What is Cryptocurrency Airdrop?
Cryptocurrency mining has popularized the term ‘airdrop’. The popularity of the listing of Notcoin and the massive reward received by members of its community, took far the news about crypto mining. Notcoin’s success story also made popular cryptocurrency projects like Hamster Combat and Tap Swap. This in turn increased the miners in the community in millions. This also popularized the use of certain jargon or terms such as wallet, phrases, withdrawal, token, ICOs, etc. Very popular amongst the many terms used is Airdrop. This piece is to make clear what the term ‘cryptocurrency airdrop’ stands for.
The term Airdrop is ambiguous. In a sense, it means the act of dropping supplies, troops, or equipment by parachute from an aircraft. As a verb, it also connotes the act of dropping by parachute. When used in virtual economy, it means the dropping of tokens or coins into wallets. Cryptocurrency airdrop is that marketing strategy or method that involves the sending of tokens or coins to wallet addresses.
Blockchain technology is one of the technologies that is utilized in creating virtual tokens. What happens is that when a new token is to be launched or listed, the creators would want to promote or create awareness about the token. So these start-ups make use a method of engaging members, to mine the coin or do tasks to make the coin popular. This can be by way of tweeting, posting, or even sharing posts about the token. This method or strategy of getting active members engaged to make popular the token or coin, bootstrap the project, and also reward them with the token, is what is known as cryptocurrency airdrop.
Before the coins’ actual listing, active members are allocated some of the tokens depending on how well they performed. The distributions could be in millions, or even thousands. Don’t be deceived by the figure. What matters is the cost of the token when listed. The reward is often given to active members when the cryptocurrency is listed on an exchange as an initial coin offering.
Credit: Ebi Robert
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