The Anatomy of Airdrops: It’s Merits & Demerits

If you are involved in the crypto space, thereÔÇÖs a 99.99% chance that youÔÇÖve come across the term ÔÇô Airdrops! Now, upon hearing the world ÔÇśairdropÔÇÖ, a surreal image of a military aircraft dropping supplies from the sky may come to oneÔÇÖs mind, if this is your case, then donÔÇÖt fret, you arenÔÇÖt far from the truth.

In the world of crypto, an airdrop isnÔÇÖt the story of hungry soldiers delighted to see food and weapon supplies falling from the sky, rather, it is the story of developers trying to spread word about their coin by giving it out for FREE to as many people as possible.

Why would a developer give out his/her coin for free after working so hard on it?

The answer is quite simple!

The whole idea behind airdrops stems from the popular belief that the more users a crypto has, the more valuable it will be. So, airdrops are a way for developers to create awareness about their coin, and to get a lot of people involved.

So it is a win-win situation for everybody; the developers who will get more people involved with their coin, and the airdrop collectors, who will get a crypto for free, which may increase drastically in value after it gets listed on exchanges.

Since airdrops are basically free food, could there be any side effects to participating in them or collecting these coins?

WeÔÇÖll get to that in a moment, but first, let us look at the bright side of things.

The Merits of Airdrops

– ItÔÇÖs FREE Money!

Anything with the tag ÔÇťFREEÔÇŁ on it will go viral these days; itÔÇÖs not that hard to see why doing airdrops is often the go-to marketing strategy amongst developers. Collecting an airdrop helps you get a coin which may become extremely valuable in future for free! Imagine if you gathered a ton of NEO when it did its airdrop, and you held onto the coinsÔÇŽ. How much will all that be worth now? See my point?

– It encourages involvement

For the developers, airdrops are awesome not because they get to give out coins from the goodness of their hearts, but because it helps create awareness and encourages a lot of people to get involved in promoting the cryptocurrency. Gaining a broad audience and participators is one of the primary goals of developers, and airdrops help pave the way for this.

– It is easy to collect

Now, most airdrops will ask you to carry out a little task to get the coins. These tasks are usually promotional activities and may involve you posting the developerÔÇÖs links on your Facebook page or getting more people to sign up to the developerÔÇÖs website. As we stated earlier, the developers want to increase their audience, so they will use the airdrops to entice you to help them in this regard. Most of the tasks required to pick up an airdrop are relatively easy to accomplish.

– It helps attract Investors and Reduce Market Budget

As the treat of getting free coins is dangled before crypto users, many of them will flock to the coin, and this would help boost the viability of the coin. In turn, it will help attract investors, as they will see the coin as something that has value or the potential to be highly valuable in the future.

The Demerits of Airdrops

– Scams!

As we mentioned earlier, the word ÔÇśfreeÔÇÖ has a desirable quality to it. Scammers are well aware of this and will utilize airdrops to gain access to peopleÔÇÖs crypto wallets and withdraw all their funds. This is why proper research must be done before signing up for any airdrop. Beware of developer sites that request for personal details like your private keys!

– Hefty Requirements

We said that airdrops are fairly easy to collect, well, not all of them. Certain airdrops may ask you to bring people into the community and reward you with tokens for each person you bring. This is known as the referral system and may require you to bring from 10-20 people before you can get a tangible amount of free coins. The developers essentially place the burden on you to go and market their coin to your friends which may not only be stressful but may also blow back on you, if your friends invest in the coin and it ends up failing.

Other hefty requirements may involve you holding other cryptos in certain types of wallets or continuous claiming of coins every hour via a telegram bot. Not everybody has the time or patience to be fixated on their phone just to claim a meager amount of coins every hour.

– Undervalued & prone to dumping

It is true that when we get things for free, we tend not to appreciate its value, this can also be ascribed to airdrops. Collectors often get airdrops and dump them as soon as it hits the market. This massive dumping can lead to fluctuation in the coinÔÇÖs value, aside from this, the dumpers often regret their action when the coinÔÇÖs value shoots up by several miles in the months ahead.

– Too many airdrops!!

Since cryptos came to the limelight, hundreds of developers have jumped on the bandwagon and tried to capitalize on the crypto craze by coming up with their own coins. This has led to a rise in the amount airdrops in the crypto space. Hundreds of coins do airdrops every month, keeping up with all of them can be a real headache, as each of these developers will require you to sign up and promote their coins in different ways.

– Loss of coins collected

Because of the volatility of airdrops, the number of people signing up for the freebie, and the stress weeding out good participants from bad ones, some honest collectors might not end up getting the coins in the long run. Yes, you got that right; I did say weeding out good participants from bad ones! Developers have noticed that a lot of collectors have taken advantage of referral systems by creating multiple accounts so that they can collect more coins, due to this ÔÇścriminalityÔÇÖ, many developers will undertake a scrutinizing process after the airdrop campaign, this is done to weed out those who used bots or created multiple accounts. Unfortunately, during the so-called weeding out process, honest guys may get ÔÇśaccidentallyÔÇÖ grouped with the evil dudes and if this happens you will not get your coins because you will be blacklisted!

In summary, airdrop is the process of giving out free coins to help promote the cypto, increase awareness and grow the community. Most of the time, airdrops can be collected by participating in activities that help promote the coin.

When we look at it this way and try to quantify the time we spend on signing up and promoting the coin, we have to ask ourselves, are airdrops really free??

While you ponder on this, I’ll leave you with a quote from Robert Heinlein.

‘Nothing of value is free. Even the breath of life is purchased at birth only through gasping effort and pain.’