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Money showing up out of thin air sounds to good to be true. Or crazy. But in the world of cryptocurrency nothing is strange or impossible. After all, you can read daily about new ICOs raising millions in a couple of minutes.

Let’s get back to money coming out of the air. Or sky to be precise. In the crypto world, this phenomenon exists and it’s called airdrops.

So, what exactly are crypto airdrops? In a nutshell, airdrops are free tokens dropped into your crypto wallet (mostly) for free.

Why mostly? While some free airdrops will give away coins without any demands, there are some airdrops that require you to complete small tasks.

It can be completing surveys, posting about the airdrop on social media, joining a Telegram group, etc.

To completely understand what crypto airdrops are and how they work, we’ll have to look into their history. So, let’s take a look back.

Short history of crypto airdrops

You’re probably wondering why these free coins are called airdrops. Well, that’s an interesting story. Airdrops got their name from a tactic used in wars and situations when soldiers or people needed supplies and food.

Because of difficult circumstances, these supplies had to be delivered from the air. To be more precise, they were dropped from an airplane. And that supplies are called airdrop.

crypto airdrops supplies
Airdropping

In the crypto world, airdrops brought a whole new meaning and purpose to the word. Despite that, the name stayed.

Then, in 2014, Auroracoin, which was supposed to be a digital currency of Iceland, went into crypto history by running the first airdrop. 50% of the total Auroracoin tokens were distributed to the citizens of Iceland.

Although the Auroracoin failed to become Iceland’s cryptocurrency, its airdrop opened a new chapter in the crypto history and airdrops distribution.

What do crypto airdrops represent for users?

Now that we know their history, let’s find out why crypto enthusiasts choose to participate in an airdrop, and why you also should consider joining.

First of all, airdrops are free coins, and everyone loves free stuff. With no or minimum effort you can have tokens dropped into your crypto wallet.

It’s also an opportunity to become part of the community and participate in a project from the very beginning. And these projects can distribute airdrops of great worth.

For example, Stellar partnered with Blockchain.com and decided to conduct an airdrop giving away a total of $125,000,000 in XLM tokens to their users.

crypto airdrops stellar
Stellar Airdrop

Some people even decide to take things to the next level and become airdrop hunters. This can turn out to be a serious source of income, and it’s the type of job you can do from the comfort of your home.

If you want to become an airdrop hunter, check out Airdrop Alert, where you can find verified airdrops to join.

Why do companies and startups decide to conduct airdrop campaigns?

crypto airdrops marketing

Did you know that airdrops campaign can be an effective marketing tool?Companies and startups can benefit from airdrops in different ways.

First, it’s a cheap way to spread the word about the project and increase awareness of the brand.

Also, it’s a great way to attract more users. People are more likely to participate in a project if they try it out first. Free and without risk. And that’s what exactly airdrops do, and they can do it successfully.

For instance, according to BitShouts, OmiseGo managed to increase its search interest with their airdrop campaign. The company airdropped 5% of the total issuance of OMG token to every ETH address.

In the chart below, you can see that the search interest for OmiseGo increased during the airdrop distribution.

Source

Plus, some high-profile crypto publications such as CoinDesk and CoinTelegraph wrote about the airdrop, increasing its online presence.

Conclusion

Airdrops are a win-win situation for both participants and for companies doing airdrop distribution. Why? Because participants receive their free tokens for a minimum amount of work, or often, no work at all.

On the other side, airdrops are highly effective marketing tools that companies can use to raise awareness of a project and create a network effect.