I feel compelled to express my sincere gratitude to toast, tonyk, xeroc, Stan, and everybody else in the bitsharetalk forums who helped me in one way or another either by proofreading, explaining concepts to me, and providing links to different posts. Without those people there's no way I would have been able to write my series of articles on Bitshares.

Airdrops and Snapshots

You're going to hear the phrases “snapshots,” and “airdrops,” thrown around quite a bit in the Bitshares community. What are they and what role do they play in the DAC biosphere?

The term “airdrop” was first popularized by the Auroracoin project. The Auroracoin devs thought it would be a good idea to try and bring digital cryptocurrency a little closer to mainstream by premining half a coin, and earmarking it for distribution to a specific demographic, in this case, the population of Iceland.

The Auroracoin team achieved this by using a system set up by the Icelandic government to keep track of their population to verify that they were only handing out coins to Icelandic citizens. Although this is not the only means by which an airdrop can be carried out.

To be clear, “airdrop” does not refer to literally physically dropping anything out of an airbound vehicle, although that would certainly be neat to watch. What it does refer to is any means of distribution of a coin, or in the case of DACs, shares, which are basically coins but tailor-made to suit the purposes of a specific DAC and it's corresponding blockchain.

Developers who create DACs by using the Bitshares toolkit, angelshare funds, or who just want the support of the Bitshare community are expected to honor what the community refers to as a “social consensus,” which asks that they airdrop a certain percentage of their coin's initial public offering to holders of PTS and AGS, or if the DAC doesn't work that way contrive a way to otherwise honor said PTS and AGS holders.

In a typical scenario this would be effectuated by means of a snapshot. Snapshot is a pretty apt metaphor here, when you take a picture with a camera, you're freezing time in a manner of speaking. In DAC-speak a snapshot also means to freeze time, but instead of taking a real-world image, you're taking a picture of the blockchains for different coins.

For those not yet familiar a blockchain is a freely distributed public ledger containing every transaction that has ever taken place in a cryptocurrency. This means that a blockchain contains up-to-date information about the balances of every single wallet, even yours. A snapshot is actually taking a picture of those balances.

Angelshares do not have a blockchain, but there is a means in place by which the same effect can be achieved.

So imagine that you've developed a new DAC, coded it up and you're all ready to go. You decide to honor the social consensus by airdropping a certain percent of your initial coin/share distribution to PTS/AGS holders, so you take a snapshot. Now you have a list of wallets belonging to the holders of PTS and AGS that you'd like to honor. Through programming magic you can now reward those groups of people for their support by designating a certain amount of your premine to be distributed proportionally to the wallets on those lists. When a new DAC comes out, all the investors and holders of any chosen airdrop coins will receive a stake proportional to their investment/holdings in the first block of the new blockchain.

When holders of PTS and AGS see that you've done this they can download the client for your new DAC and there will be an easy to use tool made available that you can point at the wallets you're using to donate to angelshares or to hold an honored currency, which will communicate to the new DAC that you are the holder of those coins, and you'll get credited the balance.

All this kind of begs the question, if you were making a DAC why on earth would you WANT to use a snapshot to airdrop a premine out to people? Well, the main motivation here is that honoring this social consensus by allocating at least ten percent of your initial shares to AGS donators, and ten percent to PTS holders, gets the support of the Bitshares community behind you. This would open up the door to getting marketing help from both the community. This would also cause the community to embrace your project more enthusiastically, and give you a place you could get technical support in maintaining your DAC where needed.

Additionally, honoring the social consensus causes Invictus to be on your side. Depending on the availability of funds, which get replenished from time to time when new snapshots are released, and the amount of other projects currently being backed by the company, support from Invictus, per Stan, could potentially include legal help getting your company set up in it's chosen favorable jurisdiction, literal office space at Invictus' US headquarters at Virginia Tech, help putting together a website while you work on more important things, legal help on the financial end of things, use of Invictus' trusted escrow service, consultation with Bytemaster (Dan Larimer) and other really smart people for help making your code better, help with finding conferences to speak at for marketing your DAC as well as promotional support within the bounds of Invcitus' global marketing campaign.1)

Individual BitShares delegate, who will be given to opprtunity to spread Angelshares funds out through a program of “smart spigots,” may also choose to toss you some startup cash at their discretion.2)

What kind of support, and how much of it your DAC could get from invictus depends on certain factors including but not limited to how promising the community deems your business model to be, what technologies you choose to use to implement your business model, whether or not you've selected an optimal legal jurisdiction for your DAC to flourish, how qualified you and your team is to make it happen, and how popular your idea is.3)

Snapshots aren't limited exclusively to PTS and AGS, you could give a portion of your premine to the Peercoin community if you wanted simply by tacking on a snapshot of their blockchain. This allows you to kickstart a community for your DAC by having a certain percentage of your coins/shares distributed to a demographic who already knows what to do with them. This is a huge advantage in and of itself because since the alt-coin explosion earlier this year just about any demographic you can think of is already represented by an alt-coin of some kind. Let me toss a couple examples out there. Protoshares would be a way of targetting more technically oriented people interested in business. Angelshares might be a way of targetting a group of people more likely to donate to some cause or participate in an IPO. If you're trying to target the meme loving redditors of the world you could include dogecoin in your airdrop. If you had a DAC that you want to get into the hands of scientists you might consider airdropping to Primecoin. If you're trying to undercut a competitor you may even consider airdropping to their coin! Possibilities are limitless and growing with each to addition to the cryptocurrency world.

In effect, the existence of blockchains make possible a system of rewarding early investors in a manner similar to a public IPO, except one need not be an accredited investor to get in on it. The ability to airdrop coins allows for you to start with a nice, diverse community of holders who are already a part of the crypto-world, ready to get behind your DAC and give it value from the get-go.

E-Currency | Cryptocurrency | Bitcoin | BitShares

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