The crypto world is full of scams. When I say scam, I mean it in the sense that they are raising money, or otherwise expecting people to trust them. The best way to avoid these, aside from not investing at all, is to only invest in coins that have already been released and been shown to work.
A recent example: a coin called Coin X. They have this Airdrop Alert blog, which is just a list of coins that are giving away free tokens worth $70,000. Now of course this might be true in some cases; it’s very easy to fake airdrops and give away lots of money for free. But the key point is that this blog was created before their coin had even been released. In other words, you can’t trust any information from the team or founder of that coin until you know whether the coin itself has worked.
There are two key elements to airdrops. The first is that the coin you’re getting is worth something, and you can exchange it for money. And the second is that the process of getting the token is interesting and entertaining, so you want to do it again.
The better airdrops do both. For example, in the recent one from Coin X, they gave away $70,000 worth of tokens, which was a lot even by crypto standards. But just as important was that they made it fun. They designed an experience where you could “earn” tokens by doing things like tweeting about it or liking their Facebook page and then exchanging them for more coins.
Crypto doesn’t have to be boring.
You should read the blog regularly to keep up on all the airdrops.
The airdrop is scheduled for June 19, 2018. The method is to put any Ethereum address under your profile and get free coins on that account. The purpose is not to sell them but rather give them away. It’s a great way to get free coins and hopefully increase your holdings.
This airdrop is different from many others in that there are no strings attached, meaning in this case you don’t have to do anything to receive the coins. You could just put in some Ethereum and wait for the coins to appear at your address if you have the patience. (You can find out how it works here: http://blog.coin-x.com/2018/06/19/coin-x-crypto-airdrop-on-the-whole-internet/)
Here’s the link to their website: https://coin-x.com/
Crypto airdrops are one of the most popular ways for new coins to get into the public consciousness. They can be an easy way to get new users, especially if it’s a coin with a strong team behind it.
But before you take part in an airdrop, it’s important to understand what it is and how it works. Airdrops are essentially when a new project spends some of its money to give away some of its coins to people who sign up for their newsletter or join their Telegram group (or whatever they do). These people get free coins in return, and they can sell those coins on exchanges at a profit.
If this sounds familiar, that’s because they’re very similar to ICOs. But while ICOs are basically trying to raise money by offering digital ownership tokens in exchange for real money, airdrop projects generally aren’t aiming for any kind of financial gain.
There are two main reasons why this is important. First, most tokens created through an ICO are worth something so that you can trade them later for something else (money, or another token). This means the tokens have real value – but the same is not necessarily true of airdrops – which is why their value can sometimes drop dramatically from
Crypto Airdrops are a way to distribute tokens to people who are not involved in the creation of the token. The coin holders can then sell their new tokens to other people. There is no real value behind the token, but there is a guaranteed value if you do not get the free coins.
The most common type of airdrop are pre-ICO coins. These provide you with free tokens and usually have a lock up period of 2-3 months where you cannot sell your tokens. The lock up period is so that there can be enough time to create a cryptocurrency and then introduce it to the market.
Another type of airdrop are utility tokens. These tokens are used on a platform and usually do not have any real value. The only true value comes from the platform itself. Examples of this would be STEEM, which is used on Steemit, or EOS, which will be used on the EOS blockchain when its launched in June 2018.
Some crypto projects have no business model, and can’t even be called a coin. But if you look at the market, you’ll find something pretty close to Bitcoin Cash, Ethereum and Litecoin.
But what’s your return? You’ll probably get scammed.
If you’re going to invest in a crypto project, you should do it with trust-evading techniques. If you take something like Bitcoin Cash, for example and use it to buy something else or trade it on an exchange, your transaction will be recorded in the blockchain. If some person finds it useful to spend their Bitcoin Cash by buying a gift card at Starbucks, and has enough time to think about it, they can go online and trace the route of the transaction back through the blockchain to figure out who made it.
So instead of trying to make money off crypto projects with trust-evading techniques, which is a bad idea anyway since crypto is too small to have any kind of economy yet, why not try one that has an economic model?
If you do that you’re trying to make money off something: an asset whose price is going up. And if you do that well enough, someone will probably pay you for trading that asset.
The crypto world is full of people who give away their coins for free. The idea is that their coin will take off because of the publicity, but in practice it rarely works out that way. It also means that you, as a new investor, can’t invest directly in the success of the project that gave away the coin.
Worse, it’s very hard to tell which coins are doing well and which are not. After all, if I’m giving away a coin then there isn’t much money left to pay for advertising or development. At least with regular companies there’s a profit-and-loss statement that everyone can look at and see where the money is going—and how they’re doing.
In terms of your investments, you can get some guidance from how the coins are valued on exchanges like Bittrex or Poloniex or what have you. But be prepared to accept a high degree of uncertainty about how this will turn out.
But if you want to give someone else’s coin away for free and don’t mind taking a gamble, then by all means go ahead—as long as you don’t give away too many coins at once so that it becomes an issue for the project.