Airdrop in Cryptocurrency – Experts Information

Airdrops are carried to provide essential supplies to people trapped in the areas affected by some kind of natural disaster. Airdrop is also a file transferring feature that comes with all Apple devices. But in the world of cryptocurrency, airdrops have a completely different meaning.

Airdrops, in the cryptosphere, can be define as the process by which a cryptocurrency enterprise distributes crypto currency tokens to the wallets of some users or crypto currency holders free of charge. In short, airdrops are free money. Airdrops are usually carried out by startups based on

Blockchain to bootstrap their crypto currency projects. Crypto currency exchange platforms as well as wallet services which are establish enterprises base on Blockchain can also carry out airdrops for various reasons.

Tough Competition in Cryptocurrency

There is a lot of competition in the crypto market as every day a company launches its ICO or Initial Coin Offering. It is much harder to stand out with the over saturated condition of the market right now. It is difficult for the companies to get investors for the new crypto currencies.

So, instead of callously using paid promotions to advertise. The team behind the new ICO can simply look at the Blockchain of an already established token and gather up every person who has that particular coin in their wallets. This is another advantage of open sourced Blockchain in the crypto world.

They will then distribute or allocate an amount of their token in proportion to the amount that the user holds. A split of an existing coin can also grant you an equal amount of the newly launched coin.

Lengthy tasks for completing airdrops

If a company sends some of their token to your wallet and you notice it. It might prompt you to look into their project more and if you like the project. You might decide to invest in them. It’s technically free marketing for the token sale or coin launch. It costs the company nothing to provide these tokens to you but could really help them with brand recognition.

This can understand by how Instagram or other social media users connect with various similar accounts. Those who like viewing content similar to what you post. The airdrop process often involves a set of tasks. A user needs to complete in order to get the new tokens or money in their wallets.

Decentralization of the tokens

Another reason behind why companies give out free tokens is to help with the decentralization of their currency. A recent example of this was Omise Go who airdropped large numbers of their tokens to Ethereum holders shortly after their successful ICO.

The statement was that tokens are most useful when they are as widely distributed as possible. In the case of a proof-of-stake (PoS) network without permission. Especially one running a very economically valuable decentralized exchange trading both crypto currency. As well as real world money in terms of fiat currency or assets. A wide distribution is also critically important for network security.