The how, what, & why of cryptocurrency airdrops - EcoFinBiz Blog

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The how, what, & why of cryptocurrency airdrops

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They say that there’s no such thing as free money—or is there? You’d have to be lucky for a random person to give you money or find cash lying around.

But in the amazing world of cryptocurrency, it’s not all that uncommon for money to be thrown your way. This may come as a surprise, especially for those who are just getting their feet wet in cryptocurrency investing. The closest thing to free money you can get is an airdrop of digital coins. This may not be the first time you’ve heard of this term before, but in this resource, you’ll learn everything you need to know about cryptocurrency airdrops.

What is a Crypto Airdrop?

In the cryptocurrency industry, the term airdrop isn’t the same as the conventional military definition. Basically, an airdrop functions as a gift to users of a coin, which comes in the form of free tokens. This involves a cryptocurrency project distributing digital tokens to their users without charging them anything.

You probably know about the jaw-dropping run-up in prices last year. This also marked the time when airdrops reached their peak popularity, with many investors, traders, and speculators eagerly awaiting news about what coins would be holding airdrops. For many beginners, this served as an excellent way to get more bang for their buck.

A Bitcoin Code review also shows that many users have investedtheir free tokens in the trading software to increase their potential returns.

Why Do Companies Hold Airdrops?

At first, it makes little sense for a cryptocurrency company or developer to distribute free coins. But this tactic has been proven effective in generating hype surrounding a blockchain-based enterprise. In most cases, they are used to reward the loyalty of their users. It’s a simple gesture of giving thanks for showing loyalty to the project. But many companies also hold airdrops for other reasons.

A fork in a cryptocurrency or the creation of a new network may also prompt a company to do an airdrop. A popular example is when Bitcoin users received Bitcoin Cash after the fork. Similarly, Ethereum holders received Ethereum Classic.

Decentralization is another reason for airdrops. They aid in boosting the level of security of a network and all its users. OmiseGo held an airdrop, forthis reason, stating that the introduction of their tokens to thousands of Ethereum users will make their network stronger and generate more interest in their coins and the technology behind their project.

How to Find Airdrop News and Claim Your Free Tokens

By now, you’re probably feeling excited to get in on the action. But how and where can you find news about airdrops? Several websites now gather news about airdrop information. You can also check out popular cryptocurrency discussion boards such as BitcoinTalk to get updates about airdrops from different projects.

Take note that in most cases, you need a non-exchange wallet to claim your free coins. The clear majority of airdropped coins are based on the Ethereum ERC-20 protocol. Your digital address will be verified to make sure that no one person will generate multiple addresses and hoard a boatload of free tokens.

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The how, what, & why of cryptocurrency airdrops

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