Owning cryptocurrencies has gotten more mainstream in the past 5 years, as over 320 million people own and use crypto in the world. The most popular ways to own crypto include minting, buying, trading, or earning it through airdrops.
This article introduces you to another way to get crypto, and it’s perhaps one of the simplest. This method is called a crypto faucet. Let’s get into more details about this concept.
What is a crypto faucet?
A crypto faucet is an app or website that rewards users with small amounts of crypto when they complete simple tasks. These could be anything from watching ads to downloading apps, visiting a website, or solving a ReCaptcha.
It’s like getting a discount when you download a new app for your phone or sign up for a new online service. This reward system makes crypto faucets an excellent way for new users to explore cryptocurrencies.
The faucet gave out a total of 19,715 BTC, which helped widely distribute BTC among several hundred owners. In this way, the faucet encouraged bitcoin education and adoption among early investors.
The rewards you could earn in a crypto faucet have gotten smaller as the concept and crypto trading generally become more popular.
On the flip side, new crypto projects must attract new users, and many people can learn about crypto through faucets. Crypto faucets also help to connect supply and demand in the cryptocurrency market.
How does a crypto faucet work?
Most crypto faucets are designed to be simple and user-friendly. Typically, users must first create an account with the digital asset service.
Most crypto faucets will require you to have a micro wallet address. This is a digital wallet that holds tiny amounts of crypto assets. Its transaction fees are often lower than those on regular crypto wallets.
Afterward, you create an account by entering your personal data and wallet addresses. If you successfully complete the tasks the crypto faucet provider gives, you receive a crypto payment directly in your wallet.
The tasks are often simple, like watching videos, reading articles, watching ads, playing games, and taking quizzes or surveys.
The crypto faucet provider may also ask you to refer your friends to participate in it. Often, the website or app offering the faucets might adjust the rewards and set a time limit/lock for users to claim them.
A timelock is a smart contract that allows you to earn or receive crypto when you meet specified conditions.
If you use a faucet regularly, the incentives may add up over time and reach significant sums. Often, the faucet provider may require you to amass your rewards before you can cash out.
How is a crypto faucet different from an airdrop?
On the surface, you might think a crypto faucet and an airdrop mean the same thing —after all, they both give out crypto for free — but they are not.
For one, they have different goals. Faucets encourage users to return to a website as often as possible. Hence, the assigned tasks are often repetitive, so you spend more time on their platform.
On the other hand, airdrops are designed to attract groups of people rather than individual users. Most startups often give out their native tokens to raise awareness.
Also, crypto faucets motivate you to return to the platform to complete more tasks and earn more rewards. But, airdrops are often a one-time promotional event.
Lastly, a crypto faucet frequently gives out rewards in small amounts, while airdrops are less frequent, so the incentives are bigger.
What are the risks of crypto faucets?
Many crypto scams and frauds masquerade as faucets. These scams could infect your computer with malware that steals or wipes off your data.
Another disadvantage of crypto faucets is that the rewards might be too small or the tasks too time-consuming to make them worthwhile.
Ideally, you should look for crypto faucets with a good reputation that can likely create enough coin payouts to make your time and effort profitable.
Finally, it is always a good idea to be extremely careful. Do your own research before participating in crypto faucets or any other type of crypto giveaway for that matter.