Hey guys, I’m Angelo and welcome back to
Crypto Coin Consultants.
Today we’ll be discussing airdrops.
But first, answer this quiz question:
How many Stellar Lumens coins were allocated
to be given away for free during their first
airdrop?
19 hundred, 19 thousand, 19 million, or 19
billion?
Let us know in the comments section below
& stay tuned till the end of this video to
find out the answer.
4.
What is an airdrop?
Airdrops are just another term for free tokens
or coins.
It’s an effective way for companies to market
their coin by suddenly making the masses aware
of it when it appears in their wallets out
of nowhere.
Doing so increases awareness of the coin in
an attempt to also increase its value.
People tend to personally value coins they
own over coins they don’t own due to what’s
known as the “endowment effect.”
There are currently over a thousand coins
listed on coinmarketcap.com, and it’s hard
to keep track of them all.
By airdropping a coin into your wallet, it
tends to stand out more in your mind amongst
the rest of the competition.
The amount of coins you receive from an airdrop
vary, but most of the time you have to be
holding coins of a relevant blockchain.
Take OmiseGo for example.
In September of 2017, close to half a million
Ether holders who held a minimum of 0.1 Ether
the previous July were given 0.075 free OMG
tokens for every Ether they held in their
wallets.
This, among other things, played an effective
role in the project’s marketing efforts
& OMG is now ranked among the top 30 coins
based on total market cap.
3.
How can I participate in an airdrop?
As I stated earlier, you have to be holding
coins of a relevant blockchain in order to
be eligible to receive free coins.
Most ICOs for example, are ERC20 tokens, meaning
they’re built on the Ethereum blockchain.
So like OmiseGo, you have to be holding Ether
in your wallet to receive free ERC20 tokens.
Conversely, if the project is based on the
Bitcoin blockchain, you have to be holding
Bitcoin.
The timing of the airdrop can be announced
beforehand or can be random (as is the case
with Waves and Komodo).
In order for an airdrop to occur, a snapshot
of the blockchain is taken at a predetermined
date & time.
Anyone holding relevant coins at this time
is entitled to a portion of the allocated
amount of free tokens.
In our previous case of OMG, the snapshot
occurred on July 7th, 2017 at block 3,988,888.
But the announcement of the airdrop wasn’t
made public until August, and the OMG coins
weren’t distributed until September.
Sometimes, announcements made beforehand can
have a huge impact on the value of the relevant
coin.
For example, in early December of 2017, Nxt
announced an airdrop of the Ignis token to
all Nxt holders.
This led to a massive surge in the price of
Nxt to over six times its original value over
the course of the upcoming days & weeks.
Once the snapshot was taken & Nxt holders
were accounted for, the value of Nxt tanked
to a fraction of its pumped price, which was
also the coin’s all-time high.
Moral of the story: be careful when stocking
up for free coins because doing so can burn
you!
The number of coins you receive can sometimes
be a fixed rate, while other times it’s
determined by how many coins of the relevant
blockchain you hold (like in our OmiseGo example
of 0.075 OMG for every 1 ETH).
I have to warn you though that although some
exchanges will honor the airdrop, there are
some that won’t.
One way of ensuring with 100% certainty that
you’ll be receiving your free coins is by
holding the relevant coin in a wallet to which
you own the private keys.
You do not own the private keys to an exchange.
In the case of Bitcoin, this means sending
your Bitcoin from the exchange to either a
hardware wallet (like a Ledger or Trezor)
or to an online wallet (like blockchain.info);
an example of an online Ether wallet would
be myetherwallet.com (also referred to in
the crypto-community as MEW).
2.
What do I do with my airdrops?
As you may have already figured out by now,
airdropped coins are essentially free money,
and what you decide to do with them is up
to you.
Many of the coins that perform airdrops would
have just recently wrapped up their ICO and
therefore, the tokens aren’t immediately
available to trade on any of the major exchanges.
That said, there are still a number of exchanges
you can trade them on, and for some, it’ll
only be a matter of time until they’re listed
on a major exchange.
Once listed, liquidity is much higher since
the tokens are exposed to larger trading volumes.
This also means more room for growth in the
coins’ value due to awareness, speculation,
or other factors.
1.
More free money
While we’re on the topic of free money,
it’s worth mentioning bounties.
Bounties are another way for you to earn free
coins.
Rather than having to hold a coin from a relevant
blockchain, you can earn coins early on during
its ICO or pre-ICO stages.
The coins are earned by performing designated
tasks to help improve the project: be it translating
their website to another language, finding
bugs within their system, or even promoting
it on social media if you have a big enough
following.
Yes, that means a simple Tweet can earn you
coins if your fanbase is deemed large enough
by the token team’s criteria.
You can find out more about an ICO’s bounty
programs by visiting their ICO announcement
page on the bitcointalk.org forum.
So how many Stellar Lumens coins were allocated
to be given away for free during their first
airdrop?
If you guessed 19 billion you’re right!
19 billion tokens comprises roughly 19% of
the initial Lumens supply, although not all
tokens were claimed.
At the time of this recording, the Stellar
Lumens all-time high peaked at roughly 92
cents.
This means that the value of their allocation
for this initial airdrop would have–at one
point–been worth over $17,000,000,000!