When I first started exploring the cryptocurrency space I spent a good amount of time on faucet sites. For those who are not familiar with the concept of faucets, they are websites that dole out tiny amounts of free cryptocurrency to visitors (i.e. they ‘drip’ small amounts of crypto). 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 depending on the site). At that point, you can withdraw your accumulated earnings to a personal wallet. Some faucet sites allow you to claim every 15mins, others every hour, and some only once a day. The frequency at which you can make claims is directly related to the amount of payout. The more often the site allows you to claim, the less BTC you receive with each one.
At this point, you might be asking yourself why a website would ever give out free cryptocurrency. This is a good question and will be explained in a bit. First, I want to describe the experience of discovering crypto faucets in a bit more detail, which for most people happens before they have a firm grasp of how to acquire, use, and trade cryptocurrencies. This was certainly the case with me. As a newcomer to the cryptocurrency space, I lacked the confidence to simply buy cryptocurrency immediately, or even to open an account on an exchange. As a result, when I came across the phenomenon of faucets I was instantly excited and this triggered a frenzied process lasting several weeks where I scoured the internet for different faucet websites, hoping to find one that paid out decent amounts. At that point, I knew I didn’t really understand what these websites were doing and why, but there was so much that I didn’t understand about cryptocurrency that I assumed it was like everything else: somehow legitimate even if obscure to me.
During these weeks, I found all sorts of faucets. Most offered tiny amounts of BTC in exchange for completing a captcha. I later realized these faucets were earning revenue from the numerous ads and pop-ups populating their pages. The infinitesimal crypto payments were a way of drawing people to the site to view and accidentally click ads. Many of the ads were for cloud mining operations, which promised too-good-to-be-true returns in exchange for purchasing hash power from their mining cloud. Frequently, I would also see ads for so-called “investment” sites promising unrealistic returns in exchange for sending them your crypto. 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 claim the crypto, so you’d easily end up accidentally clicking an ad or two per visit. Some of these 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 possibility for many crypto newcomers no doubt. Of course, the actual result of purchasing lottery tickets or otherwise gambling away faucet earnings is that people are simply returning the tiny amount of crypto they earn back to the site.
Another category of faucets that I came across tended to offer fractional 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 more research, I discovered that the electricity that was being used by my computer when this happened was likely worth more than the amount of ETH I was getting back. I quickly stopped using those sites. My mother (who was also getting into cryptocurrency at that time) was also faucetting. She was using one of these ETH faucets and nearing the withdrawal limit (.0002 ETH in this case) after several months of daily visits. One day she went to make a claim and the withdrawal limit was unexpectedly doubled. She gave up on the site at that point.
There is a third category of faucet sites, which are more nefarious. These are sites that profess to also be a wallet service. These sites deposit tiny amounts of crypto into your wallet in exchange for daily logins. Unfortunately, these are often outright scams that entice users to deposit their own crypto. One of two things then happen 1) users attempt to withdraw their coins to no avail 2) the site simply disappears one day taking all deposited coins with it. I wouldn’t really consider these true faucets because a classic faucet is not outright trying to steal your funds. There is much more to say about the faucet wallets however, and I will be exploring them in more detail in an upcoming article. In the meantime, take my advice and don’t bother with ‘daily deposit’ faucets, and if you do register with one, for the love of God do not deposit your own coins.
Now, back to my time with faucets.
The Downside: Faucets are a Time Suck
The thing with faucets is the time they can suck out of your life, which dwarfs whatever amount of coins you get in return. At first, it doesn’t seem to be that time consuming as each claim takes a few minutes, but in actuality it is very disruptive to your day. With faucetting comes a compulsion to make as many claims as possible on as many different sites as possible. Contributing to the compulsion is the fact that many faucet sites offer increasing bonuses for daily consecutive logins or daily bonus payments based on a percentage of claims made over the previous few days. These site designs elicit a sense of urgency in the user to maximize the payout structure by making as many claims as possible in every 24-hour period. This means if a faucet allows claims every 15 minutes, you are watching the clock to try to make four claims an hour; it means waking up in the morning with the first thought of opening the computer and logging into a faucet site(s); it means stepping away from dinner to make your claims (all of this much to the charging of your spouse or partner). Trying to get work done at your day job with the continuous interruption of making claims also gets tiring. All of this accumulates until almost inevitably people give up on faucets. Indeed, after a few weeks, I came to the realization that faucets were not worth my time. I had also learned by then that I could drop $100 into a bitcoin ATM and get several lifetimes’ worth of faucet earnings in one shot.
The Upside: A Gateway into Cryptocurrency
Reading this you might think the point of my story is to expose faucets as not worth the effort and warn newcomers away from them. Although I have not named specific faucet sites in this story to avoid inadvertent advertising, I will say that I don’t have a wholly negative view of them. I actually think they have an important place in the cryptospace. They are a primary gateway through which many people first enter the world of crypto and become comfortable with the concept of digital currency. My first transactions of BTC, ETH, LTC, DASH, and DOGE were all faucet withdrawals. Using faucets gave me the chance to test out wallets and the withdrawal and deposit process, as well as read copious amounts on blockchain technology before attempting to purchase crypto with my own money. In short, faucets gave me time to ease into the whole crypto mindset and wrap my head around some of the technological complexity of blockchain technology. Once I was ready to move on from faucets, I was also ready to create my first cold wallet and open my first major exchange account.