What is Airdrop?
Airdrop is a process of distributing new tokens or coins in a specific proportion to the wallets of existing users free of charge.
22:39 12 June 2018
Airdrops are created by various blockchain startups in order to enhance their cryptocurrency projects.
Now, as you have understood the definition of Airdrop, then here I will provide you with details about various different types of Cryptocurrency Airdrops available in the market.
Different types Cryptocurrency Airdrops
List of Airdrops includes Holder Airdrops, Forked Airdrops, and Bounty Airdrops. Now, let's look at them in detail.
Almost all the blockchain projects are established on bigger and well-known blockchains such as Ethereum. As per the details, 90% of the Airdrops today are established on Ethereum Blockchain. If you want to participate in this type of Airdrop, then you have to "hodl" the main cryptocurrency and then you will be dropped with a new one.
When a specific blockchain is divided into two different blockchains, then it is known as forks. Here also, if you are holding the cryptocurrency from the first chain, then you will be dropped with the currencies in the new chain in an equal ratio. The most famous fork was the Bitcoin Cash fork that split from the Bitcoin blockchain.
Bounty airdrops are gaining buzz since last 1 year. If you want to participate in these Airdrops, then you have to complete some of the social tasks and register on the website. One of the important things to keep in mind is that, as most of these are built on Ethereum, you will have to provide your erc20 compatible wallet address. Here, social tasks include, liking the Facebook page, following on Twitter, joining telegram page, subscribing to the YouTube channel, etc.
There are also bounty campaigns who ask for more serious jobs to complete, like translate the whitepaper or write a blog. These bounties often have a higher reward than the regular airdrop.
Why are enterprises providing free tokens?
Airdrops are the best way of promoting new blockchain project and to enhance the awareness about the project on the social media platforms. Also, a large and healthy community is very much useful for making blockchain project successful.
Free tokens available in airdrops are real or not? Yes, they are real. However, in order to participate in bounty airdrops, you will have to invest your time and also provide details like name and email address.
What are risks in Cryptocurrency Airdrops?
There is nothing free in the world. Here, you have to provide your personal details like name and email. Here, comes the scammer. But you may have a question, "How can it be a scam if it is completely free". There are certain important things to check in the blockchain projects like improper whitepapers, no-real world use case and no-real team. But, the main problem is that the scammers collect the information you provide in the application and then they either sell it or use it for again in future.
Safety rules for participating in Airdrops
Here is the list of things to consider for before participating in Airdrops
- Never pay for an Airdrop
If any of the Blockchain Project is requesting you to pay money in order to participate in airdrop, then quickly move away from the Airdrop.
- Never Share your Private Key
This is the most important thing in the crypto world. Never ever share your Private Key with anyone.
- Create a dedicated email address especially for Airdrops
Create a new email address which you will only use for Airdrops. The best thing is to have a pseudonym emails for each registration. This becomes simple if you own a domain name and you may create an email alias for the very account. For example, "email@example.com". Here, basically you won't create an email, you will just forward emails to the main email address. Hence, the best way is to use an alias email in Airdrops.
- Never use the same Password for different websites
This rule is applicable to all of your accounts, and particularly to airdrops which will require registration to the websites. Best practice is to use password manager application for storing online password.
- If you are a bit suspicious about the project, never do KYC
KYC Stands for Know Your Customer. In a majority of cases, to participate in airdrop, you have to provide personal data and also do KYC. The risk of sharing personal data with a blockchain which is not launched yet is very high. However, if the value of airdrop is high, then do an appropriate research and then share data.
- Create a new Ethereum Address
The best practice is to use create a new Ethereum address and use it for Airdrops. Even if you don't have any issue in sharing address, I feel safer in not providing my Ethereum address. Also, data collectors sell the high-valued data.
Now you know all about airdrops, check out these five ICO airdrops that you can collect with a few simple social task.
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