While every day we get new cryptocurrencies on the market sometimes we are not aware how they came into existence. There are several ways of how a new coin is created and one of those ways is by “forking” an existing coin.
What is the fork?
To get into greater detail on the explanation that is the fork of certain cryptocurrencies we will use examples that people can be familiar with. Let’s say for instance that you have a certain piece of software that was made in the past, like Windows XP and then the developer that is Microsoft decided that it will update its software with a newer version due to new hardware capabilities or just because they wanted to release a new better version of windows. Once a new version is created the old windows and new windows will perform the same function, but one will not be compatible with the other in many ways. This will result in a “fork” where there are fundamental differences between the old and the new.
In most cases when a fork happens with a cryptocurrency it is because the developers of that certain coin have decided to update their cryptocurrency and, in the process, they have come to a part where they need to change certain codes that will change their coin complete as the new version will no longer be compatible with the old. This causes a fork where the new and improved code for third coin is divided from the old, and while the old one may still exist usually the new one gets more support. However, they are now two seepage currencies with separate values and miners need to decide which coin they will continue to mine.
What are cryptocurrency airdrops?
Now that we have explained what a fork is, we can get down to the airdrops. This might sound like a military action, but it’s a simple giveaway that a lot of altcoins have done. It’s a basic distribution of the coins to the crypto community that usually has some rules before people are eligible to get them.
These rules are usually something in the form of proof of possessing the said currency, or additional registration to a certain platform and many other ways. The format of these airdrops typically goes in the following order
Certain coins get created, then to get the coin going there is a portion that gets distributed to the people who register with the website of the coin.
Another format is that at a certain time everyone who holds X amount of Y coin gets a certain number of said coins as free tokens.
This can be an interesting way to get new people familiarized and interested in certain coins, but ultimately if those certain coins don’t raise in value many of the dropped coins end up being worthless. However, never look a gifted horse in the mouth, airdrops are usually free so you don’t have anything to lose if you enroll yourself into an airdrop.