Everything You Need to Know About Airdrops
Everything You Need to Know About Airdrops
Defining the Difference Between Faucets and Airdrops
You may or may not have heard of these before, but there are things called faucets and airdrops. These are legitimate ways to get free coins, but there are definitely some things you need to know about each. In terms of faucets, services set up to give you tiny amounts of free coins. You can hit up these services periodically, subject to minimum withdrawal limits, because some coins have high fees. This doesn’t make sense if you’re trying to withdraw a super-tiny amount; the fees will eat up all of it.
One can access faucets at certain sites or mobile apps, as well. The reasons people set them up include:
- to promote a particular coin to get you interested in it
- to drive traffic to a site
- to get ad revenue from you, or other similar benefits
On the other hand, airdrops are a process in which you can receive free coins (most of the time) from a specific project or team that runs a different coin. They take a snapshot of the blockchainâ—âfor example, a snapshot of the Ethereum blockchain at a certain timeâ—âand then everyone who has Ethereum will get a certain amount of coins deposited automatically into their ERC20 wallet.
What Is an Airdrop?
It’s well known that people are getting free crypto airdrops in order to trade them and make money. If we think about the concept of an airdrop in the non-crypto context, we can easily understand how it works in the crypto context. In the non-crypto context, airdrops are used to deliver food and supplies in boxes to people you cannot reach in other ways. They are normally dropped from airplanes with attached parachutes so they reach people on the ground safely.
In the crypto context, airdrops are used to distribute crypto assets, such as coins and tokens, as widely as possible to encourage people to start using them. These assets can become valuable, causing many people to become interested in receiving airdrops and trading them. This may sound like people are getting free valuable coins, but that’s not a correct statementâ—ânot all of them are valuable. You may think the easiest thing to do is to get all the airdrops and hope that some of them become valuable. If this thought comes to mind, you may wish to consider an old marketing proverb. If you are not paying for a product, then you are the product.
What does this mean? It normally means that you end up giving your contact details (or more) to the people providing the airdrops. That may be something you are happy with; however, not all projects are legitimate. This means that you should protect yourself. You can do this by using different email addresses and passwords for any crypto-related accounts you set up. You should also use two-factor authentication on accounts, if possible. The last bit of security advice is you should never share your private key. If anybody ever asks you for this, do not trust them.
How to Participate in Airdrops?
To participate in the airdrops, you need a couple of different things.
- An Ethereum-based wallet. Why Ethereum? Because most ICOs usually run ERC20 Ethereum tokens.
- An active balance on MyEtherWallet.
- Twitter, Facebook, and Telegram accounts so you can share ICO marketing info.
Who Can Take Part in an Airdrop?
Whoever distributes an airdrop gets to decide who can take part in the airdrop. Earlier approaches were based upon whether or not a person already owned some crypto assets, such as Bitcoin, Ethereum, and so on. As these assets have become more expensive and interest in crypto assets has increased, people have been using a number of alternative methods. One method involves requesting contact details such as email addresses, which point to BitcoinTalk, profile details, Twitter handles, Telegram, usernames, etc.
This forum (BitcoinTalk) gives people the opportunity to:
- ask the founders questions about the project
- determine whether the project is legitimate in order to maximize the number of airdrops in which you can participate
The most common method now is to reward airdrop applicants for retweeting certain tweets with irrelevant hashtags, or making posts on Facebook. This means that airdrop participants join the airdrop by performing promotional work. This also blurs the boundary between airdrops and bounties, which ranges from social media activity to language translations. Once these wallets are downloaded, people who want the airdrop are requested to submit their wallet addresses as evidence that they have downloaded the wallet. This enables the airdrop to be made. This method is often used by proof-of-stake coins to build stronger networks.
How Does an Airdrop Reach People?
An airdrop reaches an individual applying for the airdrop when it is sent to the individual’s address. It is possible for an individual to have many addresses. If you’ve downloaded a machine wallet, then the airdrop can be sent there. Depending on the support that the crypto asset has, you may be able to send your crypto assets to a mobile wallet, which will function like an app on your mobile phone. You may also be able to store the crypto asset on a hardware wallet, such as Treasurer or Ledger. There are a number of third-party web wallets available that can be used for receiving crypto assets. Many airdrops are for crypto assets built on the Ethereum platform, and these often require people to use MyEtherWallet or other similar wallets. If an airdrop application form asks you to share in wallet address, you should first set up a MyEtherWallet or other similar service in order to receive your airdrop.
Some airdrops use a proprietary approach, and have their own web wallets. Normally, such projects intend to build dedicated wallets, which can be accessed offline, too. Before that happens, they simply store them on their website so you can see the balance as you log into your account. Another place you may receive an airdrop is on an exchange where people trade crypto assets. This often happens when an airdrop is based upon existing crypto asset holdings, such as how much Bitcoin or Ethereum one owns. Airdropping new crypto assets directly to exchange addresses is relatively rare.
What Should You Do Once You Get Crypto-Assets?
Once you receive crypto assets, you may end up wondering what to do with them. Should you hold onto them for the long term, or should you sell them immediately? To decide, do your own research to gain an understanding of the long-term potential. Unfortunately, there is no easy answer. The Crypto Freebies channel is not qualified to give investment advice, and therefore, you may want to consider getting professional advice.
If you do decide to sell them, you will need to be registered on the exchange where your crypto assets are traded, unless you decide to sell directly to someone, which can be risky if they are not known to you. There are a number of exchanges where crypto assets can be found. These exchanges are some of the smaller ones, where new crypto assets seek to list first before moving on to larger exchanges, such as Bittrex.
A coin airdrop is a double-win situation. On the one hand, you get free crypto tokens that could be worth something in the future. On the other hand, blockchain projects raise awareness for their crypto-projects during their ico airdrop.
In this way, companies are able to create a community around their coin. Indeed, if you give someone a coin, he/she will likely get involved, and will get some money out of it. This is a means of creating a customer database at a low price.