What Is a Crypto Faucet?
If you heard that a website was giving away bitcoins, you'd probably be a bit skeptical. Although many of these sites are scams, it doesn't mean they're all fake. In fact, websites called "cryptocurrency faucets" played an integral role in spreading information on blockchain tech by giving away free bitcoins.
Crypto faucets can be a legitimate way to earn free cryptocurrency, but you have to be careful about which sites you use. Let's review what a crypto faucet is and share a few tips to ensure you're on a secure faucet portal.
What is a crypto faucet?
Crypto faucets are apps or websites that give out small crypto rewards in exchange for completing simple tasks. The term "faucet" highlights the fact that these sites only give out a tiny "drop" of crypto payouts. Faucets were never intended to make people crypto millionaires. Instead, these applications gave out a bit of Bitcoin to people in the hopes that they would learn and use these digital assets.
The prominent Bitcoin developer Gavin Andresen invented the concept of a crypto faucet. Interestingly, Andresen's initial Bitcoin faucet rewarded people with up to five BTC per day. Estimates also suggest that Andresen gave away about 19,700 bitcoins on his faucet in 2010, which was worth only $15.76 at the time. However, if it were this situation at the time of writing, Anderson would have lost more than $500 million!
Understandably, today's crypto faucets no longer give away such generous rewards. Indeed, most faucets now measure their rewards in "Satoshis," which refers to the smallest increment of one bitcoin.
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One Satoshi equals 0.00000001 BTC (or 0.0002 USD if BTC is worth $20,000). So, if you were to earn 100 Satoshis from playing a game on a faucet, you’d have 0.000001 BTC (0.02 USD if BTC is $20,000 per coin).
Every crypto faucet has different rules for earning and redeeming crypto, but all require users to have a private crypto wallet. When you want to claim your rewards on a faucet, you submit the public wallet address for whatever token you want as a reward.
What’s the purpose of crypto faucets?
The primary goal of crypto faucets is to spread awareness of cryptocurrency. In the early 2010s, few people knew about Bitcoin, and even fewer knew how to buy, trade, and store it. Developers created faucets as a fun way to encourage people to give cryptocurrency a "test run."
By making it easy to claim small amounts of crypto on these faucets, it helped get more people involved in the crypto space.
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