What is an Airdrop?

by Emily Huh

In the cryptocurrency world, an airdrop has nothing to do with airplanes flying overhead, using parachutes to drop supplies. Instead, while the humanitarian aid airdrop is a useful analogy, a cryptocurrency airdrop is a little different. These occur when a cryptocurrency project delivers coins or tokens directly into wallets, for free, in response to the wallet owner having taken an action.

In other words, the project leader gives away what amounts to free money hoping to build buzz. It can be seen as a way to build excitement and awareness or engagement with a project. Some of us may remember the olden days when banks gave away a free toaster with each new account. In present times, the equivalent is credit card companies giving bonuses for taking certain actions with a newly minted credit card.

To better understand, let’s discuss a couple of types of airdrops.

Bounty Drops: These are the most common type of airdrops and is a direct analogy to the bank giving a free toaster. In this case, a crypto project will announce on their website the terms of the airdrop. These might require folks to make a social media posting, join the project’s Telegram group, or other social media action. Or it might require holding a certain number of coins or tokens in a wallet for a given time period.

Holding crypto is another possible goal. Encouraging folks to Hold (HODL) can decrease the selling pressure.

Hard Fork: In August 2017 there was a hard fork of Bitcoin. Anyone holding BTC suddenly had some Bitcoin Cash show up in their wallet in an amount identical to their BTC holding. The hard fork meant a second blockchain, Bitcoin Cash, suddenly existed, and the newly minted BCH were owned by the wallet corresponding to existing BTC.

Generally, you must have an active online wallet to receive what is given away in the airdrop. Offline wallets won’t work.

The best way to learn about new airdrops is through one of the websites devoted to tracking airdrops. You can find these sites easily through DuckDuckGo, or other search engines, using phrases like “cryptocurrency airdrop” or “airdrop lists”.