Accepting a cryptocurrency airdrop offer may seem like a good idea. Yet not all airdrops are legitimate. Here is what you need to know about crypto airdrops.
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Cryptocurrency Airdrops Promote New Currencies
A cryptocurrency airdrop occurs when a company directly deposits cryptocurrency coins or tokens in users’ wallets.
Airdrops are mostly used as a marketing tactic to raise awareness and trading volume.
However, airdrops are also used after a hard fork occurs. A hard fork is a permanent split in a blockchain used to power a cryptocurrency.
Users of the existing currency may receive an airdrop of the new currency. In most cases, airdrops are used to promote new currencies.
A typical crypto airdrop starts with an offer presented on social media and popular cryptocurrency forums. The cryptocurrency may be sent for free or in exchange for a small favor, such as sharing or retweeting a post from the company.
Recipients may receive crypto to the wallet or crypto exchange of their choice through a standard cryptocurrency transaction.
Over 4000 cryptocurrencies are currently active. Crypto airdrops help newly formed companies stand out and build a following.
Is a Cryptocurrency Airdrop Safe?
As with any online offer, some airdrops are scams.
Due to the popularity of crypto trading, malicious groups use cryptocurrency airdrops for phishing and dusting scams.
- Phishing scams are used to collect personal information, such as login credentials or access to a digital wallet.
- Dusting scams allow hackers to identify the holders of digital wallets and extort money.
The group offers to give away a virtual coin or token in exchange for a wallet address.
The victim receives small amounts of a cryptocurrency, such as Bitcoin, and supplies the hackers with the information they need.
Companies may also use airdrops to artificially inflate the value of their currency.
For example, the airdrop may boost the trading volume of a currency and help temporarily lift its price, giving investors a chance to make a quick profit.
After enough people dump the currency, the price typically plummets, making the free airdrop worthless
How to Find Legit Crypto Airdrops
Legitimate cryptocurrency airdrop opportunities are often posted on crypto forums and online communities.
- An authentic airdrop is also solicited, which means that the user first needs to accept the offer.
- Unsolicited deposits in one of your crypto wallets may be a sign of a potential crypto airdrop scam. Say no to any offer that requires you to send small amounts of crypto.
Users should also be wary of any airdrop offer that requires them to download a new wallet.
The wallet may contain malicious software designed to gain access to existing funds from other wallets.
Legitimate offers always send funds to an existing wallet.
Users should also avoid any offers that require access to their wallets’ private keys.
Giving access to the private key gives others complete control over your wallet and the currencies that you hold.
When applying for a cryptocurrency airdrop offer, do not reuse passwords from your crypto wallets or crypto exchange sign-in.
In the end, most cryptocurrency airdrops are legit and provide a way to earn free crypto. However, whether the free crypto gains any value is a guessing game.
