There are several ways of making money from cryptocurrencies but not all are secure and legit ways. However, one genuine way of earning through cryptocurrencies is AIRDROPS.
An airdrop for a cryptocurrency is a procedure of distributing new tokens/coins by awarding them in a certain proportion to existing holders of a particular blockchain currency, such as Bitcoin or Ethereum etc.
In simple terms, if you HODL one type of coin, you are automatically eligible to claim other coins/tokens just because you were holding the parent coins/tokens on which airdrop is being done.
That is why this method of coin/token distribution is called airdrops signifying ‘free droppings’.
Table of contents:
What Is a Crypto Airdrop?
First of all, let’s focus on the airdrop cryptocurrency meaning. What does airdrop mean? Maybe you’re a newbie in the crypto world – welcome. And it’s better to know what you’re dealing with… So, a crypto airdrop, coin airdrop or cryptocurrency airdrop, is a limited time event created by coin projects to promote their crypto-currencies. How? By distributing tokens or coins to early adopters, for free. In other terms, projects airdrop coin.
While there aren’t many requirements to get free airdrop coins 2018, you may have to work a little (create a post, like a page etc.). Or even to share some personal information (share your Facebook profile or give access to your contact list).
Also, you may need to be active in the crypto community. Indeed, some crypto-airdrops are restricted and noobs can’t get in…
In addition, you may require some coins from a specified blockchain in your wallet. Most likely for bitcoin airdrop or ethereum airdrop, because they’re the most popular out there. But a free coin airdrop can be done on any blockchain. However, ethereum is dominating the cryptocurrency giveaway industry, with their ERC20 and ERC223 tokens. And that’s very convenient, to have all your airdrop coins in the same wallet! There’s a page where we conveniently listed all the ethereum airdrops.
And this brings us to the best part: You can receive free cryptocoins anytime, without even knowing about it! Indeed, some platforms give away tokens to people holding some of their coins, just like that. Therefore, I’d recommend you to hold a little bit of the most popular coins in your portfolio. And enjoy as many freebies as possible!
Also, don’t worry too much about the requirements now. Because I’m not only offering a crypto airdrop tracker, with a list of airdrops. But I’ll also explain how to get free tokens for all upcoming airdrops!
Why Do Free Crypto Airdrops Occur?
There are several motivations for carrying out cryptocurrency airdrops, right from creating the hype and buzz to actually distributing the whole supply of coins/tokens.
Some of the reasons for carrying out crypto airdrops are:
- Even Distribution Of Total Token Supply
One proper reason for airdrops is to evenly distribute the total token/coin supply so that there is less centralization in terms of bagHODLer holding a large sum with themselves.
Omise gave away five percent of their OmiseGO cryptocurrency to holders of Ethereum in September 2017.
In this case, OmiseGO took the advantage of already distributed Ethereum economy to distribute their tokens too.
- Rewarding Faithful Early Investors
Many cryptocurrencies want to reward its early supporters and investors who first bought their ICOs or tokens. What better way to reward them than by offering them some more new tokens – for free.
This also motivates early investors to hold their parent tokens for longer durations and overall I feel it is a good way of rewarding.
- Awareness About The New Crypto
Many times, just for spreading awareness, the airdrops are carried out for the HODLers of popular cryptocurrencies such as Ethereum, Walton etc.
- Marketing & Hype
This is the most common trend nowadays. Airdropping coins/tokens for the purpose of marketing and collecting leads for further business opportunity expansion.
You will also find projects running schemes such as:
- (TEU) is airdropping 125.000 USD in TEU tokens to first 15,000 airdrop participants!
- Get up to 60 REPU tokens free just by joining Telegram!
- ApolloDAE referral airdrop for Telegram users!
- 50 SYN tokens free when you sign up!
So this a kind of airdrop cum bounties for doing minor tasks like signups, referrals or joining Telegram and following on Twitter etc.
- Hard Forks
Another popular way is to fork popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, Monero and create a new coin, to be distributed to existing holders of these parent coins. CoinSutra has supported few airdrops that happened in the past through such forks, some of which were:
- Bitcoin Cash
- Bitcoin Gold
- Bitcoin Diamond
- Litecoin Cash
Coin Airdrop: How Does an Airdrop Cryptocurrency Work?
