What is Airdrop in Cryptocurrency

If you’re watching cryptocurrency world, you may have heard of airdrop. Cryptocurrency companies heavily rely on peer-to-peer marketing on social media and other channels.

For example, look at the following Tweet and see yellow circled text.

Airdrop is a procedure of distributing digital tokens to people who’re helping in marketing the tokens by promoting them on their social media and other web platforms such as writing blogs and sharing with friends. When a person posts a message or link provided by the company, they get a number of tokens transferred to their account.

From the definition:

An airdrop for a cryptocurrency is a procedure of distributing tokens by awarding them to existing holders of a particular blockchain currency, such as Bitcoin or Ethereum. It can also be considered a marketing strategy, since its goal is usually to spread the word about a certain product, coin or exchange in the world of cryptocurrencies. Lately this strategy has become increasingly important due to various social networks, most notably Facebook, refusing to allow adds 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. There are two ways creators distribute their tokens: selecting random wallets or publishing the event in airdrop lists.