How do bitcoin faucets work?

Apr 29, 2020

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Updated 21st November 2021

How Do Bitcoin Faucets Work?

A bitcoin faucet is a portal that dispenses very small amounts of bitcoin for completing a task. Faucets can assume many forms, with the most common appearing as a web page containing a captcha or questionnaire that must be completed. Every time you do so, you’ll earn a few satoshis – the smallest unit of a bitcoin. Learn what a satoshi is and how much it is worth.

Knowing what a bitcoin faucet looks like is one thing, however. Understanding how they work is quite another. In this article, you’ll learn the mechanics underpinning bitcoin faucets, including:

Where the free coins come from
How faucets limit the amount that you can earn
How the bitcoin faucet economy works

A bitcoin faucet is a rewards system that dispenses fractions of BTC at a time. The name ‘faucet’ is of course a reference to the tap-like system that sees bitcoin drip out slowly over time.

Bitcoin Faucets: The Basics

A bitcoin faucet is a rewards system that dispenses fractions of BTC at a time. The name ‘faucet’ is of course a reference to the tap-like system that sees bitcoin drip out slowly over time. Bitcoin faucets have evolved greatly, and today any sort of rewards scheme that disburses remuneration in the form of cryptocurrency can technically be deemed a faucet.

This article is primarily concerned with the traditional bitcoin faucet: a web page that you visit and are prompted to enter your bitcoin address or to create an account that provides a built-in bitcoin address. You then spend time on the site, consuming adverts, completing surveys or performing other tasks and are rewarded in satoshis. This is by far the most common bitcoin faucet you will encounter and it’s also the easiest to understand.

How Bitcoin Faucets Work

Bitcoin faucets are part of the attention economy, in that they reward you – the web user – for your attention, or time. Faucets are placed on high traffic web pages, because these have value to advertisers, who may place banner ads, video, pop-ups, and other types of native advertising.

While you are on the site, you are exposed to these ads, which essentially earns you credit with these advertisers. Even if you never purchase one of their products, the act of watching one of their ads is enough to earn you a reward.

This may sound spammy, but this is how the entire digital advertising industry basically works. All that’s different when visiting a bitcoin faucet is that the ads are ramped up, causing you to view a concentrated form of digital advertising.

While some web users balk at being forced to view adverts, others see it as a way to monetize their time. You’re gonna be browsing the web anyway, so why not earn a passive income while you consume content?

How Bitcoin Faucets Limit Abuse

The concept of a bitcoin faucet drip-dripping out free money on the reg may sound like an easy way to make money, but there are a few caveats attached. For one thing, the amount you can claim per session is capped. Most bitcoin faucets will enable you to earn between 200 and 1,000 sats at a time.

For reference, 1,000 sats is worth just under a US cent, based on current prices. Thus, you’ll need to hit up that faucet a few times if you’re to accrue a sum worth saving.

In addition to capping the maximum payout, bitcoin faucets rate-limit users. You may be entitled to access the faucet only once a day, or once every six hours for instance. Other faucets, however, do not apply such stringent limits, and allow you to remain on the page, viewing ads and completing other tasks, while your balance increases. Even so, however, the maximum amount you can earn will still be limited by time and on-page activity.

Finally, bitcoin faucets set a minimum withdrawal amount. This may be something like 0.001 BTC, which would require 10x 1,000-satoshi payouts to meet. Some bitcoin faucets charge a withdrawal fee, which will further diminish your earnings, though others don’t mandate this.

How Bitcoin Faucets Can Afford to Pay Out

If a bitcoin faucet is filled with coins, what happens when they’ve all been claimed? Is it possible for a faucet to run dry? In theory, this shouldn’t happen. The operator of the faucet earns revenue from the advertisers who position ads and videos on their high traffic page.

The advertiser will be charged a flat rate per 1,000 impressions. This arrangement enables the faucet operator to keep the service stocked with satoshis. They are incentivised to limit the amount of times a single user can claim free coins to prevent abuse, but beyond that, it is in their interest to encourage as many people as possible to use the faucet.

How to Build a Bitcoin Faucet

Building a bitcoin faucet doesn’t necessarily call for advanced technical skills; in fact there are Wordpress plugins that can handle much of the heavy lifting for you. It’s also easy to find advertisers willing to pay for placement on your web page. The hard part, and this is where your time and skills will be called into use, is building enough traffic.

For a faucet to be economically viable for you to run, you need to get a steady stream of web users landing on the page. If you achieve this, you’ll be able to charge more per 1,000 impressions, and to pay faucet users more, which will drive yet more traffic and create a self-perpetuating feedback loop. Without the traffic, you are paying out more in bitcoin than you are making in ad revenue, and that is without considering website over-heads such as hosting.

Are bitcoin faucets for you?

Bitcoin faucets work by converting user attention into satoshis, using the rule that time = money. The more time you spend on the page, and content you consume, the more you can expect to earn.

Bitcoin faucets can be styled very differently, but the fundamentals underpinning them remain constant. Understanding how a faucet works, and where the free satoshis you can claim come from, will help you acknowledge the limits on what you can expect to earn from a bitcoin faucet. It will also teach you what to look for when searching for a reliable bitcoin faucet to use: high payouts, low withdrawal limit, low (or ideally no) withdrawal fee, and the ability to return frequently to claim more micro units of bitcoin. Happy hunting.

Grow Your Stack at Cloudbet

The Cloudbet blog is focused on sharing ways to grow your stack. Bitcoin faucets are a real opportunity to accumulate crypto, albeit requiring your time and attention in return. Once you get a foot on the first rung, you can really boost your portfolio by moving from accumulation to speculation, and depositing your coins at Cloudbet. You an even use a credit or debit card to get started: