Over the years, there have been countless ways in which a business advertises their goods or services. The most common forms of advertising were through newspapers, television and radio. There were also the physical distribution of mail advertising and the likes of billboard promotions.
Once the internet and social media came to the fore, this quickly become a much more effective and popular way for companies to advertise. It also is a lot cheaper than more traditional mediums.
With the advent of the cryptocurrency sector and the massive growth it saw in 2017 and beyond, new ways of advertising began to come to the fore. The most popular of these methods is known as the airdrop.
What exactly does an airdrop entail?
An airdrop is the process of giving out tokens or coins to a large amount of people without any cost. It is essentially a give away of coins or tokens to the masses.
This is an effective manner for new projects to advertise what they are all about. Everyone likes free stuff, so this will capture the attention of people and get them talking about your project.
In return for the airdrop, the company will require some small pieces of information from those obtaining these free tokens or coins. Usually, this requires them to provide their email address or post on social media or join a Telegram group for example.
In some case,s there are not even any requirements upon the receiver, all they need is to possess a certain amount of Bitcoin for example. Both parties are benefitting from such a transaction.
The company is getting publicity and enhancing their brand awareness, while the receivers are getting free coins which can be used or likely traded at a future date.
Main reasons a company does an airdrop
There are a few different aims a company may have when they hold an airdrop.
Perhaps the main aim is to enhance the public awareness of a given project. There are thousands of different coins and tokens out there today, so it can be hard to stand out from the crowd. Airdrops can quickly take off and get a lot of exposure in a short amount of time.
Holding these free tokens, the people will likely keep a close eye on the project going forward so they can monitor when they can use or trade these tokens. There is a much better chance too that they will be an early adopter.
Some projects simply want to say thank you to those in the community who have supported them. Sometimes supporters will not get the chance to participate in an initial coin offering (ICO) if private investors get the first bite of the cherry and all the needed funds have already been raised.
A company may then decide to hold an airdrop to thank these people for their support despite not being able to obtain any tokens.
Certain nations such as China have banned ICOs. Some companies try to get around these rules by giving away tokens for free through airdrops. Finally, airdrops are an easy way to create equality in a given project.
It stops certain parties having an advantage over others. It allows for a network that is inclusive and well distributed.
How to get involved in an airdrop
If you are looking to participate in an airdrop, there are a number of things you need to allow for.
You need to have a cryptocurrency wallet. It is not a good idea to use the wallets on exchanges as you do not have the private keys for these wallets. This means that your tokens are not going to be very safe.
The best option is to use a hardware cold storage wallet that will not be connected to the internet. Therefore, nobody will be able to hack into the device and steal your funds.
There will also be a need to have a legitimate email address when signing up, as well as social media accounts if you need to share the details about the airdrop in order to receive your free tokens.
Finally, there is usually a deadline you will need to meet when it comes to partaking in an airdrop, so make sure you have signed up in time and met all of the relevant steps.
Are there different types of airdrops?
There are a number of variations you will come across when it comes to airdrops.
The standard version of an airdrop only needs you to sign up by email to their newsletter. You can do this on the website of the project. Usually, the only details they need is your first name and your email address.
A bounty airdrop needs to do something that has a social aspect to it. This could be sharing the link with a certain amount of people or sharing the details of the airdrop on social media. When you have finished each of the requirements you will then get your tokens.
An exclusive airdrop is when some sort of community you are a member of has exclusive access to this airdrop. You need to be signed up to these platforms in order to take advantage.
Finally, a holder airdrop is when you have a certain amount of tokens depending on how many you already hold. For example, if you own 5 BTC and an airdrop promises you a ratio of 1:5 BTC, you will get 5 free tokens for each of your BTC.
Considerations to take with airdrops
The cryptocurrency sector is still in its infant stage. There is still not much of a regulatory framework in place on the sector, which means that there is more of a chance of falling victim to some sort of scam.
Airdrops have in the past been a popular way to scam people. Therefore, you need to take some considerations when you are deciding whether you should partake in an airdrop or not.
It is usually a good idea to use an email address that does not contain a lot of personal information in case it becomes compromised. You should never share your wallet’s private key if you are asked and you should make sure to check reviews to ensure that you are dealing with a legitimate airdrop.
This includes visiting forums and searching social media to try and see if there are any warning signs. You should also avoid clicking links that appear to be suspicious. Always go directly to the project site through a search engine or manually typing in the correct url.