Bitcoin faucets are a reward system, in the form of a website or app, that dispenses rewards in the form of a satoshi, which is a hundredth of a millionth BTC, for visitors to claim in exchange for completing a captcha or task as described by the website. There are also faucets that dispense alternative cryptocurrencies. Gavin Andresen developed Bitcoin faucets in 2010. For Testnet there exist different faucets which give out coins for people who want to do tests on the Testnet3.
Bitcoin faucets are sites that purport to help users earn bitcoins “for free” but often fail to deliver or pay such paltry sums as to make the effort itself pointless.. They usually need to address entry and captcha filling. You can revisit faucets every given time to get more. These sites, which were originally created to promote cryptocurrency and usually offered General information about its capabilities, making payments, etc., and as a bonus after entering Captcha, a small amount was allocated to replenish the newly created wallet, usually several tens or hundreds of Satoshi (1 Satoshi = 0.00000001 BTC). Also, there are bitcoin faucets without a captcha.
This idea has found broad support in the network: many enterprising individuals have realized that it is enough to create a simple website, run a script, to advertise, to invest the small money and share the income from display advertising to visitors. Everyone is happy and everyone with income! You can start to fantasize about how you will accumulate your first bitcoin and leave it to children and grandchildren, providing them, for example, education or housing. Given the dynamics of the bitcoin exchange rate and the fact that it is not subject to inflation and control by governments.
The first faucet was operated by Gavin Andresen, however, it has not functioned since Jan 30, 2013.
Rewards are dispensed at various predetermined intervals of time, as rewards for completing simple tasks such as captcha completion and as prizes from simple games like the bitcoin fidget spinner. Faucets usually give fractions of a bitcoin, but the amount will typically fluctuate according to the value of bitcoin. Typical payout per transaction is less than 1000 satoshi, although some faucets also have random larger rewards. To reduce mining fees, faucets normally save up these small individual payments in their own ledgers, which then add up to make a larger payment that is sent to a user’s bitcoin address.
As bitcoin transactions are irreversible and there are many faucets, they have become targets for hackers stealing the bitcoins.
The distribution is absolutely free, as a rule, it is enough to drive a captcha, which “insures” the tap from draining coins into the pocket of unscrupulous users. Typically, the faucet idea is not to enrich all cryptomelane, and to give the users no possibility of mine to get familiar with the cryptocurrency more closely. To produce, to spend, to exchange, to fill his first 1 BTC.
The ways to earn money
- Advertising. Faucet sites have good attendance and can sell traffic, both in popular banner systems and among the community of cryptocurrency users. Literally-by placing banner ads and links.
- Partner programs. It was also very simple — have “tap” tie up him for own referral links. after all, as a rule, a person walking on the faucet, happy to follow the link or banner of another faucet site. In this case, it is a minimum of 70% of the conversion, and taking into account the number of affiliate programs and interest rates from 25 to 200% of earning your referral, you can have a good profit.
- Community support. In the case of BTC, this is not such a simple method, but it works with less popular cryptocurrencies. You make a faucet of a young fork that does not have its own “cranes” or has them 1–2, notifies the administration and the community that revolves around the cryptocurrency and get donates for the needs of the faucet. Part of the donation typically goes to the developer for the effort. What for? Everything is simple-making faucet fork, you are working on its popularization, increasing the nominal number of users who own coins. Even if most of the coins received, the user will exchange the same day for BTC, some of them he left lying in a long box, and suddenly tomorrow the bounce rate of 10,000 %. Fortunately, the cryptocurrency market is young and generates a real gold rush thanks to such jumps in the rate.
- Money for captcha. Find a service that pays for the solved captcha, ties up through the API to your “ tap “ and has extra money every time someone wants to get free coins through your faucet.
Ways to make money on faucet site can come up with more, to create such a site today is not difficult. Microwallet service, for example, offers a free faucet script in the public domain, you can download, configure and distribute. Next time we talk a little bit about our own experiments with “cranes”.
- To introduce users to bitcoin: Faucets are a great way to help introduce new people to bitcoin, or to altcoins. A majority of faucets provide information to new users as well as offering them some free coins so that they can ‘try before they buy’, experimenting with a test transaction or two before putting real money on the line. Since this whole experience is so new and a bit complicated to people, who perhaps don’t quite trust it with their hard money, this is a beneficial way to promote digital currency and bring in new users.
- To get traffic: Faucets are high traffic websites. It is not all that difficult to get a huge number of page views per day to a site which is giving away free money. If a website has other content or services to promote to Bitcoin users, especially new users, a faucet is a great way to bring them to make them familiar with a brand name.
- To make money: Making a healthy profit from a faucet site on its own is a lot harder than just making a popular faucet, but it is still possible. There are a lot of these sites around today, so it’s a very competitive market, and earning enough from advertising to cover the cost of the coins you are giving away and hosting costs is nearly impossible. Adding additional content to a website, or creating some kind of unique or interesting twist, is the only way to generate an income for a Bitcoin faucet.
It is typical for faucets to have a referral system, where existing users referring to new ones are rewarded with a pro-rata portion of new users’ earnings from the faucet. Unlike illegal pyramid schemes, earnings do not percolate to the top in the chain of referrals. The exact legal status of bitcoin faucets is unclear and can vary by jurisdiction, refer to legality of bitcoin by country.
- Expense — The setting up of a Bitcoin Faucet involves integrating a payments processor/manager. The owner of the Bitcoin Faucet loads some bitcoin into this payments manager’s cryptocurrency wallet. The payout for visitors are given out according to the sites rates/kind of operation.
- Income — Advertisements is the main income source of Faucets. The faucets try to get cheap traffic by giving referral commissions. This ever-increasing traffic helps then earn more on advertisement revenue.
The difference between the cost of Bitcoins invested and the Ad revenue gives the profit. Some Ad networks pay in bitcoins itself. The profit margin for Faucets are very small for most faucets. Only big and established faucets make a profit through the huge amount of cheap traffic coming into their site.
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Originally published at https://cryptonomad.info on September 12, 2019.