What is a Bitcoin / Cryptocurrency Faucet?
A faucet is the name given to any website or app which gives away free coins. There are many bitcoin faucets on the net, as well as many similar service for other coins.
The name ‘faucet’ literally means a tap, like the ones you have for your kitchen and bathroom sinks. Following this same metaphor, the small amount of coins that users are able to claim from the site are often called ‘drops’. At most faucet sites a user may claim their free coins by providing a payment address and completing a Captcha puzzle to prove that they are human. Usually your computer’s IP address will be recorded when you make a claim, and you will not be able claim again for a set period of time.
Sending tiny amounts of Bitcoin, and many alt coins, is generally not a good idea. The faucet owner would have to pay a transaction fee every time they sent a payment, increasing their costs and decreasing the amount they would be able to give to their visitors. Meanwhile, users who received a large number of very small transactions from these sites would find themselves have to pay extra high transaction fees when spending them because of the large amount of data required to form the transaction. Because of these two factors, most faucets will hold your coins until you reach a certain threshold, or use a microtransaction service such as FaucetBox or Microwallet to do so on their behalf. It is therefore common for users to have to make multiple visits to a faucet before they can receive a payment. This may not be the case for alt coins with fee structures more suited to use for making microtransactions.
The main purpose of these sites is to provide a small amount of free coin to new users, so that they can try it out without needing to buy any. This is considered important because using digital currency is a very new, different, and sometimes intimidating experience for many users. There is also no authority to appeal to in order to correct your mistakes if you do something wrong. Some people may therefore be put off using the technology if they were forced to spend money without having first gained confidence in its use. In the early days of Bitcoin, most faucets were created as a public service by enthusiasts who wanted to encourage others to use Bitcoin.
Although the amount given away by faucets is necessarily quite tiny, some people also become regular users of these services in the hopes of building up an investment in the currency over time. It is also the case that most faucets today are commercial enterprises, which generate revenue from advertising in order to pay for the coins which they give away.« Back to Glossary Index