In the world of cryptocurrencies, an “airdrop” is the distribution of free coins to specific coin addresses.

Usually there are two common scenarios of airdrops.

a) The airdrop because of a blockchain fork, by coins that have been launched without their own genesis block. In this case, the new coin is using special rules distributing the new crypto to owners of other coins. This way , the owner of other coins are getting the ”newborn” coin with an airdrop to specified new addresses. This way, the new cryptocurrency is getting exposure with the already well-known older cryptcurrencies which are used as a staking – requirement in order to receive the one that is their fork.

b) The airdrop of a coin with its own genesis block : This is happening with coins which had their own independent beginning but they usually have a big premine ( large percentage of the coins are held by the founders in specified addresses ). This way, the founders can sometime take the decision to airdrop a fraction of their holdings in specified addresses , trying this way to gain exposure by advertising that they intend to give “Free Funds” to everyone.

 

In both scenarios, the airdrops have been proven to be a common advertising tool, however their effectiveness is very low, often leading to instant sell-offs and depreciation of the airdropped coins.

This is quite logical because in every case, the owner of the coins has done absolutely nothing in order to obtain the airdropped cryptocurrency and he knows this fact himself, so it is extremely hard to be persuaded that this coin is ever going get any serious valuation!

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