Digital currency developers are trying a new tack for marketing and encouraging mass adoption: "airdropping" free cryptocurrencies into people's accounts.
The meaning of airdrop in the cryptocurrency world has little to do with an iPhone. In this case, a group of people starting a new digital currency decide to give these newly minted tokens to holders of an existing coins like bitcoin or ethereum, for free.
"In certain ways people are getting free lottery tickets," said Matthew Roszak, co-founder of enterprise blockchain-technology company Bloq. "There will be a tsunami of airdrops this year."
Earlier this month, holders of the cryptocurrency neo were selected to receive another digital coin called ontology, for free. The token is supposed to give holders voting rights for a platform that focuses on identity verification and data services. Ontology began trading on Hong Kong-based exchange Binanceon Wednesday, according to a release.
Three other teams — including developers behind a Wikipedia-like site called Everipedia, similar to the ethereum's Callisto Network, and a smart-contract system called United Bitcoin — are also planning airdrops, according to Fundstrat Global Advisors.
But given the price surges and mania around cryptocurrencies, it isn't clear why anyone seeking a profit would give away these out these new coins.
Here are a few reasons more digital coin developers are pursuing airdrops: