Did you know that back in 2010, you could get 5 BTC for free? As much as we might not believe it, it’s true! Gavin Andresen, often known as the face of Bitcoin, launched the first crypto faucet back in June 2010, giving users 5 BTC on a first come, first served basis.
A crypto faucet is a website or an application that rewards you with cryptocurrencies in return for completing relatively straightforward, non-labor-intensive tasks, such as completing a captcha, viewing ads, or completing surveys.
This guide will discuss crypto faucets, their relevance in today’s world and the different types of crypto faucets available today.
What Is a Crypto Faucet?
A crypto faucet rewards you with crypto for completing simple tasks. The reward mechanism is like a “leaking faucet,” dripping crypto after every successful task completion.
Does this sound like “free crypto”? Well, yes! The only input commodity you need in order to get free crypto out of a crypto faucet is your time to complete different tasks. However, don’t get your hopes too high, as the rewards incurred are far less than you might expect.
You only get a few cents every hour, and even with the highest paying crypto faucets, you can get only 30 cents an hour — if you’re lucky. Just as a leaking faucet drips successive water drops, a crypto faucet drips tiny amounts of crypto. In a typical Bitcoin faucet, the rewards get disbursed in satoshis, the smallest bitcoin unit, equivalent to 1/100 millionth of a bitcoin.
Crypto faucets are not widely adopted, due to the lower payouts and shady techniques that many faucet sites use to make money. The whole purpose of a crypto faucet is to spread awareness among people by distributing “free cryptos.” However, it has since transformed into an entirely new business model to yield profits from all kinds of arbitrage.
How Does a Crypto Faucet Work?
Before understanding how a crypto faucet works, we need to understand its core business model. Companies run crypto faucets to maximize their revenue and earn profits. A significant portion of their revenue comes from “traffic arbitrage,” which means that they send traffic to different advertising networks, earn revenue and share a small portion of it with users.
The only traffic source for crypto faucets is the people viewing these ads who come from these ad networks. In return for viewing these ads, you get a tiny portion of the revenue coming from the ad networks in the form of crypto rewards.
This revenue-share arbitrage model isn’t just limited to ad networks, however. These faucets also work with captcha, gaming networks, survey companies, affiliate networks and other platforms where the revenue-share model makes good business sense.
The more time you spend on a crypto faucet site completing the tasks, the more money you can make. The tasks are dead simple if you look at them, which encourages people to devise algorithms and bots that can skim through these faucets and complete the tasks on their behalf. However, crypto faucet sites try their best to prevent bots from using the platform, in order to avoid being penalized by ad networks.
Note that, due to high transaction fees, a minimum withdrawal limit is usually in place. Networks use a microwallet and a micropayments platform to disburse faucet rewards once the minimum withdrawal limit is reached. Many crypto faucet sites also use their native tokens, which you can later convert to any supported cryptocurrency through either their platform or any third-party exchange.
How To Use a Crypto Faucet
Unlike other crypto-based applications, a crypto faucet is relatively simple to use. You don’t need to have a technical background. To use a crypto faucet, you only need to follow these simple steps:
- Sign up for a crypto faucet.
- Add your wallet address (microwallet).
- Select and perform different tasks.
- Get paid!
Even though every crypto faucet has a different interface with which to interact, all crypto faucets follow the same steps. Once you sign up and complete your profile, you can add your wallet address. It is important to note that most of these faucets use microwallets to send micropayments, and you can’t add your regular Bitcoin or Ethereum wallet address.
The most common micropayment wallet that these crypto faucets use is FaucetPay. You can sign up on their website and set your microwallet to receive incoming payments. You can use your FaucetPay wallet address on any of the crypto faucets that you’re using.
Once you’ve signed up and added your wallet address, you can select any task you wish to complete from the main dashboard. For each task, you can see the completion time and the payout (reward) that you get once you complete that task.
Although each crypto faucet offers various tasks, be very careful when clicking links and make sure that you don’t give your personal information. For security reasons, we do recommend using a different browser while completing these tasks.
Typical crypto faucet tasks
Once you complete the task(s), you can see the rewards in your balance. Many faucets allow you to choose the primary currency for the rewards, such as Bitcoin, Ethereum or any other supported currency. Once you hit your minimum withdrawal limit, you can withdraw your earnings from the crypto faucet platform directly to the micropayment wallet that you added in the first step.
However, you can’t just sit and spend 20 hours a day on these tasks. These crypto faucets have certain limitations for the number of tasks you can complete within a day. This limit prevents bots and automated tools from abusing the faucet system. If the crypto faucet encounters any suspicious activity coming from your account, they can either suspend your account temporarily or block it immediately.
