What are crypto faucets and how do they work?
On blockchains like the Ethereum Mainnet, fees represented in the blockchain’s cryptocurrency units must be paid for transactions to be performed and recorded. From exchanges, one can purchase Ether (ETH), the native cryptocurrency of the Ethereum blockchain, and pay the transaction costs. However, alternative Ether distribution mechanisms are utilized on test networks like Rinkeby and scientific research blockchains like Bloxberg.
One such method is a faucet, which grants users free cryptocurrency following some predetermined rules. In general, faucets provide a fixed amount of money for a specific time or block. For instance, Bloxberg Blockchain’s web-based faucet offers 0.2 ETH.
Related: What is cryptocurrency? A beginner’s guide to digital currency
So, if you are still wondering, does “free crypto” really exist? The answer is yes! A crypto faucet is nothing more than a website that awards you token sums of cryptocurrency in exchange for performing easy tasks like solving quizzes, watching ads or videos, etc.
But, what is the purpose of a crypto faucet? Crypto faucets are designed to provide users with free cryptocurrency to start learning about digital assets and eventually use them. For instance, the low-income unbanked population can access financial services through a blockchain-powered permissionless network.
In this article, you’ll discover what crypto faucets are, their purpose, the types of crypto faucets, how they work and the various risks associated with crypto faucets.
How does a crypto faucet work?
A crypto faucet’s operation is simple—all you have to do is to register with a digital asset service or visit a cryptocurrency faucet website or app that rewards you with free crypto for playing games, taking part in surveys and watching videos or ads, etc.
The earned cryptocurrency is then sent to your online mini-wallet by the crypto faucets’ website or app. A micro wallet is a type of wallet that is comparable to standard wallets but can hold only modest quantities of cryptocurrency assets. Micro wallets are typically established immediately when you sign up for a crypto faucet.
Advantages of the mini wallet include:
However, you can’t cash out until this micro-allotted wallet reaches a minimum level of rewards (say, $10 cryptocurrency). When that occurs, all of the cryptocurrency is automatically transferred to your actual cryptocurrency wallet. Please note that some websites may place a time limit on how long users have to claim their rewards. Also, if you use a faucet often, the benefits or rewards might grow over time and reach more substantial sums.
What types of crypto faucets are there?
If you want to know how to earn small crypto rewards through crypto faucets, you’ll need to look at various types of crypto faucets. However, please note that faucets are different from airdrops and bounties. While bounties refer to a list of reward-earning tasks (such as detecting defects in the code) offered by a blockchain project, airdrops are typically distributed to users utilizing a specific token or crypto wallet to increase awareness of a particular project.
On the contrary, one can categorize crypto faucets based on the token type that is paid as a reward. For instance, Ethereum faucets reward users a certain amount of ETH for performing tasks like solving captchas, as required by Ethereum-faucet.org.
Additionally, you can earn ETH tokens using Fire Faucet by mining websites and solving captchas. Another Ethereum faucet site that allows you to earn free ETH by completing challenges and playing games is Dutchy CORP. Like Ethereum faucets, users can earn rewards in satoshis, the smallest unit of BTC, by using Bitcoin (BTC) faucets.
Other crypto faucet examples are Litecoin (LTC) and Monero (XMR) faucets. For instance, Moon Litecoin rewards users with free LTC for completing several activities like streaming videos. The micro wallet on Coinpot.co is used to hold users’ modest rewards offered by Moon Litecoin. Similarly, you can get rewards from Monerofaucet.info that are redeemable for between 0.000005 and 0.025 Monero tokens per hour.
Zcash (ZEC) faucets, like other faucets, reward users with free Zcash for doing trivial tasks. For instance, every 20 hours, there is a free Zcash offer on the Globalhive faucet. The typical reward that can be claimed is 0.00003100 ZEC, which may be withdrawn immediately and put in your wallet.
For Tron (TRX) lovers, Tron faucets like Xcolander.com could be an alternative way of earning free crypto. The number you receive while rolling out the wheel on the platform (i.e., Xcolander.com) will determine how many TRX coins you’ll receive.
What are the risks of crypto faucets?
Free rewards are not always legitimate; some are used to defraud users. For example, some cryptocurrency faucet owners refuse to pay consumers despite earning a ton of money from clicks on their advertising or video streaming on their websites or apps. Also, be aware of phishers that make their websites and offerings look licit via email. Never divulge private information to anyone, including your wallet’s address or your private keys, if you don’t know them by heart.
Related: What is a phishing attack in crypto, and how to prevent it?
So, if you want to know, are crypto faucets safe? The answer is to do your research before considering something lawful or illicit. Remember, if you are running towards high-paying crypto faucets without conducting your due diligence, then you may end up lending your priceless time for nothing in return.
Therefore, be wary of websites that seem suspect and have high promises that seem too good to be true. Trustworthy, long-standing brands should be your go-to choices if you want to experiment with crypto faucets. Time amounts of free crypto could potentially lead to a significant sum if you use crypto faucets properly and frequently, especially if the market value of the tokens you’ve gathered increases.
So, should you use a crypto faucet? It all depends upon your availability and the time you are willing to spend to earn free crypto. But, of course, for experienced people like blockchain developers, crypto analysts or researchers, spending considerable time on crypto faucets may not be an ideal choice.
However, students or beginners looking to earn some passive income or free money can invest their time in completing various tasks, as mentioned above. Hence, depending on your experience in the cryptocurrency market and how you utilize it, a crypto faucet may be just a waste of time or a blessing for you.