You may or may not have heard of Bitcoin or of cryptocurrency faucet. A cryptocurrency faucet is any website or app which gives away free cryptocurrency
. There are currently many cryptocurrency faucets on the Internet, for Bitcoin and many other forms of cryptocurrency.
The name ‘faucet’ literally means a tap, similar to the ones that you have for the sinks in your home. Following this comparison, the tiny amount of coins that users can claim are sometimes referred to as ‘drops’. To claim their “cryptocurrency coins” at most faucets a user must provide a payment email address and complete a Captcha of some type similar to those used when logging into many websites.
This is to prove the user is human and is not some automated robot set up to “steal” bitcoins. Usually when you make a a claim for the Bitcoin or other cryptocurrency your computer’s IP addess will be recorded. You will then not be allowed to make a claim again for a certain period of time. Some sites allow a user to claim again after as little as five minutes while others require you to wait an hour or more
Because the faucet owner would have to pay a transaction fee for every time that they sent a payment it is generally not a good idea to send tiny amounts of Bitcoin. This is because it would increase their costs and decrease the amount they would be able to provide to their users.
Users who receive a large number of very small transactions from these sites would find themselves having to pay extra high transaction fees when spending them. This is because of the large amount of data required in forming the transaction. Most faucets because of this will hold your “coins” until you reach a certain specified amount, or use a microtransaction service. These services are often referred to as microwallets.
Users therefore have to make multiple visits to a faucet before they can receive a payment. This may not apply to all the alt coins as some may have fee structures more suited to making microtransactions. Users usually have to make multiple visits to a faucet before they can receive a payment.
These sites provide a small amount of free coin to new users. This is in order so that users can try it out without needing to buy any cryptocurrency.
Because using digital curreency is new to most people and sometimes intimidating this is a way for these sites to make the process simpler and break in such users.
In Bitcoin’s early days, many faucets were simply created to encourage more people to use Bitcoin.
Amounts of “coins” given away by faucets is necessarily quite tiny, however, people also become regular users of these services in the hopes of building up an investment over time. Most faucets today are commercial enterprises, which generate revenue from advertising to help pay for the “coins” that they give away. Some faucets have referral programs and this can both increase the number of users to those faucets as well as increasing the amount that a faucet can earn.