28 Jun 2021 10:29 AM +00:00

What Is A Crypto Airdrop?

Aside from buying and trading cryptocurrency, participating in a crypto airdrop is another way to earn digital currency.

With the attention given to the likes of Dogecoin, SHIB, Litecoin, and many other cryptocurrencies, it's no surprise to hear that the amount of new cryptocurrencies releasing each year is huge.

But, with so many other coins on the market, how do some coins compete? Here's the lowdown on one technique, known as crypto airdropping.

What is a Crypto Airdrop?

A crypto airdrop is a marketing tactic in which cryptocurrency is sent to wallets as a means to promote the currency. This exposure, the creator's hope, will see the cryptocurrency gain further attention and increase in price.

Donating or gifting coins does not just take the form of airdropping. Shiba Inu Coin donated 50% of its total circulation to Ethereum co-founder Vitalik Buterin when it launched.

While these coins are often sent to addresses for free, they may come after doing certain tasks. These include sharing the coin on social media or signing up for a site/newsletter via email.

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However, some airdrops are not available to everyone, but only for existing holders of a certain currency. This can include holding a certain amount of currency on the Ethereum or Bitcoin blockchain that the new currency also exists on.

It is also important to distinguish crypto airdrops from hard forks. While hard forks and airdrops share similar traits, hard forks reward holders when a split in the blockchain creates a new coin - such as BitcoinCash - rather than a new coin.

Biggest Crypto Airdrops

The largest crypto airdrop occurred in early 2016 when the developers of Decred airdropped 258,000 DCR.

Over 3200 applicants received 258.9 DCR. With DCR worth $128.33 at the time of writing, this is now worth approximately $33,483 (via CoinMarketCap).

READ MORE: What Is Bitcoin Halving?

[Featured Photo by Executium on Unsplash]