I wanted to write this...
... to help some of you who do not yet understand this part of blockchain, and also to explain why it is more difficult to participate in these airdrops for people that reside in the United States. So, here we go:
You may have heard of an 'airdrop' in associated with 'free money' content. This is because that is essentially what an airdrop really is. You, like I did, probably thought that it was a scam. Why the hell would a business of any kind give away millions of dollars in free money?? This clearly, is too good to be true!?!?!
Well, in a sense, it is too good to be true. You see, if a business, of any kind, did this without benefiting somehow, it certainly would not be a business, at all, for very long. So, the question is, what do they gain by giving you free money?
There are a few reasons why blockchain businesses do this. As a matter of fact, in many of these digital currencies, it is a vital step to making that currency actually hold any value at all. It is also a part of the reason that trading fees are so high on crypto-trading platforms such as Binance and FTX, as it is allocated to help cover the cost of these enormous airdrops. So, onto the reason:
Companies do not just give away this money, entirely for free. You usually have to do something like share a link on Facebook or retweet a tweet from their page on your Twitter account. Sometimes you have to pass a KYC verification and give out personal information. When a company is starting out, they need to get the word out about their new business to gain investors and users so that the product will actually have value. Imagine that you had a billion STEEM, but no one knew what STEEM was. Would your steem be worth anything? Of course not! That would be like making a million truck tires and trying to sell them before trucks were ever invented! Who would buy a truck tire with no truck?? You might sell a few, but generally, as a business idea this would not work. In order to sell an asset, it must first have an application!
When a company airdrops five million dollars worth of it's currency, it is building the truck to put the tires on. The token, with no application as a utility, would hold no value. The ability to use it for trade is what gives it it's real value. This concept is also the reason why it is more difficult for companies to airdrop to U.S. customers. Under U.S. guidelines, the fact that the token itself is not backed by a solid value causes it to fall under the classification of a security. The 'utility' of the token is the only valuable part, and therefore, under U.S. law, you can not give it away. This is because U.S. law does not allow the distribution of securities, partially because of risk.
Why do big exchanges like Binance do airdrops, even though they are already well established? Clearly, Binance is a platform that is not just in it's birthing stages. It fact it is now maybe even past the toddler stages. Yet, the giant and quickly growing crypto-toddler is still doing airdrops.
The Reason:
When a crypto-exchange like Binance gives you $15 dollars, just for signing up, they usually have at least a small catch. Now, you really can cash this money out, and it really does work. You will always have to DO something though, in order to either get the airdrop, or to cash out the airdrop. The task that you have to do in order to cash out? Generally, if you aren't required to use your social media accounts to spread the word about the platform, then you must use the money you have been given until your trading volume on your new account has reached a certain trading volume. The reason for this?
If, let's say, Binance for example, gives you fifteen dollars to trade with, but you must reach a trading volume of one-hundred dollars, then by giving you fifteen dollars they increase the trading volume on their platform by one-hundred dollars per-person who completes their offer. Once you have used the money that they give you to trade, buying and selling whatever cryptocurrencies that you may desire, you can cash your money out to fiat in whatever way you see fit. This clearly helps you, but how does it help the trading company?
The allure, for traders to use any platform to trade on, is liquidity. The higher the trading volume, the more people are buying and selling, which means higher liquidity. Higher liquidity means more opportunity to make money, and also smaller spreads between buy and sell prices. Traders are attracted to the high liquidity, so more come, increasing the trading volume and liquidity even more, and of course, the appeal of trading there. The crypto-exchange, with it's high trading fees, makes a small amount off of each buy and sell completed. So in a nutshell, giving away free money actually makes them more in the long run.
Now, if you are a resident in the U.S. it will be difficult to get into many of the airdrop opportunities that you can find on the web. Using a proxy will not solve this issue usually, as most of the time you would have to pass a KYC verification which requires you to ACTUALLY be from the country that you are in, requiring things like ID, selfy, and even proof of address. One of the best ways to get into crypto airdrops and bounty's is through icodrops, and bitcointalk forums. Go check it out sometime. Most of these are current investments of your time or writing skills, and do not pay out for quite some time, but the rewards can be quite healthy and there are many options to make some future money. You can earn posting on social media, writing articles, developing code, or if you speak more than one language you can get paid quite well for translating the company white-paper.
If you are in the U.S. and you want an opportunity from a big company that pays out pretty quick, then I have at least ONE for you. I haven't been seeking out a lot of new money making opportunities lately, but the one that I am about to share with you really does work. I've gotten paid forty-five bucks and used the money to put into my STEEM account and also for gas in the vehicle. If you are interested and are a U.S. resident, all you need is proof of address and ID. If you sign up, you get fifteen bucks right away (AS LONG AS YOU MAKE SURE TO PASS KYC AND VERIFY YOUR FIAT WALLET IN YOUR ACCOUNT SETTINGS.) Make sure to go back and make sure that the fiat wallet verification is checked off or you will not receive your reward. If you are interested in this, just click here to access a little free money from this site.
I hope this was informative and useful for you!!
-Article by Jonathan Caleb Williams
