Whitelisting
What’s the Advantage?
Whitelisting in Cryptocurrency Projects
Ever wondered why some people get in so early on some crypto projects? We were like you at some point, and we do not wish that you get puzzled about this exact thing on your cryptocurrency journey. Some individuals have made a fortune in crypto by staying ahead and being whitelisted. Others who buy into these projects later are often unaware of the earlier whitelist. So what is a whitelist, and why is it some buzzword in crypto? Let’s explore the meaning, and see why crypto startups do it and what exactly it means for everyone. Sit tight and read on!
What is a Whitelist?
Whitelisting started with the software, which is how most antivirus is structured. Developers often design the software to whitelist programs from certain vendors while checking others thoroughly during a scan. You must have noticed this feature in smartphones today asking you to confirm that the software you are trying to install is from a trusted source.
The next concept of whitelisting relates to emails. It is funny and almost impossible to say you do not know what a spam folder is or you haven’t seen one. We are sure you have because you may not be able to access this article if you live under a rock. Just kidding, but emails you receive directly to your inbox are from a whitelisted company or individual emails. These companies pay fees to your internet service provider in some cases. In other instances, they ask you to sign-up on their website or add them to your whitelist directly. As soon as you provide your email address, you will be included in their customer base and receive products and other updates in your inbox.
Whitelisting is also used in computer networking to refer to a list of MAC addresses allowed to access a LAN or MAN. These addresses are trusted, protecting the network from being used by outsiders. Simple routers can also use this same concept to prevent unauthorized addresses. The web can be open and available for access by selected authorized users.
The last idea of whitelisting applies to exchanges that sometimes allow their users to whitelist specific wallet addresses for withdrawals or deposits. There is usually a prompt when a new address is used for the same purpose. Doing this can protect users from arbitrary transactions since crypto transactions are irreversible. We will now look at cryptocurrency whitelisting and why it is done in the first place.
What is Cryptocurrency Whitelisting?
“Most cryptocurrency projects start with an ICO; ICOs or initial coin offerings are invitations for investors interested in the project and the promise it holds for its users. In simple terms, you can call an ICO a presale period.”
To reward the first and earliest supporters of the network, however, these projects create a whitelist that entitles those listed to specific preferences such as discounts on the tokens they purchase. Most projects require these earliest users and supporters to complete particular tasks such as KYC also known as “know your customer” verification tasks. There may also be social media invitations of their friends to qualify for the whitelist. When you complete these tasks, you will be whitelisted, and you can either get some tokens for free or at a meager amount. You can then resell when the team launches the project for profit.
“The reason for whitelisting is to increase the project’s popularity. Whitelisting is a part of the strategy employed by cryptocurrency projects to get the needed popularity, following, and hype. “
As users complete the task and invite others to do so and join the whitelist, some sort of noise is built around the project. Those who get whitelisted sometimes become the biggest supporter and promoters of the project when it is eventually launched because, by this time, they usually have so much stake in the project.
In summary, whitelisting means allowing or marking as trusted. It also means assigning eligibility in the case of cryptocurrency whitelisting, where whitelisted users can either get tokens at a discount or be eligible for free distributions whichever the company decides. Lately, however, many cryptocurrency projects now use other methods such as fair lunch and IDOs to give investors access to a token before it is launched or promote their community on the notion of fairness and equal participation.
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