You’d have to be living under a rock to have not heard of cryptocurrency, or at least bitcoin, even though recently, some social media providers, like Facebook, have blocked advertisements and other related media.
Airdrops are the newest, hottest thing in the cryptocommunity and, once you know what an airdrop is, it’ll be easy for you to see why.
An airdrop is not an Initial Coin Offering, although both are methods of token distribution. However, in an ICO, a company releases a limited number of tokens for general sale and is a fundraising method to give companies a solid start.
In some countries, ICOs have been prohibited and their citizens aren’t allowed to purchase these coins. The difference with an airdrop is that these coins are free, which allows people from those countries to participate in token distribution.
What’s the Catch?
There has been a lot of FUD in the media regarding cryptocurrency, and without reading closely around the subject it might be tempting to completely dismiss the idea.
With an airdrop there is no catch, there is no investment required from you. Airdrops are basically money for nothing. This does sound too good to be true, but the companies that issue them still benefit.
These tokens act as a reward for people who, in joining a company’s crypto community, have helped that company get started. It’s like being involved in a kickstarter program that doesn’t ask you to put your hand in your pocket.
Any token can be sold and, just as the same as if you paid for them, they’re not guaranteed to be worth megabucks in the future. They could be, though.
Most people who acquire tokens through airdrops use them to access the software or services provided by the company that originally issued them. If you’ve ever used a gift card in your local supermarket, coffee shop or bookstore it’s the same basic principle.
Why All the Fear?
As with all cryptocurrency, tokens acquired in an airdrop can be sent, received and spent anonymously. Some have pointed out that this could be used to fund crime or to scam innocent people out of money, but this outlook doesn’t consider that fiat currency has always been abused in the same way, too.
Exchanging paper money down a back alley is also anonymous, but we don’t worry about handling money as a result.
For sure there are risks, and there will always be people looking to corrupt something to suit their own ends, but these bad actors in the cryptocommunity are mere drops in the ocean.
Essentially it boils down, as is usually the case with innovation, to our natural fear of the new and the unknown. Crypto has offered the world a different way to think about what money means, and it has got people talking.
Airdrops are the next step in an innovative community that, although still in its infancy, looks set to change how we all deal with and perceive our money.
Michael is an English and Creative writing graduate of Liverpool John Moore’s University, a former editor of several magazines, and a crypto-currency enthusiast. He is mostly interested in crypto-legislation and the potential of decentralized technology to change the world.