An airdrop for a cryptocurrency is a procedure of distributing tokens by awarding them to existing holders of a particular blockchain cryptoasset, such as Bitcoin or Ethereum. [2] [3] [4] In such cases, the distributed tokens result from a fork in the cryptoasset, such that the new forked cryptoasset recognizes the holdings in the portion of the blockchain that precedes the fork. In the United States, the practice has raised questions about tax liabilities and whether they amount to income or capital gains. [5] [6]

Airdrops are not limited to forks. Often, airdrops are distributed to people who apply for them, as a form of marketing to generate interest, create a network effect and promote testing of a cryptoasset.

What may be required for airdrops?

Airdrops may require that anyone who wants to participate have one or more of the following:

1. Bitcointalk account

2. A Telegram account

3. A Waves wallet or other ERC20 wallets

4. A Facebook account

5. A Twitter account

6. A LinkedIn account

7. A Medium account
Others can require accounts like Discord or Github. [7]

Airdrops may require that recipients promote the cryptoasset distributed.

Notable airdrops

  • Bitcoin Cash was given to all holders of Bitcoin in August 2017. [8]
  • Omise gave away five percent of their OmiseGO cryptocurrency to holders of Ethereum in September 2017. [3]