What are airdrops in crypto currency?
Airdrop is quite a popular term that you must have heard if you are in the business of crypto currency. This is a marketing strategy and tokens or coins are sent to the wallets of the people who are trading.
Understanding the cryptocurrency airdrop
The airdrop is a marketing strategy that is adapted by the startups to promote their company. This is based on the “Block Chain” theory. This airdrop allows you to bootstrap a virtually run project. The important target of this is to spread the awareness of bitcoins and other cryptocurrencies among the people. Thus more people are able to trade with it when the initial coins are being offered.
You will find these airdrops at the forums of the bitcoins and these would also be promoted in the website of the various organizations. Everyone will not be entitled to get these tokens. Only if you are the owner of the crypto wallet, will you be able to get these. If you want to earn these tokens, then it is essential for you to perform certain tasks. These tasks may also include the posting about the currency in social media. You also get gifts if you have these tokens in your wallet but in order to qualify, it is necessary for you to have a minimum number of cryptocurrencies.
According to experts at bmmagazine.co.uk, these airdrops are of two types- one is good and the other bad. You will also come across something that is referred to as the pump and the dump scheme. If you want these cryptocurrencies, you will not have to make any kind of capital investments. These are only for promotional purposes. If you are being asked to invest then that means that it is a fake cryptocurrency.
There are many reasons as to why the companies should conduct the airdrops and know more about this, you can go through the discussion below:
- General Awareness
Airdrops help in creating awareness among people. In the year, it is a fact that the ICO raised $7 billion, however, the major part of this fund was raised by the group of projects. The saddest part is that there are a number of ICOs that do not even the minimum attention that they so much deserve. So, rather than each of the users going through these projects, it is a better option to offer some tokens.
- Understand the users
If you want to participate in these airdrops then make sure that you fill up the forms. However, doing this will help the organization to know about your details.
- Raising Funds
With the help of the EOS you will be able to do a lot of fundraising. But it is essential for you to understand this first. Let us take an example, where you are using the EOS blockchain. There are DApps that make use of the ASD tokens. There are a total of 100 million total ASD tokens that have already been issued. After its launch, each of these tokens would be valued at $0.10. Thus the market cap for all of these tokens is 100 millions. Once these tokens have been launched, you might want to allocate some of these tokens to the EOS drops. Thus the result is thus, 20 million*0.1 = $2 million. You thus allocate this for three giveaways. This also means that the overall capital that you have also goes down. Originally it was $10 million and later it went down to $8 million.
- Loyalty is rewarded
You will hardly find loyalty among the cryptocurrency users other than the Bitcoin users. This is because they are here to make money. These users are always trying to run behind the next big thing. There are certain airdrops that are constructed in a different way. If you have more of these airdrops you will be able to get more of them. So, if you are a loyal user and have a subsequent number of tokens of a particular company, then you will be rewarded with more tokens.
- Wider distribution of the tokens
At times the ICOs are taken over by the whales and this is the worst thing that can happen to any ICO. However, the question that might arise here is that who are these whales. Whales are rich investors who buy all of the tokens in the ICO and thereby do not allow others to get their share. If you are a valid member, then the virtual tokens are sent to your wallets. You might get these tokens either for free or there is a possibility that you might get them in exchange for small tasks. The tasks may be as small as simply retweeting about the issuance of the currency by a company.
Conclusion:
The important target of this is to spread the awareness of bitcoins and other cryptocurrencies among the people. Thus, more people are able to trade with it when the initial coins are being offered.