Coin-airdrops are a brand new method to distribute free tokens in the cryptocurrency community. As a result, there isn’t any standard set of rules yet. And each blockchain team can request whatever they want from their backers.
But always beware of scammers! Legit coin airdrops will never require you to share your private keys. And if you find one that does, please report it to the community. Because unscrupulous people are definitely behind it.
While I’ll give you as many details as possible for each coin airdrop, you may have to get in touch with the developer directly.
If you need specific coins during a cryptocurrency airdrop, the dev team will make a photo of the corresponding blockchain. And only the people holding the crypto-currency in their wallet at that time will be able to get the free tokens crypto. While you may get the tokens automatically, you may also be requested to claim airdrop tokens on the project’s website.
If the free coin airdrop is linked to a social media network, you’ll have to share or retweet a post with a link to the project. And you may need a certain amount of followers to be eligible… Also, some teams request an access to your contact details and list of friends!
The Tools You’ll Most Likely Need
- An Ethereum Wallet: not one that is on an exchange. It has to be a personal address that is ERC20 compatible because most of the tokens that are airdropped are ERC20 tokens, which are or were originally Ethereum-based ICOs. I suggest using MetaMask or MyEtherWallet to get started immediately, but in the long-term I always recommend getting a hardware wallet like the Ledger Nano S.
- The Ethereum Wallet Must be ACTIVE. By active, I mean that you have to show at least some human use of it. Lots of airdrops have checks in place to make sure that you aren’t just randomly generating a bunch of addresses and signing them all up to unfairly obtain more coins. This means that if your wallet doesn’t show activity, it might not receive the airdrop. Sometimes, coins will be explicit in what they look for, including some type of balance in the account.
- A Telegram Account (httpss://telegram.org): I’m sure there are amazing reasons why Telegram is the chatting tool of choice for many of these ICOs. The coins want to boost the audience count. Usually, these airdrop coins will also require you to sign up for their Telegram accounts. Until you receive the coin in your Ethereum wallet, do not leave the Telegram accounts or you risk disqualification for the airdrop.
- A Twitter Account (httpss://twitter.com): Similar to the reasons behind the Telegram account, many of the airdrop coins will also require you to follow them on Twitter. Some of them will even ask you to retweet some tweet.
- An email address. sometimes airdrops will ask for your email, too. If you don’t feel comfortable with giving them your real email, just create a spam one. Remember the password, though; some of them actually ask you to confirm your email.
Obtaining and Withdrawing Tokens
Usually, it takes about 1–2 months after the end of the airdrop before you receive your tokens. This is primarily due to the fact that many airdrops occur before or during token sales, in conjunction to spread awareness. And tokens are not distributable until the end of a token sale anyway (I’ll write a separate piece on Token Sales, or ICOs).
To check your wallet info and see if the token has appeared in your wallet yet, just go to Etherscan (httpss://www.etherscan.io). Type in your ETH address into the search box.
Circled in Red is the area you want to look. If the token is available in your wallet already, it will show up in the token tracker dropdown. If you don’t have a token tracker appear on your result, then you don’t have any tokens in your wallet yet, and it also means you didn’t receive it.
Once you actually obtain the tokens, you can withdraw them directly through a services like My Ether Wallet (MEW). All you have to do is access your wallet (through MetaMask, Ledger Nano, or some other way — direct private key pasting is not recommended) and select the token you want to withdraw.
Where to Find Airdrops?
The first step in profiting from airdrops is finding them. Not long ago, you had to be a frequenter of crypto sites, such as Bitcointalk, to hear about new airdrops. Increasingly, however, airdrops are easier to find. This is mainly due to the emergence of dedicated airdrop websites and social media channels that track airdrops and post them daily. These aggregating sources make finding airdrops easier, and those who maintain them benefit from people using their referral links.
How Profitable Are Airdrops?
Every once in a while an airdrop can be hugely profitable. The best example in my experience was a recent airdrop of Oyster Pearl. I received over 2400 PRL, which eventually went up in value to over $5 per token. I sold just under half of my holdings. The airdrop I received of Polymath is slightly more common, yet still not typical, result. I got 250 POLY, which has since hovered in value between $90-$200. More often than not, however, the amount of tokens you get is so small it is barely worth the gas to send it to an exchange. Many tokens will also never be worth anything at all, either because the project wasn’t serious or it just fails as a business.
