Bitcoin Faucets: The Good, the Bad, and the Ugly
When I first started exploring the cryptocurrency world I spent some time on Bitcoin faucet sites. For those who are unfamiliar with faucet sites, they are websites that dole out tiny amounts of free cryptocurrency to visitors (i.e. they ‘drip’ small amounts of Bitcoin and altcoins). Typically, you claim the free coins by clicking a button and completing a captcha. The coins slowly build up in your account on the site until you hit the minimum withdrawal limit (I’ve seen this vary from .0001 to .001 BTC). At that point, you withdraw your accumulated earnings to a personal wallet. Some faucet sites allow you to claim every 15 minutes, others every hour, and some only once a day. The frequency with you can make claims is related to the payout. The more often the site allows you to claim, the less BTC you receive with each claim.
You might be asking why a website would ever give out free Bitcoin? It’s a good question and I’ll explain in a bit. First, I want to talk about the experience of first discovering faucets.
Free Bitcoin? ?
Most people encounter faucets early in their Bitcoin careers. It happens before they have a firm grasp of how to get, use, and trade cryptocurrencies. This was the case with me. As a newcomer to cryptocurrency, I was nervous about buying Bitcoin on an exchange. When I came across my first Bitcoin faucet I was excited. It spent a frenzied few weeks scouring the internet for more faucet sites, hoping to finding one that paid out higher amounts of BTC. At that point, I didn’t really understand why the websites were giving out Bitcoin. However, there was so much I still didn’t understand about cryptocurrency I assumed the faucets were somehow legitimate even if a bit mysterious to me.
During these weeks, I found all sorts of faucets. Most offered tiny amounts of Bitcoin in exchange for completing a captcha. I later realized these faucets were earning revenue from the numerous ads and pop-ups populating their pages (a good example of this are the Moon Faucets). The minuscule Bitcoin payments were a way of drawing people to the site to view and to hopefully accidentally click ads. Many of the ads were for cloud mining operations promising too-good-to-be-true returns. Often, I would see ads for so-called investment sites also promising unrealistic returns. Ads for other faucets sites would pop-up too, as would ads for ICOs.
The pages were designed in ways that often made it difficult to tell where you were supposed to click to make a claim. It was easy to end up accidentally clicking an ad or two. Some of the faucet sites offered lotteries and gambling games that could be played with the crypto they doled out. These options held out the possibility of turning a handful of satoshis into full Bitcoins, an intoxicating prospect for many newcomers. Of course, the actual result of buying lottery tickets or otherwise gambling faucet earnings is that you end up simply returning the tiny amount of crypto you earned back to the site.
I also came across Ethereum faucets that offered tiny amounts of ETH in exchange for completing a captcha. I later discovered these sites were highjacking my computer’s CPU for the purposes of mining. After doing a bit of research I discovered the electricity being used by my computer when this happened was likely worth more than the ETH I was getting back. I quickly stopped using those sites. My mother was also getting into cryptocurrency at that time and using these faucets. After several weeks of daily visits, she was nearing the withdrawal limit (.0002 ETH) on one of them. However, she went to make a withdrawal only to see it had doubled. At that point, she gave up on the site.
The Ugly: Faucet Scams
While mining faucet hijack your CPU and ad-based faucets are trying to lure you to view ads, a third category of faucet sites is even more nefarious. These are sites that profess to be online wallet services that deposit tiny amounts of crypto into your wallet on their site in exchange for daily logins. Unfortunately, these are effectively always outright scams designed to separate you from your crypto. If you deposit anything one of two things will happen: 1) you attempt to withdraw it to no avail 2) the site simply disappears taking all your deposited coins with it.
Technically speaking, faucet wallets aren’t true faucets because a true faucet is not outright trying to steal your funds. Take my advice and don’t bother with faucet wallets at all, and if you do register with one, do not deposit any coins.
The Bad: Faucets Take a lot of Time
Faucets can really suck time out of your life, which dwarfs whatever amount of Bitcoin you get in return. At first, it doesn’t seem like that much. Each claim only takes a few minutes. Yet, in reality it can be very disruptive to your day. With faucets comes a compulsion to make as many claims as possible on as many different sites as possible. Contributing to this is the fact that many faucet sites offer bonuses for daily consecutive logins or as a percentage of claims made over the previous few days. These site designs elicit a sense of urgency to maximize the payout structure with as many claims as possible.
This means if a faucet allows claims every 15 minutes, you watch the clock to make four claims an hour. It means you wake up in the morning with the thought of making a claim on a faucet site(s). It means stepping away from dinner to make claims (much to the chagrin of your spouse or partner). Getting stuff done at your day job with the continuous interruption of making claims also gets tiring. This all accumulates until almost inevitably people give up faucets. Indeed, after a few weeks, I came to realize faucets weren’t worth the time. I had learned by then that I could drop $100 into a Bitcoin ATM and get several lifetimes’ worth of faucet earnings in one shot.
The Good: Faucets are a Gateway into Cryptocurrency
You might think my point is to denounce faucets as a waste of time. This is not the case. I don’t have a wholly negative view of faucets. While there are scams out there you need to watch out for (like the fake faucet wallets), I think that legit faucets play an important role in the cryptocurrency world. They are a gateway for many newcomers. They let people to get comfortable with the concept of digital currency before taking on any financial risk. Faucets gave me the chance to test out wallets and read about blockchain technology before attempting to purchase Bitcoin with my own money. My first transactions of BTC, ETH, LTC, DASH, and DOGE were all faucet withdrawals.
In short, faucets come with some risk and they can waste a lot of your time, but they also give the curious time to wrap their heads around the concept of digital currency. Indeed, once I was ready to move on from faucets I was also ready to create my first cold wallet and open an account on an exchange.