Crypto Airdrops vs. ICOs: Which Is the Better Investment Strategy?

One essential digital currency option that might help any enthusiast grow their income is investing. However, you must have a thorough understanding of every approach in order to take advantage of the investing process to its fullest. A couple of these strategies are airdrops and ICOs approaches. In this article we define all the pros and cons of airdrops ICOs and explain the key points of airdrops and ICOs that distinguish them from each other.

Airdrops and ICOs: Understanding the Key Differences

The role of various financial practices in investing should not be underestimated, especially if they’re devoted to digital assets. Airdrops and ICOs are the most well-known of them but what are the differences between them? Are they the same as many people think? Let’s check!

Airdrops Vs. ICOs

Before we start a comparison, first of all, we have to figure out the terms of airdrops ICOs crypto nature and their basic features. Let’s see!

• Airdrops

Crypto airdrops are a marketing policy for the promotion of crypto projects and freshly minted tokens of various cryptocurrency startups. Most airdrops have the same goal: to spread information about the project and increase users’ interest in it.

The process of airdrop usually consists of the free distribution of native cryptocurrency to current or potential users in order to get a prize. Sometimes users need to perform simple actions, for example, subscribe to a project account on a social network and make a repost of its publications. For these steps they receive free crypto. There are several types of cryptocurrency airdrops, but they usually consist of distributing a small amount of cryptocurrency among several wallets.

• ICOs

The Initial Coin Offering (ICO) is a way to attract and collect investments for projects related to cryptocurrencies. As part of the ICO, the project team creates its tokens based on the blockchain in order to distribute them among early investors. They are especially preferable for effectively financing the growth of cryptocurrencies.

Simply saying about ICOs in the topic of airdrops vs. ICO, ICO projects are startups. The project team announced a set of funds from private investors. Those for their money receive a certain number of tokens, which after the company enters the market can be sold through crypto exchanges. Their cost will depend on how successful this startup turns out to be.

Want to learn more about how to become a participant of ICO sales yourself? On Cryptomus blog you may find a wide range of comprehensive guides and articles on the topic. Check the article to make your investing experience richer!

Airdrops: Pros and Cons

Airdrops
Benefits	Drawbacks
Attracting a larger diverse audience through the opportunity to get cryptocurrency for free, without having to invest real money.	Widespread use and poor quality of projects.
The excellent investment option if you’re a beginner to the cryptocurrency market and are afraid of possible investing risks.	High risk of fraud or questionable reliability of the projects.
Drawing attention to the project and arousing the interest of users.	Not always bring profit to the participants due to the unknown value of coins in the future.

ICOs: Pros and Cons

ICOs
Benefits	Drawbacks
A high-quality and fast capital-raising tool.	Attracting investors is a complicated and time-consuming process that requires more funds and effort than airdrops. practice.
Financing for innovative projects and ideas that can change the crypto industry.	If the startup doesn’t gain popularity in the market, there is a chance to lose money.
Tokens issued as part of the ICO can be easily bought and sold on crypto exchanges, providing complete liquidity for investors.	Most countries have different laws and regulations in relation to ICO, which can cause risks for investors and projects themselves.

It’s crucial to remember that whichever project, based on airdrop or ICOs, you decide to invest in, constantly analyze the ratings and the crypto project market as a whole in order to avoid worse situations. You don't need to invest in all startups in a row – it's better to analyze them and choose the most promising ones.

ICOs and Airdrops: How Do They Differ?

Airdrops and ICOs are the most popular methods to get profit from cryptocurrency without any complicated actions. Nevertheless, people often get confused about the functionality of these two entities. Let's summarize what are the most significant differences between airdrops ICOs.

Airdrop cryptocurrencies and ICOs are different concepts, although both are associated with new cryptocurrency projects. Their difference lies in the fact that airdrops don't require any monetary investments from participants; developers can distribute coins and tokens among current or potential users and advertise the project. In turn, ICOs are a crowdfunding scheme that is based on financing practices and fundraising.

To say it shortly about airdrops ICOs, the airdrop is a free distribution of a certain number of coins to promote a company. The ICO concept means offering investors new digital currencies to replace other major cryptocurrencies such as Ethereum and Bitcoin.

What are airdrops and ICOs, how do they work and what are the fundamental differences between them? We hope that you’ve found the answers in this article. What is better in the case of airdrops ICOs, everyone decides for themselves based on their knowledge and capabilities. Thoroughly analyze information about airdrops ICOs and invest wisely together with Cryptomus!