ethereum wallet, but you have to follow some steps to claim them.
Simplly go to Etherscan (https://www.etherscan.io), enter your ETH address into the search box as shown below:
That red circle is where you need to fixate your eyes. If you have any tokens airdropped into your wallet already, they will show up after you click on the “Token Tracker” dropdown. If you don’t see anything there, it means you have not received any tokens or they’re still processing.
Beware of Token Airdrop Scammers
Scammers have no boundary. Airdrops have seen their shares of scammers all over the world. Anytime someone or a company is offering something for free, some scammers will look for loophole to take advantage.
Here’s some stuff you can do to avoid falling into the trap of scammers:
1. NEVER send private key: Like it’s says, it’s private; for your eyes only. NEVER share your private key with anyone. If they need to verify your balance, they can simply do it using a tool like Etherscan using your wallet address, WITHOUT your private key.
2. Don’t send money to anyone’s address: Never, ever send money to someone or company who ask in order to participate in an airdrop. This is a scam 100% of the time. Airdrops are free!
3. Check official sources: Check the airdrop company’s official social media accounts like Twitter and Telegram. Check to see if the airdrop was officially announced on their profiles. If not, you’re most likely the target of scammers looking to collect your data or steal your money.
Example of a scam airdrop:
The first red flag is the “send 0.5 – 2 ETH and receive back 2-5 ETH + 1000 – 1.000.000 CRX!” 7 of 8 of the replies are from fake twitter accounts. Some users are already claiming it’s a scam; so listen to them.
The twitter account is only 24 hours old, but already have 3,000+ followers. AND they’re claiming to have raised 8 million Euros (in 24 hours?). If it sounds too good to be true, it is.
They did a horrible job at Photoshop that image. If you do a simple Google Reverse Image Search, you will notice the photo belongs to Thrive.
Don’t be a victim. Always look for ways to determine if an airdrop, ICO, STO, IEO or blockchain project is a scam by doing your due-diligence.