Understanding the Crypto Airdrop Concept
This smart tech revolution of cryptocurrencies has come up with another craze known as airdrops. It is literally airdropping cryptocurrencies into your wallet and the surprising thing is free of charge. The term is being coined into ‘Cryptodividends’ one of the most current crypto PR craze happening. An airdrop happens when a particular blockchain decides to give free tokens or coins to a crypto community. This takes place once the ICO is completed are the coins or tokens are now available to be traded in the market. A company gives away a certain percentage of their market supply to people who had previously signed up and shown interest in this particular project.
Most airdrops are pre-announced as the ICO is ongoing and people interested are expected to sign up, complete some sort of online survey so as to qualify for the airdrop. Airdrops are only open for a limited period of time. The only requirement you need to pass is that your digital wallet has the relevant parent blockchain. Meaning if the company offering the airdrop is based on Bitcoins, you need BTC. If it’s based on Ripple, you need to have XRP stored in a secure wallet with private keys ownership.
How Airdrops Work
Most companies reward you for ownership of parent blockchain that a particular crypto came from. They take a ‘snapshot’ picture of the parent blockchain then if you own specific blockchain coin you are rewarded. This is called a ‘fork’ where all users are given access to new tokens if they have control of their private keys. Airdrops are done by ICOs, not the actual developers who do the forking.
Why Companies Issue Airdrops
If anything comes to you freely, just know the investment is you. These incentives offered to make you feel like a valued investor and give you insight into the company’s project, therefore, you want them to succeed. Airdrops are issued for the below reasons:
- Companies use you to promote their product, therefore, it is an easier way for them to get their product on the market.
- It serves as a PR strategy to get more and more people interested in their token or coins.
- Airdrops facilitate price appreciation of the coin as the demand for the tokens or coins increase.
- They generate overall adoption into the market. Once you receive free tokens, your interest increases, psychologically making you want to grow your portfolio with them. Free tokens or coins make you learn more about the coins, gain knowledge on the particular coin making you lean toward investing in it rather than other coins you think are a high risk just because you know little about them.
You never want to miss something this valuable that appears out of thin air in your wallet. Airdrops increase your investment portfolio and it is beneficial if one stayed in the loop with current airdrop news. Airdrops are known to give easy tasks and easy money. Airdropalert is a website that constantly updates all regular and exclusive airdrops that take place for all cryptocurrencies.