CryptoURANUS Economics: Airdrop: defined in CryptoCurrency


Thursday, May 6, 2021

Airdrop: defined in CryptoCurrency

Airdrop: defined in CryptoCurrency

Airdrop (cryptocurrency):
The term Airdrop: defined in CryptoCurrency is as follows. An airdrop is defined as the process of freely distributing a new cryptocurrency to people hopefully creating more demand.

When a new cryptocurrency is created, it needs to gain users. One way of doing this through an airdrop.

The group issuing the airdrop hopes new users will begin researching and sharing the coin creating more demand. 

To start an airdrop, the crypto group will often find people who already have another cryptocurrency and identify them as being equipped with wallets that can accept these airdropped coins.

Their other option is to have people voluntarily complete a form where they will then receive their coins.

NOTE: Beware of any website that asks for your private keys. DO NOT share your private keys with anyone unless you trust them with your money!

An airdrop is a distribution of a cryptocurrency token or coin, usually for free, to a large number of wallet addresses. 
Airdrops are primarily implemented as a way of gaining attention and new followers, resulting in a larger user-base and a wider disbursement of coins. 
Airdrops aim to take advantage of network effect by engaging existing holders of a particular blockchain-based currency, such as Bitcoin or Ethereum in their currency or project. 

There are two ways creators distribute their tokens: by selecting recipients at random, or by publishing the event in airdrop-related bulletin boards or newsletters. 
Often, random Ethereum accounts with value above a certain threshold will receive various unsolicited airdropped tokens. 
Many websites now exist which promote cryptocurrency Airdrops, and social media is a great place to read about upcoming Airdrops.

Cryptocurrency enthusiasts can gain free cryptocurrency by supporting projects who release coins through an Airdrop. 
Often, Airdrops will have requirements such as joining a Telegram channel, retweeting a tweet, or inviting new users to the project. 
Should the participant have to contribute capital towards the project, then this is not considered an airdrop.

Airdrops can be considered[by whom?] a very effective and common marketing strategy among new cryptocurrency projects. 
Its goal is usually to spread the word about a certain product, coin or exchange in the world of cryptocurrencies.
[citation needed] Additionally, the new token-holders are incentivized towards the success of the project due to owning a certain number of coins themselves.

There are many guides available for users wanting to join cryptocurrency airdrops.

Lately[when?] this strategy has become increasingly important to the larger cryptocurrency community due to the effectiveness of the strategy, as well as unwanted/spammy[clarification needed] advertising practices. 
Because of this unsavory reputation, many social networks, most notably Facebook, are now refusing to allow ads promoting various virtual coins.

In the United States, the practice has raised questions about tax liabilities and whether they amount to income or capital gains.

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