• Sun. Apr 14th, 2024

What Is A Crypto Faucet?

crypto faucet

Crypto faucets, one of the oldest and easiest means to earn cryptocurrencies, are of huge relevance in the history of cryptocurrency. Nevertheless, they remain effective cryptocurrency earning options, and just like blockchain technology, crypto faucets are in evolution. Sequel to Gavin Andresen’s bitcoin faucet, the idea saw explosive growth in the early days of cryptocurrency and blockchain technology.

A relatively similar idea – Airdrops have risen to popularity in recent times. Airdrops are arguably a progression from the faucet concept…with more flare.

As opposed to airdrops, the crypto faucet reward system is instant, usually has a wide margin of participation, and last longer. If well managed, a coin faucet could last for years and keep the rewards steady. Airdrops only last for a specified period and adopt a different reward distribution scheme.

Brief History of Crypto Faucets

In 2010, Gavin Andresen gave out over 19,700 bitcoin in the first ever recorded bitcoin faucet program – The Bitcoin Faucet. It is pretty similar to contemporary faucets. Five bitcoins are allocated to each registered user, which is claimed over time in satoshis (1 satoshi = 100 millionth of a bitcoin) after performing captcha completion tasks. Playing some simple games was also part of Gavin’s bitcoin faucet reward task and offered larger rewards.

Gavin developed the faucet as an efficient means to distribute bitcoin ownership and possibly invite people to the growing bitcoin community.

The success of Gavin’s concept inspired other cryptocurrency projects and individuals to create similar platforms, diversify the task system and also develop a more marketing-oriented coin faucet program. Some contemporary crypto faucets distribute rewards in multiple cryptocurrencies

What are the Types of Crypto Faucets?

Crypto faucet technology has been optimized over time; the ease of creating and running a coin faucet has led to the proliferation of faucets. Faucets are popularly named according to the cryptocurrency they remit to users.

Bitcoin Faucets 

Bitcoin faucets are the oldest and most popular cryptocurrency faucets. Most of the older bitcoin faucets have since been deprecated, but a handful of reputable bitcoin faucets still exist. You can claim up to 200 satoshis on Cointiply’s Bitcoin faucet. Discover other recommended bitcoin faucets here.

Ethereum Faucets 

Ethereum faucets reward you in Ether for performing social tasks. Ethereum’s most prominent faucet – Ethereum-faucet.org has since seized its ether remittance service. Freethereum offers up to $300 in Ethereum per hour to each user. Amount claimed is, however, dependent on other factors determined by the faucet owner. Check out other Ethereum faucets here.

Other Coin Faucets

Just like Bitcoin and Ethereum, other cryptocurrency faucets reward you in their traditional coin for performing a basket of social tasks. Explore active faucets for every cryptocurrency here.

How Crypto Faucets Work

Simply put, cryptocurrency faucets reward you with bits of a specified crypto asset for performing simple and varying tasks. You’ve probably come across a number of crypto faucets and used them, to an extent. Bitcoin and Ethereum faucets are more popular. Many other ‘team-managed’ projects have developed faucets as an effective marketing scheme and a cheaper option for airdrops. Individual and community-owned faucets are also quite prominent.

If you consider spending time running simple tasks a less capital-intensive venture; then crypto faucets are one of the “free” means to earn cryptocurrencies. Else, coin faucets are just as good as a polished reward system.

The rewards earned are proportionate to the task performed. There are instances of a disproportionate coin faucet reward system. Well-known crypto faucet tasks include streaming short videos, clicking provided links, and completing a captcha or quizzes. Coin faucets also offer referral rewards for inviting users who successfully register on the faucet.

For the participants, crypto faucets serve one purpose – an easy means to earn cryptocurrencies. On the other hand, faucet owners benefit from their reward program in numerous ways. Mainly marketing, but many faucet-linked websites, videos, and ads are connected to a ‘pay-per-impression’ system, faucet users are rewarded with a fraction of the payment while the faucet creator profits from the rest.

