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How to Make Money on the Distribution of Free Coins

How to Make Money on the Distribution of Free Coins

Articles / 2018-10-19 13:13 PM

Airdrop is the distribution of free tokens or coins by the blockchain platform. The only condition for access is the possession of coins of a suitable platform. Today we would like to tell you whether it is possible to consider a free distribution of coins as an investment tool and what types of Airdrop exist.

Let us first start with the types of Airdrop

There are several types of Airdrop - automatic and stimulating are two main of them.

Automatic Airdrop may occur as a result of forks. For example, bitcoin cash is a bitcoin fork, and owners of an originally existing currency are entitled to receive a new one in an amount equal to their existing assets. In such cases, the distribution of coins is automatic: the main condition is the ability of a wallet to support new coins.

Protocol developers fall back to free distribution for several reasons: they want to raise awareness of the token, to attract the attention of the holders of the "currency before hard fork" (as in the cases of Bitcoin Cash and Bitcoin) and thereby to form a community around the new cryptocurrency. However, such a policy does not always work.

First, it does not provide an opportunity to collect information about currency users and to create a portrait of a potential buyer.

Secondly, currency holders often do not know that in addition to the assets they have purchased, there are free tokens in the wallet.

Stimulating Airdrop is a kind of reward for users for their actions that promote blockchain projects - a repost on the project activity, joining the community, like or any other form of social activity. Such Airdrop often takes place in a game format, involving the audience by means of the idea of getting cryptocurrency for free with minimal effort.

There are also forms of Airdrop, to participate in which you need a certain amount of this or that cryptocurrency in your wallet. For example, to participate in the distribution of Byteball, OmiseGo and Stellar lumens a user needs a confirmation that he or she owns a certain amount of bitcoin or ether.

How does it work?

At the pre-announced time, the Airdrop project indicates the amount of cryptocurrency on the user's account required to get free coins. For example, Bitcore has fixed a balance required for distribution of more than 0.01 BTC, and now all wallets with the specified amount may go after free coins. If the user's wallet has more than 10 BTX, he or she receives a weekly 3 percent bonus in addition to distribution. Byteball distributes coins weighing 1 Gigabyte for every 16 bitcoins in the wallet. Airdrop of lumens (Stellar Lumens cryptocurrency) is available to all bitcoin holders.

To participate in smaller Airdrop, a user often needs to contact a team member on the Bitcointalk forum or in social media. This form of distribution has become more popular since September 2017: to participate in it, a user needs to fill out a Google form with indication of an email, a link or a nickname in the Telegram and Twitter as well as the address of the wallet to which free tokens will be transferred. This format is often used for new crypto projects that use advertising campaigns as a marketing strategy.

Another way to get free digital coins is bitcoin faucets i.e. sites that give registered users a certain amount of cryptocurrency for a certain period of time.

What to do with the coins obtained?

Sometimes it turns out that the tokens obtained as a result of Airdrop are not traded on the exchange. In this case, a user should just keep them in the wallet and wait for the appearance of a new currency in the market. If the coins are present on the exchange, a user may see their real value and assess how profitable to sell them at the moment.

Where and how to find upcoming Airdrop?

The information on upcoming Airdrop may appear on the BitcoinTalk, Reddit and Quora forums in the corresponding topics. A user needs a BitcoinTalk account to participate in most of the Airdrops.

There are also specialized portals, such as Airdropalert.com, where a user may find all the necessary information. Thanks to the user-friendly interface, you may see the upcoming, active and past distributions.

Danger!

Fraudsters may use the platforms meant for the distribution of free coins for their purposes. That is why, perhaps, the most important thing is to remain vigilant and not to share passwords from your digital wallets on side resources. Also, do not download suspicious wallets of projects that you do not know or do not trust.

And let us give you some more practical guidance:

  • Create a new email address for Airdrop or use an email box that doesn't contain any important information;
  • Don't give your secret key to anyone (if Airdrop requests the password from your wallet, this is for sure a veiled fraudulent scheme);
  • Be careful with downloading wallets from the platforms, you don't trust;
  • If Airdrop asks to pay a small amount (often 0.001 ETH) it is scammers again, as Airdrop distribution is always free.