What are Cryptocurrency Airdrops?

A complete guide on what airdrops are and how they work

Crypto airdrops are slowly but steadily becoming an integral part in the world of cryptocurrencies. For many projects, they are a way to reward users for their support and commitment to their ideas. Let us take a look at how airdrops work and what they are.

What is an Airdrop?

Airdrops can be quite tricky to understand. Ultimately they are a free utility token distribution to users who are following an ICO project. However, some airdrops can happen even when there is no ICO taking place at all. In short, they are a marketing tool designed to help gain excitement around a project. Distribution of crypto in airdrops is free and you can get these free coins while sitting in any geographical location of the world; providing they are are not deemed securities in that jurisdiction.

However, in order to receive these airdrop tokens, you must pass a Know Your Customer (KYC) process. This is part of regulation to ensure that these tokens are distributed to legitimate actors in the space. Users must provide a wallet address in order to receive the tokens from the project and carrying out the KYC process helps to verify all users.

Now that we know what is an airdrop in Crypto, let us find out how they work.

How do Airdrops work?

Airdrop crypto is a wonderful way to capture and retain the imagination and interest of potential investors who would have otherwise turned a blind eye to an early-stage launch or ICO. Every month, you can find dozens of fresh ICOs in the market. Airdrops are used by emerging as well as established names in the world of cryptocurrency to differentiate fresh tokens from the rest.

What are Airdrops for?

Fintech (financial technology) startups in the segment of cryptocurrency make use of airdrops to market their projects and generate a buzz among potential investors. Those interested in getting free airdrops are expected to complete certain tasks before qualification. Interested users are required to complete their assigned tasks ahead of the airdrop date and provide their wallet address to receive airdrop cryptocurrency.

So, what are the benefits of cryptocurrency airdrops?

Benefits Of Cryptocurrency Airdrops

  • Cryptocurrency airdrops are extremely useful to generate the much-required hype about new ICOs and projects.
  • Airdrops can be fundamental to utility token ICOs and utility token projects as they help them to offer access to a much wider audience. It helps these projects to gain new members, contributors and users which ultimately leads to a high level of engagement within the community
  • The cryptocurrency community has a proven record of rewarding investors who make commitments to newly-introduced tokens at an early stage. Rewards lead to more business and trust.
  • Crypto project marketers and promoters make use of airdrops as an effective way to generate leads. They gain quick and easy access to data on lots of potential investors and individuals. This data can be used legitimately by them to gain leverage in future campaigns.

Why would a company give me tokens for free?

In a way, airdrops can easily be compared to branding and promotional efforts of traditional brick-and-mortar or other businesses at an exhibition or trade fair. The only difference is that you get free airdropped tokens or coins by promoters and marketers of cryptocurrency projects instead of free T-shirts, pens, samples and other merchandise that are usually gifted by brick-and-mortar businesses.

In a nutshell, an airdrop is a form of marketing to get the word out. Registrations are closed after a few thousand people have provided their consent and signed up for airdrops. Then, the process of token distribution is initiated. Now, there are thousands and thousands of people in the world of cryptocurrency who are trading, holding, and spreading the word about it to their family, friends, relatives, colleagues, fellow investors, and more. People who have signed up for the airdrops also have an opportunity to exchange their tokens or coins for money.

How to find information about cryptocurrency drops?

Information about cryptocurrency drops can be found within the cryptocurrency community. You can even find airdrop explained through Airdrop crypto meaning, Airdrop crypto functioning, and ICO airdrops on cryptocurrency forums. Additionally, you will find information on topics such as Altcoin airdrops, token airdrops, Altcoins, and Bitcoin airdrops on social media channels.

Twitter and Telegram are two of the most popular sources of finding information on how to get started with cryptocurrency airdrops. Other popular social media platforms are Reddit, Facebook groups, and the Bitcointalk forum.

Are airdrops free?

Yes, in a big way. Usually, interested users are just asked by promoters of an early-stage launch or initial coin offering to follow a predefined link to a specific cryptocurrency airdrop. They are then asked to complete a KYC process as previously mentioned.

Once this has been done, they have to perform a certain number of tasks on social media channels like subscribing to a Telegram channel, sharing posts on Facebook, or simply follow them on Twitter. Thereafter, users are usually asked to provide their Ethereum address and the last step is their tokens being airdropped

Are Airdrops Safe?

Coin airdrops are very safe! However, you must still emphasize the highest standards of Airdrop security, privacy, and confidentiality. For this, you should avoid sharing your private keys to airdrops. Moreover, it is important that you make sure that the airdrop has a legitimate website, a whitepaper, and a reason good enough to exist in the first place. Reading reviews, feedback, complaints (if any) about the promoter or marketer or the project beforehand is advisable.


The popularity of cryptocurrencies is growing with every passing day. Crypto airdrops, just like cryptocurrencies, are here to stay.

Bad news; the scams surrounding them are growing too. Therefore, you must thoroughly educate yourself on the subject and the functioning of airdrops and cryptocurrencies.

Remember, no legitimate airdrop will ever ask you to send funds or for your private key at any stage of the airdropping process (before, during, and after).

The cryptocurrency industry takes great pride in being unregulated and you should never allow this advantage to become a disadvantage for you.

Don't ever take a decision in haste. Always go an extra mile to examine the truth behind claims!