Last year, 2017, saw a mammoth rise in new companies using Initial Coin Offerings (ICOs) to launch. Selling tokens during ICOs is like selling shares in a business, but unlike the stock market, the company’s founder doesn’t relinquish any ownership rights. Instead, investors receive digital currency or tokens that they hope will increase in value, as they did with bitcoins, which are now worth (at time of writing) over $8,000 each.
As with the stock market, there’s risk involved when investing in these tokens. ICOs do not guarantee a return on your investment, although some unscrupulous ICOs do.
Recently, airdrops are changing the ICO landscape. Like ICOs, airdrops offer tokens and are accessible to anyone with a mobile phone or a computer. Right now, they are hotter than the Sahara Desert, and not just because, as I’m writing this, the Sahara is covered in snow.
What Makes Airdrops Special?
Firstly, airdrops are a way of distributing tokens for free. That’s right, free. And, surely, we don’t need to tell you how much people love free stuff. (I’ve got 20/20 vision, but even I’m tempted by online vouchers for free laser eye surgery.)
Usually with an ICO, you pay an amount of ETH, BTC or NEO for a number of tokens, but by registering for an airdrop, you can receive these tokens without investment.
Sometimes, additional interactions are required to participate. You might need to share a post, for example, or send a tweet containing a specific hashtag to qualify. Once that’s done, the tokens are yours. It’s money for nothing.
The tokens available from these airdrops are typically utility tokens, which can be compared in some ways to gift card points as they can be used to purchase access to software or a specific service from the company that originally issued them. Most coffee shops already employ a similar system of transactions.
Airdrops Sidestep Regulations
Another aspect of airdrops causing a buzz among the cryptocommunity is that, because they’re free, participants from countries which have banned ICOs (China/USA/New Zealand) are now able to get hold of these tokens. Although the authorities have banned their citizens from purchasing cryptocurrency, they cannot stop them from getting them for free.
Cryptocurrencies are disrupting the status quo. Worldwide, people are recognizing the benefits of a peer-to-peer electronic cash system, and it’s causing quite a stir. And why wouldn’t it? We’re talking about a system that gives the individual unrivaled control of their money, and it’s slowly starting to change the way we think about what money really is.
Airdrops make these cryptocurrencies even more accessible to everyone, and as a result, the community is growing.
Will airdrops replace ICOs? Probably not, but cryptocurrency has made democratic money a reality, and it looks like it’s here to stay. So, in the meantime, why not take advantage of the current surge in airdrops, and enjoy all the freebies whilst you can?
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.