Cryptocurrency Airdrops | What Steps Should you take to Protect Yourself?

Cryptocurrency Airdrops

You have probably seen crypto airdrops lately because they are popping up everywhere. It cannot be denied that they are one of the most popular trends in the crypto world right now. But lots of you still may ask ‘what the heck are these airdrops?’ Cryptocurrency airdrops are free coins. That’s it, simple as that.

To learn more about airdrops firstly we must know what kind of airdrops are there. Crypto airdrops can be divided into three groups: holder airdrops, forked airdrops, and bounty airdrops.

  • Holder Airdrops

Most of these blockchain projects are built on bigger and more popular blockchains ie. Ethereum. More than 90% of airdrops today are built on the Ethereum blockchain. Projects are rarely built on NEO and Stellar. In order to participate in this type of airdrop, all you need to do is to “hodl” that main cryptocurrency and you will be dropped with the new one.

  • Forked Airdrops

Sometimes when a blockchain is divided, from that point of time there are 2 different blockchains ie. forks. In this kind of airdrop if you are holding cryptocurrencies from the original chain you will be dropped with the currencies from the new chain in a proportional ratio.

  • Bounty Airdrops

These kind of airdrops are the most popular today. In order to participate in most cases, you will need to do some social tasks or to register for the website. And since lots of them are built on Ethereum you will need to submit your erc20 compatible wallet address. Social tasks include joining project Telegram groups, following Twitter profiles or liking Facebook pages.

Why are they giving free tokens? Where is the catch?

Airdrops are a great way of promoting the new blockchain project and to increase awareness on various social networks. We all know that a large and healthy community is one of the key factors for a successful blockchain project. So it is no wonder why bounty airdrops are so popular right now.

Are airdrops free tokens for real? What is the catch? Well, nothing is actually free. In order to participate in the bounty airdrops you usually need to invest your time, and in most cases, you will need to provide your name and email.

Dangers of Crypto Airdrops

We have established that there is no free thing in this world and that in most cases you will need to provide your personal data in the form of name and email. This is the part where all sorts of scammers appear. You can rightfully ask ‘how can there be a scam in something that it is free?’. You should be aware of warning signs on blockchain projects such as poorly written white papers, no real-world use case, or no real team. Another indicator is if it is using the same WordPress theme that you have already seen dozens of times. There is no point wasting your time participating in these kinds of airdrops. Scammers can also be targeting your personal information. In some cases, in order to participate in the airdrop, you will need to pass KYC (Know Your Customer). Scammers can steal your personal information and make you a target for their future scams.

Safety Tips how to Participate in the Crypto Airdrop

I have been into airdrops for some months now, and I can tell you immediately that there are a lot of scams out there. Here is the list of safety tips that I have picked up on the way:

  • Never Pay for the Airdrop

If somebody is asking you for money in order to participate in the airdrop walk away immediately. You will never see any free coins, but you will probably lose your money.

  • Never Share your Private Key

First rule in the crypto world. Never share your private key also applies here.

  • Create a Dedicated Email Address Only for Airdrops

Create a new email address that you will use only for airdrops. Best practice will be to have alias emails for each registration. This is possible if you have your own domain. Then you can forward all the aliases to your real email. But simply creating a new email that you will use only for the airdrops should be just fine.

  • Never use the Same Password

This should be common practice when you are registering for the various websites, and I strongly advise you to follow this rule when you are registering for airdrop projects.

  • If you are even a Bit Suspicious of the Project do not do KYC

Basically, I’m avoiding all airdrops that require passing on KYC information, if I do not intend to participate in the ICO. The risk of sharing my personal information with a not yet established project is too high. But if the value of the airdrop is just too big to pass, do your own research before sharing your personal information.

  • Create a New Etehreum Address

My practice is to create a new Ethereum address that I’m using only for participating in airdrops. They cannot do anything with your primary address (if you even have one), but I’m not comfortable with all these projects knowing my balance or past transactions. That also can make you a future target for the scams.

Where to Find Airdrop and what to do with Tokens/Coins?

Here you can find a list of crypto airdrops. The list is regularly updated and sortable. Usually, tokens are dropped a couple of months after airdrop applying, and usually when the ICO is over. Then you will need to wait until the token is listed on crypto exchanges in order to token to get the real value. Then you can trade it for one of the major cryptocurrencies.

Conclusion

We have seen that there are lots of scams in the crypto world and it is throwing a lot of shade on the whole community. This also applies to airdrops. But that doesn’t mean that all the apples are rotten. In the past, there have been some great airdrop projects. Stellar was dropping a few thousand lumens for their website registration. Now, Stellar is very much worth a respectable amount of money. You never know if that next airdrop is a new “Stellar” but its worth finding!

Featured Image: DepositPhotos/ 3DSculptor

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