An introduction to airdrops

November 10, 2023

An introduction to airdrops

The world never stops evolving, the wonders of airdrops are just magnanimous. In airdrops, tokens are typically allocated to holders of a preexisting blockchain, like Bitcoin or Ethereum.

It is peculiarity, buzz, and fuss that create confusion about the difference between an airdrop and a hard fork. In each case, it`s common for holders of a prior digital currency to be given new tokens, typically in an equivalent volume to their current holdings.

In an instance of a Bitcoin hard fork, for instance, holders of Bitcoin were given an equivalent amount of Bitcoin cash tokens at a time designated by the developers of the fork, for later an airdrop takes place primarily as a means of boosting recognition for a new token or coin.

As a holder of Bitcoin and Ethereum, you may be surprised to see the addition of new currencies to specific wallets (these mostly happen unexpectedly). Some in the digital currency community find airdrops of this type to be largely a waste of time, as many of these free giveaways end up creating a surplus of coins in the market.

Airdrops and hard forks are similar in some ways, and, at times, this has led to confusion among cryptocurrency investors.

The first, a hard fork occurs when there is a permanent split in a blockchain while an airdrop occurs when a new cryptocurrency token is deposited directly into users wallets. If a virtual currency forks into two, an airdrop may be used to send the new cryptocurrency straight to user wallets. In these cases, an airdrop is distinct from a hard fork in that it doesn't create two iterations of the same basic cryptocurrency.