The Meaning of an Airdrop
Has your cryptocurrency wallet ever seen a raise with free coins out of the blue? If so, that may be the result of an airdrop. Yuppii! But wait, what is an Airdrop?
Airdrops can occur in a variety of ways: forks (e.g. Bitcoin Cash, Bitcoin Diamond), ICO purchases (e.g.Raiden Network), and freebies (e.g. Binance gifting customers with 500 free TRX). Sometimes it will occur if a team behind the blockchain project decides to give away “free” tokens.
One of the most well-known examples of an airdrop is when Bitcoin Cash (a hard fork of Bitcoin) gave Bitcoin holders an equivalent amount of Bitcoin Cash. If, at the time of the airdrop, you were holding 0.5 Bitcoin, you were lucky to receive 0.5 Bitcoin Cash. As Bitcoin Cash currently valued at $2,469.36 USD, that is a pretty sweet deal!
Why do Airdrops Happen?
However, why this happens has not been determined yet. Why would a team give away free tokens? Let’s think about it over an example. You’re walking down the aisle of your grocery store and employees are offering you samples of food to try. You may take a quick peek to analyze what the food is to decide if you want to try it. You take a bite, and you like it. The employee offering you the free sample directs you to the right aisle. Because of that single bite, you may go and buy the product.
In marketing, awareness is one of the initial steps in a buyer’s journey. Psychology plays a crucial role in the aspects of an airdrop as it is with the grocery store example. A buyer is much more likely to purchase a product he/she is familiar with than a product he/she does not have any idea of. So, those in charge of distributing the tokens consider an airdrop as an opportunity to give you a taste of their tokens. When it is compared to costly advertising orms such as instagram ads etc., airdrops are often a more effective approach to showcasing coins.
How can I notify myself of an Upcoming Airdrop?
There are many sites and online groups that inform users of upcoming, past, and active airdrops. For example, Icodrops and Airdropalert, offer a list of upcoming airdrops, how many days are left and the currency of the airdrops.
Another way to be informed of an airdrop is to follow the social media accounts of each project.
Airdrops are surprises (if you are not a part of the team). Sometimes airdrops are announced before they happen. Set of rules to receive airdrops can vary each time. These rules are decided on by the project’s team. That’s why each airdrop seems to have different strategies. There are no standard implementation rules on how airdrops need to be designed yet. If the government steps in, official regulations may be brought to life on the way they ocur.
One of the future airdrops is from the ShipChain project. Their strategy exceeds just holding a certain currency in your wallet and receiving free tokens. As long as you follow these guidelines, you are eligible for receiving airdrops around March:
- Be an “active member of our Telegram group. An ‘active member’ means anyone that is a member of our Telegram community before the airdrop signup process is complete, which is two weeks from the Jan 15th start date.”
- “Pass KYC/AML (Know Your Customer/Anti-Money Laundering). This is a simple form we will have you fill out, it will be emailed to you within 1-3 weeks of completing this registration.”
- “Have a valid ERC20 non-exchange wallet.”
The wallets I need?
Usually, airdrops occur on the Ethereum or Bitcoin blockchain. All you need is an account on an exchange. However, those in charge of the airdrop sometimes states a specific wallet. This wallet may be an “ERC20 non-exchange wallet”. If you’re new to cryptocurrency, you may not know what this means. It is ok, we’re here to help.
What ShipChain means by a “non-exchange wallet” is simply a wallet that isn’t located on exchange sites such Binance or Coinbase. Exodus and Jaxx are included in reputable non-exchange wallets. Feel free to visit our Bitcoin Wallet guide for a list of wallets. This article also tells you how to store your tokens and the advantages/disadvantages of different types of wallets.
An ERC-20 wallet supports the Ethereum blockchain system. Some tokens follow Bitcoin protocol, some follow Ethereum, etc. So, if an airdrop guideline requires you to have an ERC-20 wallet, you should have a wallet that is eligible for ERC-20 tokens. For example, MyEtherWallet (MEW) is a popular ERC-20 wallet.
Some Last Look about Airdrops
While researching for airdrop, you have to make sure you visited the official site of the Project. If you want to be sure that you are in no scam site, you can follow the link of the website from the official social media sites of projects. As we mentioned before, the cryptocurrency market is unregulated right now, and there is a high risk of fraud and coin theft. A dignified blockchain project will not ask your private wallet information other than its public address. Do not give out your private keys to ICOs if they claim they need it for an airdrop. Identity theft and hacking attempts are common in the cryptocurrency community. Some measures can be taken, and do not fall into scams while you can prevent them.