What Is A Crypto Faucet: Coin Faucets And How They Work

2 years ago · Updated 2 years ago

✍️ 14 October, 2022 - 10:48 👤 Editor: Jakub Motyka

Crypto faucets let users earn token rewards by completing simple tasks.
The rewards are incentives aimed at promoting new crypto projects.

The latest news about cryptos, in our Telegram channel.

A crypto faucet is an app or a website that allows users to earn token rewards by performing specific tasks. The term is coined from the analogy that a leaking faucet will eventually fill a cup. The idea behind crypto faucets is to market new blockchain projects.

The first crypto faucet was a Bitcoin faucet created in 2010. The offering was from one of Bitcoin's lead developer, Gavin Andresen. It rewarded 5 BTC for each user who completed a simple captcha. The faucet was meant to educate early bitcoin users. By the end of it, a total of 19,715 BTC had been distributed.

Types of Crypto Faucets

A crypto faucet can be categorized depending on the underlying token. You can have Bitcoin, Ether, XRP, or an LTC faucet.

Of importance to note, a crypto faucet is different from an airdrop. The latter is awarded to users already holding a given token, usually within a specific timeline. Faucets are also distinct from a bounty. For bounties, users get a one-time reward for a one-off task, e.g., a bug bounty.

How Crypto Faucets Work

To subscribe to a crypto faucet, a user must first register an account with an asset service provider. A crypto wallet is also required, and one should pass the verification processes. Once all the onboarding steps are complete, the asset provider automatically creates a micro-wallet for receiving the rewards.

When the rewards accumulate to a certain threshold in the micro-wallet, they are sent to the users’ main digital wallet.

Some of the tasks in a faucet are watching an advert, responding to survey questions, playing a game, or clicking links. Always be cautious on the last one! Popular faucet sites include Ethereum-faucet.org, bestfaucetsites.com, and Moon Litecoin.

Risks When Using Faucets

The Crypto faucet space has numerous scams and fraud. Some sites portrayed as faucets are a source of malware, phishing attacks, spyware, or worse, ransomware. To avoid being a victim, you should only work with established brands endorsed by reputable brokers.

Another risk is not getting value for your time. The more straightforward a faucet task is, the harder it is to earn enough rewards. When you choose to participate in a crypto faucet, always check for the ones that will give you value for your time.

More crypto articles:

Best Reasons To Buy A Crypto Hardware Wallet

Author

Recent Posts

Jared Kirui

EN: Jared Kirui is an experienced financial writer with a passion for all things blockchain technology. Previously, he was into stock markets and forex, providing asset managers with top-notch content. With a flair for producing high-quality articles, he started covering crypto news in 2021. He is open-minded, trades for fun, and enjoys sports.

ES: Jared Kirui es un escritor financiero experimentado apasionado por todo lo relacionado con la tecnología blockchain. Anteriormente, estuvo en los mercados bursátiles y forex, brindando a los administradores de activos contenido de primer nivel. Con un don para producir artículos de alta calidad, comenzó a cubrir noticias crypto en 2021. Tiene una mente abierta, comercia por diversión y disfruta de los deportes.