An airdrop is a giveaway of cryptocurrency coins or tokens – typically it’s when a new cryptocurrency or other blockchain project distributes free coins or tokens.

There are new cryptocurrencies being created all the time (its seems like half a dozen per week at the moment). For them to get noticed they need to ‘make a splash’ and generate some excitement otherwise they will just disappear as quickly as they arrived.

Therefore what they usually do is give away a proportion of the currency for free. This can be given away to anyone that claims, but airdrops typically follow a particular process:

1. The coins are given to those already in the cryptocurrency community. This usually means members of the leading cryptocurrency forum, BitcoinTalk.
2. The amount of coins is in proportion to the rank of the member, which is determined by how long they have been a member of the forum and how many posts they have made there.
3. To receive an airdrop the member may have to register at a particular website (either the cryptocurrency’s own website or a Google Docs registration list site).
4. The member may need to own (and prove it with a wallet address) either existing coins of the same cryptocurrency or another established one (e.g. you may get Bitcoin-based coins if you already own some Bitcoin or you may get free Ether-related coins if you already own some Ethereum).
5. The member may need to register through the forum directly, for example by sending a private message (PM) to the cryptocurrency team or posting a request to claim in the cryptocurrency’s announcement thread.
6. Often after receiving the airdrop the member may be expected to, or may just choose to, post in the same thread that they have received the airdrop. This provides confirmation to other members that the airdrop is legitimate.

After you receive an airdrop you have two choices. If you believe in the cryptocurrency then you can hodl and hope for long term gains – in so doing you are supporting its development. However, if not (and it’s listed on an exchange) you are perfectly entitled to sell it as soon as you can.

A useful website for tracking forthcoming airdrops is AirdropAlert.

As ever, do be careful about if you’re asked to download software (e.g. a non-standard wallet) and never give away your private keys.