Bitcoin was used to buy a pizza in 2010 for 10,000 Bitcoins (BTC). I know I know, 10,000 BTC? That is a lot of BTC for a box of dough. You’re probably thinking what I’m thinking: if only we had a time machine to go back in time and sell as much pizza as possible, we would be extremely rich off the dough. Unfortunately, we haven’t cracked that code yet and we can only drool when we think of the opportunity we missed. From 2010 till now 2024, BTC has gained popularity and has immensely increased in value. You can no longer get Bitcoin for cheap but there are still other coins you can essentially get for free and who knows you might just be lucky enough to hodl it and watch it increase exponentially in value. Who needs a time machine when there are Crypto Airdrops?
By the way, if you wanna know how to get started with bitcoin, checkout our article here on “Is it too late to buy bitcoin in 2024”
Crypto Airdrops? What are those?
A crypto airdrop is essentially the transfer of cryptocurrency for free to a group of people who are usually active members of a community either as:
- a reward for their loyalty;
- participation in tasks that increase the popularity of the coin or;
- generally, a marketing campaign to increase the adoption of the cryptocurrency.
We know that BTC and other cryptocurrencies are a new form of currency rivaling traditional currencies. But across the board they still share some similarities, for example: Portability. An essential feature of a currency is that you can transport it from one place to another, if not it cannot easily be exchanged for goods or services.
Cryptocurrencies being a digital form of currency have taken portability to new heights with myriads of systems of distribution. A crypto airdrop is one of these systems of distribution.
There are different types of crypto airdrops depending on the project involved.
1. Standard Airdrop: Standard airdrops are tokens distributed for free to specific holders of a cryptocurrency to promote a new coin while leveraging the community that has developed around the blockchain the new coin is built on. For example, holders of a certain amount of Solana are rewarded with a meme coin built on the Solana blockchain. The purpose is to promote the memecoin by leveraging the existing community of the Solana blockchain.
2. Bounty Airdrops: A Bounty Airdrop is the distribution of cryptocurrency to wallet holders that perform a particular task such as tweeting about the cryptocurrency, writing an article or creating content that promotes the token. As the name suggests, participants who successfully perform tasks are awarded a bounty in exchange for the activity they performed. These activities, in turn, generate buzz for the cryptocurrency.
3. Holders Airdrop: Unlike Standard airdrops that are distributed to holders of the specific currency that is the primary cryptocurrency for a blockchain. Holder airdrops are airdrops distributed to holders of the project’s token to promote the loyalty of holders and encourage them to keep holding. For example, a memecoin could distribute additional memecoins to people who hold a certain amount of its tokens to encourage them to keep holding the memecoin.
4. Exclusive Airdrops: Exclusive Airdrops are cryptocurrencies distributed to a specific group of individuals based on criteria. Usually it is a criteria that show a deep level of involvement and commitment to the development of crypto projects. There are no specific criteria, but it usually involves the following:
- Being one of the first set of people to be involved in the projects
- Holding a certain status within the community like being a top contributor
- Owning a unique and rare NFT or token from a previous project
- Being part of a select group nominated by the project team. The purpose is to reward the most important members of a crypto community or project.
Hardfork airdrop: Sometimes a cryptocurrency may undergo an upgrade or a split which results in the creation of a new cryptocurrency or a new blockchain entirely. These upgrades sometimes are due to issues the community has raised or is not comfortable with. When such an upgrade has occurred, holders of the original cryptocurrency receive an equivalent amount of the new cryptocurrency as a reward for their loyalty and also as a strategy to maintain the adoption of the new cryptocurrency.
For example, when Bitcoin split in 2017, Bitcoin Cash was created. If you had one Bitcoin you got 1 Bitcoin Cash after the split. This was to reward you for holding Bitcoin and also encourage you to adopt Bitcoin Cash
How do Crypto Airdrops work?
What all these different types of crypto airdrops have in common is that they serve as promotional and marketing techniques, essentially functioning as a form of advertising. Here’s how they work and why they are important:
- Promotion and Advertising: Crypto airdrops are primarily used as a promotional tool. By giving away free tokens, projects can generate buzz and attract attention in the crowded cryptocurrency market. This form of advertising is highly effective because it directly engages potential users and investors.
- Increasing Popularity: The main goal of an airdrop is to increase the popularity of the token. When people receive free tokens, they are more likely to learn about the project and its goals. This initial interest can lead to increased community engagement and wider adoption of the token.
- Driving Usage: By distributing tokens to a large number of people, projects encourage these recipients to use the tokens within their ecosystem. For example, users might spend the tokens on the project’s platform, trade them, or use them in decentralized applications (dApps). This activity can drive real usage and utility for the token.
- Boosting Token Value: As more people become aware of and start using the token, its demand often increases. Higher demand can lead to an increase in the token’s market value. Additionally, if the project succeeds and gains a strong user base, the token can appreciate significantly over time.
- Supporting Project Goals: Each blockchain project has its own mission, whether it’s creating a new financial system, providing decentralized services, or building a new kind of internet infrastructure. Airdrops help these projects achieve their goals by distributing tokens widely, fostering a community of users and supporters who are invested in the project’s success.
So how do Crypto Airdrops work exactly?
Crypto airdrops are typically announced beforehand through the project’s official media channels, which are most often found on their websites. These announcements serve to inform the public about the upcoming airdrop, including details about what it is, the specific criteria that need to be met to qualify for participation, and the exact date and time when a snapshot of the eligible wallets will be taken. This information helps potential participants understand how they can become eligible for the airdrop and ensures they don’t miss out on the opportunity to receive free tokens.
A snapshot involves taking a detailed record of wallet addresses and the specific tokens they hold, which is essential for different types of airdrops. In the case of a holder airdrop, a snapshot captures the wallet addresses and the tokens they currently possess. For a bounty airdrop, a snapshot records the activities associated with a wallet, such as transactions or participation in promotions. This snapshot allows projects to identify and keep a record of eligible wallet addresses so they can distribute free tokens accurately and fairly.
Conclusions
Crypto airdrops offer a thrilling gateway into the dynamic world of cryptocurrencies, much like striking digital gold! Whether you’re a seasoned crypto enthusiast or a noob, airdrops provide an opportunity to dive into Web3 without cash. Imagine waking up to find your digital wallet unexpectedly fuller, courtesy of your participation in the crypto community. From standard to exclusive airdrops, each type brings its flavor of excitement and reward.
So, if you’ve ever dreamed of catching the next big wave in crypto, keep an eye out for airdrop announcements. You might just score some free tokens that could turn into a fortune. Embrace the spirit of exploration, stay active in the crypto space, and who knows? Your crypto airdrop could be the start of your journey to the moon! 🚀💰
DISCLAIMER: No financial advice was shared in this article. DYOR
