Recently, Blockchain announced they would be giving away $125 million worth of Stellar lumens to their users over the next few months. In reality, the lumens come from the Stellar Development Foundation (SDF), but there are undoubtedly many Blockchain users interested in getting around $25 worth of cryptocurrency for free.
Well, not exactly free. When analyzing this particular airdrop of lumens, it’s clear that Blockchain is the only real winner here.
Why This Won’t Help Stellar
The SDF is giving away $125 million worth of lumens because they think it will help bootstrap the network and get more people to use their digital currency. Of course, there’s a major problem with this gameplan: Nobody asked for the free lumens. What will happen when hundreds of thousands of people are handed a liquid asset that they didn’t ask for?
Much like the airdrops of cryptocurrency’s past, it may make sense for those who receive free lumens to sell them for some other asset such as bitcoin or US dollars. Simply handing out lumens to millions of people does not create millions of users, as one must account for what those people are going to do with the lumens.
One possible result of this promotional stunt is that it will create tens of millions of dollars worth of selling pressure on the lumens market after these users decide they’d rather have something else.
Why It’s Bad for Users
This lumens giveaway is also a privacy issue for Blockchain users. According to the terms of the airdrop, those who wish to receive their free lumens will need to verify their identities with Blockchain.
“We will also require participants to verify their identity to ensure that no one is trying to claim more XLM than they are entitled to (one XLM distribution per person, unless participating in any bonus activities),” reads Blockchain’s page about the giveaway.
Mastering Bitcoin author Andreas Antonopoulos, who was previously the Chief Security Officer for Blockchain, went as far as to call the airdrop a “privacy-destroying honeypot” on a recent episode of Let’s Talk Bitcoin.
Why It’s Good for Blockchain
On the other hand, this airdrop is great for Blockchain. They get $125 million to acquire new users, and all they have to do is add Stellar to their platform. It’s likely Blockchain will continue to do this with other altcoins as well. The wallet provider has already gone ahead and referred to this particular giveaway as part of their Blockchain Airdrops program.