What is a Crypto Faucet?

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Contributor, Benzinga
September 2, 2022

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Crypto faucets are often used as a reward system. Whether it is from learning about a cryptocurrency, watching an advertisement or earning through a game – crypto faucets are a simple technology that grants users free crypto.

The first crypto faucet gave users free Bitcoin. This faucet was launched in 2010 by Bitcoin developer Gavin Andresen. The faucet rewarded multiple Bitcoin to anyone who would interact with it. Of course, at the time Bitcoin was not worth tens of thousands of dollars like it is today. Rewards today are much smaller. Scams are more present. The currencies offered are less prominent. However, faucets remain important for developers and are often used by solidity programmers building on the Ethereum Network.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts

What is a Crypto Faucet?

Crypto faucets have been around for a while, the first one launched just a year after the birth of Bitcoin. Faucets have since expanded to cover many different cryptocurrencies. However, if you are looking to acquire certain cryptocurrencies, faucets would be one of the slowest ways to do so.

Crypto faucets are also used to participate on a testnet. A common example is an Ethereum testnet (Ropstein, Rinkeby). Testnets don’t use real cryptocurrency. The Ether on these testnets is not tied to any real-world value and is there to help developers run and test their DApps.

If you are looking to begin working with testnets, you can set up a non-custodial wallet and request some on a reliable site. If you are new to wallets in general, it is a way to practice transacting without the risk of losing real money.

How do Crypto Faucets Work?

Crypto faucets work by sending users free crypto once a certain task is met. One example is Coinbase’s learning program. By learning about a cryptocurrency, you can be rewarded in its native token. This process often includes a video and a quiz.

The Risks of Crypto Faucets

Like all things in crypto, users must be wary of scams. Faucets are no different as many phishing scams have been reported. Check a site’s legitimacy before connecting your wallet. Also, digital signatures from your wallet could provide another point of failure, so be sure to understand the premise of what you are signing. Don’t give out your private key or seed phrase. Your wallet and its funds are at the mercy of whoever holds this information. Luckily, many faucets only require you to provide your public wallet address, which is safe.

Faucets are typically not worth the time for most investors, as they only tend to reward a couple of pennies worth of crypto at a time. The risk-reward payoff is not there for many faucets. It may be worth it, however, if you have time to kill and are content to earn a small amount of crypto to earn. 

How to Get Free Crypto With a Crypto Faucet

Crypto faucets often require you to connect your wallet to the site and give personal information. Next, you answer questions or complete a task and the reward is sent to a micro wallet used for accepting small amounts of cryptocurrency with lower gas fees. Many faucets have withdrawal minimums, so you may have to wait until you reach a certain balance before you can take the crypto out. The crypto will then appear in your wallet. Most faucets require a non-custodial wallet like Exodus Wallet.

Other Ways to Earn Free Crypto

Crypto faucets take time and require you to complete tasks. More efficient ways to earn crypto could be to learn skills. You could complete bounties for different projects and be rewarded in crypto. These rewards tend to be much higher than faucets. Even learning simple practices like staking your crypto could prove beneficial. You can earn yield on your money by staking.

Referral programs offer another way to earn crypto. By referring your friends to a platform, you can often earn rewards paid out in crypto. Freecash is one of the fastest growing GPT (get paid to) sites. Users can get started performing quick tasks to earn free cryptos and NFTs quickly and painlesslely. You can earn $1 per 5-10 minute offer and cash out instantly in various different payment methods including cryptos, Paypal and gift cards. This is much more profitable than basically every other crypto faucet!

Are Crypto Faucets Worth it?

For technical users, faucets are vital to getting free Ether to test your code. Ether is needed for gas, which is used to operate smart contracts on the Ethereum network. Also, transferring Ether from wallet to wallet is an important signal if a smart contract is functional. So, users being able to request a limitless amount of test Ether is helpful for code deployment. If you are looking to stack crypto as an investment, you can find much better ways to spend your time doing so. Working a job and purchasing crypto with your earnings is likely a faster way than scouring the internet for faucets.

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