Cryptocurrency Airdrops; A Possible Panacea Towards Poverty Alleviation in Africa

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January 13, 2021 by
Cryptocurrency Airdrops; A Possible Panacea Towards Poverty Alleviation in Africa

Statistical records of 2019 shows that, one in three Africans; actually 422 million people live below the global poverty line hence, representing more than 70 percent of the world’s poorest people. Absolutely, this figure has kept increasing even to more than 90% overtime with roughly 40% of people in Africa living below US$1.90 a day having people in sub-Saharan Africa more than twice as likely to live in poverty as those in South Asia. (The next poorest region globally).

According to projections from the International Futures (IFs) modelling platform, hosted by the Frederick S Pardee Center for International Futures at the University of Denver, sub-Saharan Africa accounts for roughly 60% of the global population living in poverty in 2020.

From the above, we see that the challenge to reduce poverty will be massive indeed, but if the government can shoulder this onus of poverty reduction or alleviation on them, maybe, just maybe, they could combat it. Since estimation has already shown that the number of people living in poverty in Africa is likely to rise over the next 10 years if things remain the same.

It’s a Digital World; Crypto Airdrops Can Help – What’s Airdrop?

In its literal definition and historical use, an airdrop is a tactic by which crates of food and essential supplies are dropped via airplane to people in need especially in times of war. 

However, in the cryptocurrency business, an airdrop is a marketing gimmick that involves sending coins or tokens to wallet addresses in order to promote the awareness of a new virtual currency. 

In other words, this concept here relates to crypto project owners trying to market their coins or tokens by distributing them for free to members of the crypto community.

Small amounts of the new virtual currency are sent to the wallets of active members of the blockchain community for free or in return for a small service, such as retweeting a post sent by the company issuing the currency.

Its aim is to spread awareness about the cryptocurrency project and to get more people trading in it when it lists on an exchange as an initial coin offering (ICO).

Primarily, airdrops are implemented as a way of gaining attention and new followers, resulting in a larger user-base and a wider disbursement of coins.

How Then Can This Alleviate Poverty?

Once, it was reported that the government in Shenzhen carried out a lottery to give away a total of 10 million yuan (about $1.5 million) worth of the digital currency. Nearly 2 million people applied and 50,000 people actually won.

The winners were told to download a digital renminbi app to receive the digital yuan and spend it at over 3,000 merchants in a particular district of Shenzhen.

This digital yuan is not a cryptocurrency like bitcoin. Instead, it is issued and controlled by the People’s Bank of China, the country’s central bank. It is not looking to replace digital wallets like Alipay or WeChat Pay. It was set to work together with them and other banks.

  Wonder why am stating this? Isn’t it possible that these can be a project picked up by the government to alleviate poverty? Is there not a possibility that there could be a massive mining or an availability of these monies airdropped to prospective business minded individuals (Africans) while giving them a form of awareness about projects or plans that are capable of making a financial exploitation possible? You don’t think so? Well,……

Let’s Get To It

The above scenario of the Shenzhen case is a perfect picture of what airdrops like this can do to benefit the people of a community. The airdrops could serve as capital to businesses and an encouragement from the government to the members of such communities to work and earn living hence going a long way to alleviate poverty and bringing about financial emancipation.

Second, it is normal that after a crypto airdrop exercise from the government, many wallet holders after detecting new coins in their wallets, ignites conversation on social or trading forums as to the origin of the tokens. Consequently, reasons behind the free coins are exposed.

This then could serve as a platform on which receivers can communicate and gain more knowledge about the intentions of the government. These intentions could be on a  particular intended project or opportunities worthy of exploitation that are deemed fit by the government. 

Immediately coins are received and the source  known, these individuals can be called together for a training where awareness is given to embark on projects or whatever intentions capable of giving them higher or better  financial explorative avenues.

In cases where the airdrops are accompanied by small tasks such as filling online forms, the team behind the airdrop collects valuable information in exchange for free coins. The data collected can later be turned into leads and subsequently, sales. Hence, market leads are generated.

Since information and market leads are collected in exchange for airdrops given, relevant data are collected through this means and will help the givers of this token make more focused marketing solutions towards their ideal audience. Example, information of persons interested in agriculture or have great ideas capable of yielding potential financial returns can be noticed and helped through this means.

Moreso, airdrops can be used as a gesture of appreciation and marketing. They usually help in getting the attention of the community. Airdrops are a good way to spread the word about an upcoming or recently launched cryptocurrency. Inadvertently, marketing in this context could mean marketing certain profitable ideas or projects by the government.

This means it (airdrops) can be used by the government to market it’s wonderful project and plans. It makes people interested and they learn of it bearing in mind the reward of airdrop tokens at the end. The goal here is people get enlightened about these plans and programmes before they have an opportunity to put it to practical use, a chance to reduce the risk of trials and errors because it’s a free token.

Furthermore, with airdrops, everyone’s a winner;  the owners of the ICO project will generate demand for their coin/token, and individuals who receive the airdropped tokens will get coins/tokens for free, which  in a space of time, may turn out to be worth fortunes when they get listed on exchanges. 

The government can create cryptocurrencies and generate a demand for it. Doing this to persons that would benefit, it could be a solid start for their financial exploitation as there is a possibility that when the demand heightens, the value increases hence, the presence of financial opportunity.

In addition, some airdrops are constructed in such a way that the more tokens you hold, the more you receive in subsequent airdrops. Making others interested to be holders so as to also keep receiving thus enhancing or more wealth creation. So, if a user is actually loyal to a token and keeps a substantial amount of it in their wallet, they can be rewarded with more tokens by the company automatically translating to more wealth creation.

With So Many Airdrops, There Can Be No Value

As we all know, money becomes what it is by what we call it. When we call it money, it makes it’s holders or the airdrop beneficiaries more open to potential returns.

A currency is nothing if it is not widely used. And for it to be fully a currency, it has to have value. That is what makes it a currency. But then, if airdrops are currencies that are freely given to individuals to help them kickstart opportunities that can help alleviate poverty, there is a likelihood that the value of such a token or currency reduces, hence meaningless.

To this effect, something can be done. The government can make some cost-incurring effort to first encourage the currency’s widespread usage. 

A way to achieve this is value creation through social media platforms. As an airdrop campaign goes on, the social media gets flooded with news about the token hence more eyes on the project. Since it’s a good model by the government, more people will get interested and study up on what has to be offered. This will increase the perceived value of the tokens. By so doing, this becomes a plus to those that would have the currency.

Warning!!

What has benefits also has its bitter sides. Airdrops when not properly planned can negatively affect the token-economy and value of the token.

That is to say, it should be done or properly planned in a way and manner that it will not negatively affect the token economy.

Most times, the danger in this is that the top interest in the money is usually more than the project. So when there is a consideration of an airdrop project, the government or its team has to be sure that it is carefully planned out in a way and manner that would attract people who will actually support and get empowerment from the plan or programme and continue promoting it even after they must have stopped receiving free tokens.

This in turn could go a long way to shedding off weight from the government hence alleviating poverty to an extent in Africa.

 

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