Crypto faucets offer a unique way to earn small amounts of a digital asset without an investment, it isn't so much a free money handout though, users have to typically complete simple tasks such as captcha verifications and they will then receive a small amount of a digital asset.
What is a Crypto Faucet?
Free crypto really does exist, it comes in the form of a Crypto Faucet. They get this name as the rewards are small just like small drops of water from a leaky faucet.
Typically a Crypto Faucet comes in the form of a website, you are awarded crypto in exchange for performing tasks like filling out captcha verifications, solving quizzes or watching ads and videos.
Crypto Faucets are typically set up by someone who wants to help onboard new users.
In more recent times Crypto Facuets have become more of a way for faucet owners to make money from ad placements creating an annoying experience for users of a crypto faucet.
Crypto Faucets are designed to provide users with free cryptocurrency to help them start learning about digital currencies and use them.
Due to the low barrier of entry to use a Crypto Faucet people from low-income countries can have access to cryptocurrencies without needing to purchase any.
Bitcoin had the first cryptocurrency faucet, first proposed in 2010 by a software developer called Gavin Andresen as a tool to promote Bitcoin to the broader public. Users of this faucet could earn five Bitcoin for completing a simple task, which seems unimaginable now.
How Do Faucets Work?
Completing tasks on a Crypto Faucet website ranges from playing games to taking surveys or watching videos, completing captcha verifications and watching ads, with many more different varieties.
The earned cryptocurrency is then sent to an online mini-wallet which is issued by the faucets website, similar to a standard wallet, except it can only hold small quantities of crypto.
Most faucets put a minimum amount you have to earn before you can withdraw, typically you earn very small amounts of crypto from faucets, so reaching the minimum amount required can take some time from a whole day to weeks.
Crypto Faucets can be on any blockchain but Bitcoin was the first to have them. In the early days of cryptocurrencies buying Bitcoin was difficult, there were no exchanges.
Giving out Bitcoin is a great way to attract users and drive interest in using the network.
A list of Bitcoin Crypto Faucets can be found here.
Another popular one is Ethereum, you can find a list here.
You can also have faucets for meme coins like Dogecoin. Much like the other faucets you receive a small amount of that coin, a dogecoin faucet website can be found here.
The steps to using a Crypto Faucet usually operate as follows:
Sign up on the faucet website, and avoid giving any personal information if prompted.
Enter your wallet address, for example, your Bitcoin address.
Complete a task for a reward, like solving a captcha or watching a video and receive a small amount of crypto.
Wait for the timeout to finish, this could be a few hours, then you can repeat step 3.
Once you’ve accumulated a specific amount of crypto, you can then withdraw the reward to your own wallet.
Pros and Cons of Crypto Faucets
Whilst free rewards are always nice, you still have to be careful as some crypto faucet owners may refuse to pay out or come up with other ways to not pay.
Crypto Faucets are not perfect by any means, below are some pros and cons of faucets.
Crypto Faucets are a good opportunity for newcomers to crypto to have a low-cost way to learn about cryptocurrencies and how transactions work.
Users of a Crypto Faucet can earn small amounts of crypto without having to invest any money.
The free crypto you’ve received can increase in value over time.
The rewards from Crypto Faucets are very small and most users may not find this a viable option.
The time involved with a Crypto Faucet for the reward makes it not worth the effort.
Some Crypto Faucets could potentially give viruses or pose security risks so be careful when using one.
Crypto Faucets still have an important place within the crypto ecosystem, which serves as a good entry for beginners, offering a straightforward way for newcomers to begin their journey with crypto.
Their relevance has diminished in recent times though as more accessible and profitable ways to earn crypto have emerged.
Crypto Faucets may never become a primary source of income for crypto users, but they are likely to continue to exist offering another avenue for crypto enthusiasts to invest.
If a Crypto Faucet sounds too good to be true, it most likely is. It is important to keep safe whilst within the crypto ecosystem, faucets are certainly not a get-rich-quick scheme.
Want More Cutting-Edge Crypto News?
Sign up to our newsletter at the bottom of the page
This article is intended for educational purposes and is not financial advice.