What is a Cryptocurrency Airdrop?

What Are “Airdrops” in Cryptocurrency

In cryptocurrency, the term “airdrop” is used to describe a type of distribution event for a cryptocurrency where tokens are distributed to existing wallets. Or more simply, an event where “free coins” or coins purchased during a pre-sale are “dropped” in existing wallets.^[1][2][3]

TIP: Although you might hear the two words used interchangeably in casual conversation, an airdrop is different than a fork. A fork is when a chain splits in two, an airdrop is when coins are dropped into an existing wallet. Learn about forks.

How to Get Free Coins From Airdrops

Super simple version of claiming coins from an airdrop from any coin like Ethereum (this works regardless of why an airdrop is happening):

1. Be in a wallet where you control your private keys before the snapshot block of an event (to send out an airdrop, a snapshot of the ledger must be taken).
2. Configure wallet to show the new token.

NOTE: Some wallets where you don’t control your private keys, like Coinbase Wallet, honor airdrops.

Understanding the Different Types of Airdrops

The term “airdrop” describes a distribution event that occurs when a cryptocurrency decides to distribute tokens to users for any reason. For example:

• A distribution event that occurs after an ICO goes live and the smart contract for the ICO sends new tokens to the existing addresses of users who participated in the pre-sale. For example, one buys into an ethereum-based ICO, then on the airdrop date the token is sent to user’s wallets and they can then “add the token” to their Ethereum wallets (see the KIN and UKG ICOs for example).
• A distribution event after a hard fork or the creation of a new token which results in existing coin holders getting “free coins,” but where the platform being used requires the distribution of tokens. For example, a fork on the Ethereum network that creates a new token on the Ethereum network or another coin’s network (see fork-airdrop hybrids like the Ethereum Classic Callisto Airdrop and the Loopring Airdrop for example).
• A distribution event where tokens are given to existing holders as a reward for sticking with the cryptocurrency or as an incentive to get people to hold the cryptocurrency or a related token (see the WAVES Bitcoin Cash airdrop for example).

In other words it can be a giveaway, a distribution event due to a fork or side-chain being created, a distribution event due to an ICO, etc. It doesn’t matter why tokens are being dropped to existing wallets, it only matters that they are.

With the above in mind, we can say then that the term “airdrop” thus refers to an event where tokens not associated with addresses become associated with them, generally due to a person participating in a pre-sale (like with an ICO) or holding existing coins (like with some forks).

However, with the above noted, sometimes the term “airdrop” is used loosely to describe distribution events regardless of the specific mechanics (like in the case with some forks that use the term “airdrop” in their PR).

Since there is a little bit of disconnect between how the term is sometimes used (especially factoring in how it is used on social media) and what the term means in a more pure sense, it is helpful to understand the different definitions.

That is the gist. If you want to understand token airdrops (the kind where new tokens are associated with existing wallets), see: The latest crypto PR craze: ‘Airdropping’ free coins into your wallet by Venturebeat.com.

Airdrop Snapshot Block Height and Airdrop Distribution Date: An airdrop may include either/or 1. an Airdrop Snapshot Block Height, a block height that one has to hold an existing cryptocurrency during to qualify for the airdrop (a snapshot of the existing ledger is taken at that block height), and 2. an Airdrop Distribution Date, a date upon which the tokens are airdropped to existing wallets. Airdrop snapshot dates would be be used with fork-airdrop hybrids, Airdrop Distribution Dates are common to all airdrops and simply describe the date on which the airdrop occurs.

The Semantics of Airdrop: Airdrop has become somewhat of a PR term here in 2018 and that has led to some questionable usage of the term. As noted, sometimes the term is used to describe a distribution event that occurs after a hard fork goes live and coins can be claimed… even in cases where nothing is technically being airdropped. In cases like this, the term “airdrop” is being used loosely. The slightly confusing thing here is that, as noted above as well, a fork can have an airdrop. For example, in the case where a snapshot of the ledger is taken, the software is forked, but the distribution after the fork occurs on another coin’s network (like with the Loopring example above). I think part of the confusion is due to the fact that there is no good word to describe the distribution date after a fork where the whole of the software is forked (and of course, that distribution is the exciting part where people get “free” coins)… Thus, sometimes the term airdrop gets borrowed to describe distribution events that aren’t actually airdrops.

The General Meaning of the Term Airdrop: If you want to airdrop a file from your iPhone to another iPhone, you take your file, share it over WiFi or Bluetooth, and then it appears on the other person phone. The person didn’t have the file, now they do. It was “dropped,” through “the air;” “airdrop.”

1. Airdrop (cryptocurrency). Wikipedia.org.
2. What’s a Cryptocurrency Airdrop? A Beginner’s Guide. Coincentral.com.
3. The latest crypto PR craze: ‘Airdropping’ free coins into your wallet by Venturebeat.com.