Something to consider when beginning to venture into the world of airdrops is there are some scams out there. Below, I describe the most common airdrop scams I have come across and how you can avoid them.
- Dump Airdrops
Not all airdrops are focused on building value or community. In a dump airdrop, the goal for the developers is to generate short-term buzz about a token so that people will be eager to buy it when it hits exchanges. Once it does, the developers quickly sell (dump) all their tokens for a tidy profit. Once they have dumped as many as possible they just disappear and the project becomes inactive. Arguably, this is not a straight-up scam since the token is real. However, the goal is to create a situation where the developers benefit financially from dumping tokens they have no plans to develop further.
An excellent example of a dump airdrop was EDOGE in 2017. The EDOGE developers claimed to be trying to breathe new life into Dogecoin by creating a version on the ethereum blockchain. The project sent 5 million EDOGE to those who registered for the airdrop. The developers succeeded in creating a buzz. Yet, when the token hit exchanges airdrop recipients discovered their tokens were locked, which meant they weren’t able to send them. Meanwhile, hundreds of millions of EDOGE was being dumped on multiple exchanges. The strong suspicion was the developers were selling off all the tokens they had held back for themselves. The price of EDOGE quickly plummeted to a point where it became virtually worthless. The project was abandoned and its social media accounts went dead.
It can be hard to spot a dump airdrop but a good approach is to spend a bit of time with the project’s website and whitepaper. Typically, those behind a dump airdrop will not put much time into either and the superficiality will show through.
- Private Key Scams
Private key scams are airdrops that are entirely fake. They are designed to trick you into giving out the private key to your wallet. A legitimate airdrop asks participants for their wallet’s public address. A scam airdrop, however, asks for the private key to your wallet as well. Those who don’t fully understand how a crypto wallet works and/or how little you can trust people on the internet are most likely to fall victim to this scam.
Avoiding this scam is simple is easy. Do not give out your private key for any reason. If you are ever asked for it, be it on a form, a website, or through direct messaging, do not give it out because you are dealing with a scam. There is no reason a private key is needed for an airdrop. The only reason someone would ask for it is that they want to steal whatever is in your wallet.
- Information Tolling
Another type of scam airdrop I came across was designed to collect personal information, either to sell to third parties and/or to use for future phishing attempts. These scams claim to be giving away tokens but the projects are fake. The goal is to get your email address, wallet address, social media info, etc. While a bit less dangerous than private key scams, these are still very risky. I participated in some early on in my crypto career and noticed a lot of phishing emails coming through my inbox.
The best way to avoid an information trolling airdrop is to research the project that is apparently behind it. Most do not even have a website, let alone a whitepaper or social media presence. If a project has no website or whitepaper, any airdrop it is advertising should be avoided.
- Bait and Switch
I’ve also encountered what I like to call “bait and switch” airdrops. This scam lies in tricking you into signing up for other things so someone else gets referral credit. Sometimes the referrals are for other airdrops. In this case, you could be asked to sign up for “partner” airdrops. The reality is these are not partners. The airdrop form is merely a smart way for a scammer to generate referrals. Another version of this scam asks you to sign up to a specific crypto exchange so the scammer can benefit from a referral. Yet another version I’ve seen tries to get you to join pump and dump groups, often on discord or Telegram. In all these cases, the common denominator is the airdrop is fake and the form just a way of getting you to sign up for other things.
Bait and switch scams don’t cost anything, but they are an annoying waste of time. They can also be tricky to spot because legitimate airdrops do ask you to join social media accounts or register on their website. A bait and switch airdrop will ask you to sign up for other projects, create accounts on exchanges, or join a discord or Telegram group not explicitly dedicated to the project supposedly behind the airdrop. The best way to avoid them is to not participate in any airdrop that asks you to sign up to unrelated projects or social media channels.
Despite the caveats mentioned above, airdrops are a fun way of getting into cryptocurrency and finding out about new blockchain projects. Every once in a while an airdrop can also be hugely profitable.
My advice is just to hold onto to airdrop tokens on the chance they become valuable in the future, or at least worth enough to sell for a decent amount of BTC or ETH during the next bull market. I would also recommend taking a look at the project behind an airdrop to see if it has any chance of succeeding. If the project looks genuinely hopeless, I would pass, no matter how many tokens are being given away.