History of Crypto Faucets
Crypto faucets aren’t a recent phenomenon. They are one of the earliest applications in the crypto space, tracing back to 2010 when there was only one cryptocurrency: Bitcoin. At that time, very few people knew about Bitcoin, deeming it an experimental currency.
Gavin Andresen, well-known cypherpunk and Bitcoin core developers, launched the first crypto faucet back in June 2010. It was a Bitcoin faucet, and its primary purpose was to spread awareness about Bitcoin. Another reason for building this faucet was that there was no Bitcoin exchange then — so this faucet made it easier to acquire bitcoins.
The original announcement post for the first Bitcoin faucet
At that time, Bitcoin was worth pennies. Very few people took it seriously. Gavin added his own 1,100 bitcoins to his faucet, giving away 5 BTC to anyone who came on the faucet platform and completed a simple captcha. As time passed, this faucet gave away a total of 19,715 bitcoins, all coming from Gavin’s wallet.
Concurrently, more cryptocurrencies emerged, and developers started making their small faucets as hobby projects. However, it didn’t take long for online publishers to realize the potential of making a profit from crypto faucets with an arbitrage-focused business model.
These revenue-generating crypto faucets soon proliferated because of the sustainability brought by the arbitrage business model. Today, there are a myriad of crypto faucets offering reward payouts in many different cryptocurrencies. We also see considerable development in the micropayment wallet space, an essential component of modern crypto faucets.
However, these crypto faucets didn’t receive mainstream attention, due to the low rewards and the amount of time it takes to accumulate them. Modern crypto faucets need to pass the test of time, and we may expect innovative business models bringing mainstream attention.
Different Types of Crypto Faucets
Back in the day, there were crypto-specific faucets paying rewards in only a single cryptocurrency. The first one ever was a Bitcoin faucet, paying only BTC to users who claimed them by solving a captcha. Soon after there were Litecoin faucets, Ethereum faucets and other currency-specific faucets coming into the ecosystem.
Today, crypto faucets have evolved to support reward payouts in multiple cryptocurrencies. You can choose to withdraw your rewards in any of the cryptocurrencies supported on the faucet’s platform.
Here is a list of well-known crypto faucets that are still in the game:
Cointiply.com — Cointiply is one of the most famous Bitcoin faucets. It’s paid over $1.2 million worth of BTC to date, with over 1.7 million users using the platform. Cointiply’s primary focus is on surveys and video ads.
FreeBitcoin — With over 42 million registered users, FreeBitcoin has distributed over $230,000 worth of BTC to date. Its primary focus is on different games, betting, and wagering contests.
Fire Faucet — Fire Faucet supports nine cryptocurrencies. It has a little over half a million registered users and has paid them roughly $496,000 to date.
Free Ethereum — With over 1 million registered users, Free Ethereum is one of the oldest Ethereum crypto faucets. Besides paying rewards in ether, they also have a referral program and an interest-bearing account where you can save your ether at a rate of 8% APY.
ES Faucets — ES Faucets supports 15 different cryptocurrencies. There are 268,447 registered users on the platform, with over 127 million completed claims.
Free Litecoin — One of the earliest Litecoin faucets, Free Litecoin has over 1.4 million registered users who have received more than 8,500 LTC in reward payouts. As with Free Ethereum, it offers a referral program and an interest-bearing account at a rate of 8% APY.
Free LTC — With over 121,496 registered users, Free LTC’s primary focus is on gaming and ads. They have distributed over 8,200 LTC so far.
Altcoin Multicurrency Faucets:
Coinmonster — Coinmonster is an altcoin faucet that supports some popular altcoins like ZRX (0x), XLM (Stellar), USDT (Tether), NPXS (PUNDIX), BTT (BitTorrent) and XTZ (Tezos). Their primary focus is online multiplayer lottery games.
Faucet Crypto — Faucet Crypto is a strong contender in the space, offering 20 different altcoins. They have more than 1.9 million registered users on the platform. Their primary focus is on PTC advertisements, offerwalls and surveys.
TrustDice — TrustDice is an altcoin faucet that supports nine different altcoins. Their focus is on all kinds of online betting, poker games and contests.
The Bottom Line
The concept of crypto faucets started with the mission of spreading awareness about cryptocurrencies. Now, they have evolved into sophisticated platforms with novel business models.
Crypto faucets haven’t received the attention needed for mainstream adoption, and they still need to pass the test of time. However, if you have some spare time and want to earn free crypto, hop over to one of your favorite crypto faucet platforms to earn some pocket change.
So, with the new found knowledge in crypto, why not sign up to Bybit?