Steemit Crypto Academy Contest / S12W01 - Understanding Cryptocurrency Airdrops .

Hope you all are doing well and good and enjoying the best days of your life. This is me @shahid2030 from Pakistan and you are here reading my post. You all are welcome here from the core of my heart.

This is my participation in a contest Understanding Cryptocurrency Airdrops organized in SteemitCryptoAcademy @crypto-academy.

Crypto airdrop is a very common phenomena in crypto market. When a new currency is launch they distribute free airdrops as a promotion. This contest will help many people to learn about airdrop and they can get profit out of it, if they search for a legit or authentic website where they can claim airdrops. So let's start our concern business without wasting any time.

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Airdrop is a free reward to crypto holder by the Blockchain or a crypto project. It's aim is to do promotion of their own native tokens. They want to build their community, creates awareness amoung the people, increase active users who can buy and hold their tokens and many other reasons.

Airdrop distribution vary from company to company. Some company distribute it free in all, while some are giving it after fullfiling a certain criteria. You may have to buy some of their native tokens to be eligible for airdrops or they may give you certain other tasks to complete.

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As I mentioned above that giving airdrop vary from company to company, so every crypto project distribute their coins according to their own understanding and interest. Let me tell you some ways of distribution of airdrops.

Airdrop for holders: This is the most common one and almost all the new projects adopt this way of giving airdrops. They give airdrop as a reward to only those users who have bought their tokens.

Bounty Airdrops: Here the project give airdrop to the users by performing specific actions, such as promoting the project on social media platforms, referring other or being always active with in a community.

Surprise Airdrops: Here the projects give airdrop to the holders without informing them. It is an unexpected or surprise airdrops distribution. These are less common but can generate excitement and interest.

Forked Airdrops: When a new project is launch on an existing blockchain, they distribute the new tokens to the holders of the original cryptocurrency.

Steemit is not giving any kind of airdrop theses days. It works on proof of work. Actually it's a social media platform where you can share your content and earn reward from here.

Yes in past we have some instances of Steemit involved in Airdrop mechanism. The most recent one is when the Hive blockchain forked with Steemit main blockchain, back in 2020. The Steemit holders were given Hive as an airdrop with the ratio of 1:1. For example if you would have 100 Steem coin that time, you would be given 100 Hive coin. This is actually called Forked airdrop and Steemit was involved in it, so we can call it Steemit forked airdrop.

Steemit has conducted its own airdrops too in the past by distributing STEEM tokens to its users. It's aim was to attract the users towards itself. Actually Steemit Inc; It is the company behind Steemit, has initiated various airdrop campaigns in past. They used to distribute STEEM tokens to users who met certain criteria or participated in specific activities on the platform.

Checking that the airdrop scheme is legit or scam is a challenging task. One should be aware of being scammed, because it's too common in crypto market. Following steps can give you somehow direction, whether the airdrop is legit or scam.

Doing proper research on that project
Don't share any of your private key
Must visit and check their social media accounts
CoinMarketCap is trusted website you can check airdrops there
Must verify the real URL of the website to make sure you are on real website

CoinMarketCap is a website where you can find only legit airdrops. This is a very trusted website, where you can see too many news and get too much knowledge about crypto market here. You can check an individual crypto currency here too: It's ranking, supply, market Cap, all time high, all time low, current price and many more.

For claiming those airdrops they have certain criteria, you have to follow them and if you are nominated you will be given free airdrops. They mostly do social media promotion on you.

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Airdrops are taxed in some countries. They are taxed as the normal income of a person. You have to to report the fair market value of the airdropped tokens as income on your tax return. Remember it should be the current price of the token that time. If you exchange or sell those tokens, you have to give it's tax according to it's current price.

For example: You have been given an airdrop of a coin, it's value is $0.1. You have total 10k coins. Now the price of that coin becomes $1 and you want sell it, so you will have to pay according to it's current price. You have to give a tax of $10k.

Countries such as the USA, the UK and Australia have placed an income tax on crypto airdrops. This is the same as an ordinary tax in the world. According to Internal Revenue Service (IRS) in its 2019 guidance, it explains that airdrops are taxed as ordinary income. You have to pay tax on it according to the market value of the tokens when you received and took full control of them.

I didn't received any airdrop from any crypto project yet. Yeah I have participated in some airdrops on CoinMarketCap, but I wasn't given any airdrop there. They give airdrops to selected people, I mean it was mentioned that for example, only 10k people will be given airdrops and the total number of entry would be more than 50k. So they then select only 10k candidates out of 50k. I don't know what is the criteria of their selection there.

Let me show you a stepwise process how you you can participate at CoinMarketCap airdrops.

Go to CoinMarketCap and click on the three tabs there

Select the Product option and then click airdrop option

You will be shown all the available airdrops here

This is all about my blog for today, hope you guys have enjoyed reading it. See you soon with a new amazing and interesting topic till take care.