A lot of governments are trying to regulate or censor cryptocurrency but closing doors on them only leads to new and innovative pathways to get around these obstacles. In fact, people can fly over these obstacles and drop them out of the sky – an airdrop.
Airdrops are free cryptocurrencies and tokens waiting to be claimed. As part of their initiative to spread the word, blockchain companies and startups have set aside a portion of their crypto-assets to do several of those –basically free coins for the taking.
Airdrops as an Effective Marketing Tool
Businesses use different strategies to get customers, but there is one particular method which always seems to make an impact regardless of the industry they’re in. Giving something valuable for free would almost always elicit a positive response from potential customers.
In the context of blockchain businesses, an airdrop is the equivalent of giving away product samples or gift cards to encourage buyers and users to take the next step. It might be as simple as coming back to learn more about the cryptocurrency or ICO (creating traffic to the website) or spreading the news about an airdrop. If the project seemed very promising, they might choose to join the ICO or buy more tokens to qualify for upcoming airdrops.
Airdrops have already been used for quite some time to raise awareness about a blockchain project or startup. They’re becoming more widespread as blockchain businesses move away from online and social media advertising and adopt censorship-free promotions. People can get information about airdrops from airdrop hosting sites like Airdropalert.com, Airdrops.io, ICOdrops.com, and forum sites like Bitcointalk.
Airdrops Target Specific Users
Despite recent advances in A.I., paid advertising is essentially a hit-and-miss strategy. Airdrops increase the likelihood of user engagement because they only target specific users. People who come to airdrop hosting sites might have learned about them through word-of-mouth, or they might have stumbled upon airdrops out of their own curiosity.
The target audience are most likely users with some experience dealing with cryptocurrencies. They’ll have their own Bitcoin, Ethereum, or wallets that support multiple currencies, and have already used them for quite some time. The other part are newcomers who wants to learn more about cryptocurrencies and get some free coins.
The chance of having successful adoption for every airdropped cryptocurrency or token is a lot better than if they were spent on paid advertisements which are a lot more expensive and don’t guarantee success. Think of it in terms of how Costco built their business. They didn’t (and still don’t) spend a lot of money on commercials or advertising. This ensures they keep their prices competitive with other large bulk discount stores. Instead, they use free samples of cheese, condiments, salad dressing etc as an incentive to increase sales and transactions in the store. Essentially airdrops allow crypto companies to become the next Costco.
How Airdrops Work
Airdrops use a different cryptocurrency or token (usually Bitcoin, Ethereum, or ERC20 tokens like EOS) as giveaways to promote their own. Blockchain startups and ICOs rarely publish airdrops on Google or Facebook, if at all. They’re usually listed in airdrop hosting sites where users can check the status of the airdrop and provide links to these sites.
There are basically three ways to airdrop.
Taking snapshots of the blockchain. Blockchain projects will set a date for taking snapshots of the blockchain. If you happened to make a Bitcoin or Ethereum transaction during the snapshot, you might soon find some free cryptocurrencies or tokens sitting in your wallet. In most cases, people are aware about the airdrop and learned them through airdrop hosting sites.
Requiring users to sign up for the airdrop. Some airdrops will require information about the recipients, especially their wallet addresses, emails, telegram, or twitter accounts. It’s basically a marketing strategy to get more users onboard and start a community. Unfortunately, not all airdrops are real or have value; some are used as a ploy to get information from users. Steer clear from airdrops asking for sensitive personal information or private keys.
During a hard fork. Blockchain projects can create free coins by forking an already existing blockchain. They usually have a community working on a blockchain project based on the original. Users get an equivalent amount of “free coins” depending on how much they own prior to the fork. They’ll get free cryptocurrencies tradable for fiat every time the blockchain forks. Bitcoin has had three forks since 2017: Bitcoin Cash, Bitcoin Gold, and Bitcoin Private.
Some airdrops will incorporate a referral system where users get additional coins free for every successful invite. Others require users to have a specific amount of cryptocurrencies or tokens to become eligible for the airdrop. Dapps which are set to launch on the EOS blockchain once EOS migrates from the Ethereum blockchain will give away tokens based on the amount of EOS tokens users have.
Cryptocurrency companies will always have a plethora of ways to market and promote themselves. But whatever strategy a company chooses, airdrops should like be included in that strategy, especially with the constant updates to advertising rules on Facebook and Google. In fact, online and social media advertising might no longer be a huge traffic driver even if these companies choose to lift the restrictions on cryptocurrency. Try as they may, there seems to be no limit on the number of ways cryptocurrency communities can innovate and stay censorship-free.