Popular Arguments Against Faucets

Faucets are a brilliant idea and have received wide positive reviews from cryptocurrency communities. But there are still some reservations, this includes;

A low reward system

Gavin Andresen’s ‘The Bitcoin Faucet’ allocated 5 bitcoin per user; this is popularly hyped as ‘lucrative’. But considering the value of bitcoin at the time, it still falls short of the type of rewards certain airdrop programs offer. Crypto faucets’ low reward system is a major turn-off. A good explanation of airdrops’ easy win.

High withdrawal threshold

Relative to the faucet’s reward per claim, most users may find the minimum withdrawal amount too high. Most crypto faucets’ minimum withdrawal amount is set at $5 and claim per hour as low as $0.0003. A good percentage of faucet users abandon the distribution program after unsuccessful attempts to earn up to the withdrawal limit.

Are Crypto Faucets Trustworthy?

Apart from a low reward system and high withdrawal threshold, crypto faucets have endured some infamous events over the years. From the users’ and owners’ end, a number of mishaps have rocked faucet programs and reduced users’ trust in similar programs. Faucet users have reported scams, phishing, and hacks. Faucets suffer almost the same risks as other cryptocurrencies.

There are a good number of legitimate coin faucets, but deceptive ones have reduced general trust in cryptocurrency faucets.

Prominent faucet scams include the inability to withdraw earned coins (even when they are above the minimum withdrawal amount) and shady individuals posing as faucet site owners. Some faucets also exploit users by demanding registration funds. Perfidious faucet programs might redirect users to phishing websites and fake mining sites. Users run a risk of not earning from the faucet program and also losing their funds to phishing scams.

How to Avoid Crypto Faucet Scams

Avoiding faucet scams will require some safety and social awareness skills. Here’s how you can avoid losing out on faucet scams.

Beware of dubious faucet promises

The simple truth is, “if it sounds too good to be true, then it’s probably not true”. But greed clouds personal cognizance and in the pool of our greed, everything sounds good and everything is possible…like getting $3000 daily from a $1000 investment in a shady faucet or mining site.

Scammers exploit users’ belief in easy and quick bucks. Most faucet scams present users with mouth-watering promises and easy bucks for very easy tasks or ‘small initial deposits’. Falling prey to this kind of faucet scam is way easier than you’d think, but also relative to your greed level. Greedy investors are more vulnerable. Fix your greed, but that’s easier said than done.

Perform proper background study on the faucet

If possible, DYOR and run a check on the faucet’s history and record before taking part in the program. Reviews from past users come in handy. Study users’ complaints and appraisals before registration or before performing social tasks. Team details should be checked if available. 

Legitimate crypto faucet projects will never require your wallet seed phrase or personal details for registration. If a starting deposit is requested, do due diligence and take precautions.

Double-check links provided by faucet programs

The internet is filled with phishing links, in the guise of website links, hackers are able to obtain details stored on your device through special links which break through your device permissions and give away vital details stored on your device. Faucets can provide you with phishing links in the guise of their reward task. To stay safer, always determine the authenticity of links presented to you. If looks fishy, then you are about to get Phished…pun intended. Keep safe, click safe links only.

Conclusion

Without a doubt, crypto faucets are a great idea. Considering the development stage of blockchain technology and cryptocurrency, those bits of crypto earned from faucets could be worth more in the future. Who knows? However, it is important to consider the profitability of a coin faucet program (in relation to personal factors) before investing resources in completing social tasks and claiming rewards.

The rise in cryptocurrency scams spreads across every part of the crypto space, including coin faucets. Ensuring the safety and legitimacy of the faucet program and the links provided are of utmost importance. Keep in mind, “if it is too good to be true, then it’s likely not true”.

Looking for ways to earn cryptocurrencies? Consider learning about crypto airdrops and how to yield farm!