What Are Crypto Faucets and Why Are They Important to the Crypto Community?
2022.06.25 07:16
What Are Crypto Faucets and Why Are They Important to the Crypto Community?
Getting free things is usually satisfying and often irresistible for most people, which is why gifting is a natural approach to bringing excitement to our loved ones. However, as much as everyone desires free things, some things are meant to be earned, even if it means putting in the bare minimum effort.
In the crypto space, most crypto projects offer different opportunities in which customers can either generate or maximize wealth. Either way, nothing comes for free, but in some cases, some crypto projects offer a relatively easy path to generating and accumulating wealth. Think of Crypto Airdrops!
Although the general perception about crypto airdrops is that they are offered for free, in a real sense, people have to work for them. For instance, to be eligible for most crypto airdrops, you must have fulfilled some requirements, which may include, but are not limited to the following;
First, you must have set up an account (i.e. create a compatible crypto wallet) for the particular project; secondly, you must apply for the project’s whitelist (which includes providing a valid email), and in some cases, some projects will require you to share about them on various social media networks that you belong to.
All of these requirements, when fulfilled, mean that you as a person have contributed to a project’s marketing effort, and so, you deserve to be rewarded for your input, even if it means you can’t cash out almost immediately as with most airdrops.
That said, it would be unrealistic to think that one can really earn anything of value for free, especially within the crypto space. But regardless, there are websites that make the process of earning cryptocurrency very seamless, which is the main purpose of this article. Keeping that in mind, let’s begin by describing the umbrella term for this kind of website.
What Is a Crypto Faucet?
A crypto faucet is described differently across various platforms; however, it is commonly defined to be a website that distributes crypto assets as rewards for participating in and completing different tasks, the majority of which are very easy.
While there may be different websites that operate similar models, these particular ones are called “faucets” because they offer very few rewards. You can compare the rewards offered by these websites to drops of water from a real faucet, especially when closed.
Although going by the popular saying that a drop of water makes an ocean, one can equally expect that rewards from various faucets, when accumulated and sent to an individual’s wallet, can be very valuable.
However, this also means that a person must put in the effort to get these rewards, implying that in addition to registering on various crypto faucets, the various tasks must be completed. These tasks, however, may range from simple activities such as streaming product videos to completing quizzes, answering questionnaires, and in some cases, publishing content.
How Do Crypto Faucets Work?
Because they are not get-rich-quick schemes, crypto faucets operate with structure and mostly adopt a peculiar reward system to incentivize participants. But before we proceed to evaluate the technical aspects of how a crypto faucet works, it is important to keep in mind that the simpler the task, the lesser the reward.
That said, the way crypto faucets work is as simple as it can be. Essentially, each crypto faucet is hosted on a decentralized blockchain, since they tend to issue their own native cryptocurrency. However, that doesn’t mean that all crypto faucets issue only native assets; there are some that offer multiple crypto assets based on the amount of partnership they are able to secure.
In addition, each crypto faucet is designed to be task-driven and engaging, implying that each one provides a couple of tasks to ensure engagement from users. Notable tasks offered on these websites include viewing commercials, playing games, solving puzzles, providing computational support for crypto mining, and many more.
By engaging in any of these activities, the crypto faucet proceeds to employ its AI-driven analytic system to evaluate the completed task to see if it meets preset requirements, and subsequently reward successful participants with bits of crypto assets made available for a given task.
So let’s put the above analogy into context using a popular Bitcoin Cash Faucet like Bitcoin.com as an example. Primarily there are three major steps to participate here; the first is to download the platform’s dedicated wallet application from the app store, then proceed to verify your account using a Google (NASDAQ:GOOGL) account, and thirdly, after completing awarded tasks, paste the BCH wallet address where the reward is being credited.
Before we proceed, it is also important to note that most crypto faucets, because they pay out fractions of crypto-assets as rewards, require micro wallets.
This type of wallet, although similar to the traditional crypto wallet, is specifically designed to receive small units of crypto assets. Usually, users can transfer from this wallet only when they have accumulated enough crypto assets to be received by a traditional wallet.
BCH requires participants to let as many people as possible know about their services, using an affiliation link through which newly onboarded signees can join the platform. This way, the faucet system will mark an individual’s task as completed only if a new user registers on the platform through the assigned affiliation link.
Mind you, while the task may vary across the board, the underlying concept or mechanism of most crypto faucets is usually the same. Regardless, each crypto faucet adopts its own unique reward system, which is usually one of the major differentiating factors among them.
Furthermore, a crypto faucet usually offers only a fraction of the native asset or any other asset awarded to users. For most Bitcoin faucets, users are usually awarded in Satoshi, a micro-unit of Bitcoin or the equivalent of 1/100th million (i.e 0.00000001 BTC).
Why Are Crypto Faucets Important to the Crypto Community?
To begin with, crypto faucets serve different purposes, some of which include creating awareness for a crypto project, alignment of interest among beneficiaries, reward distribution, and in some cases, could be used as an alternative mechanism to airdrops, and Initial Coin Offerings (ICO).
Likewise, crypto faucets, in addition to aiding rapid crypto adoption, give room for participants to experiment with awarded crypto, especially for a project that is new to the market.
For instance, the first Bitcoin faucet reportedly launched in 2010 about a year after the Bitcoin network launched. Then, when a single BTC was priced at around $0.0008, the faucet paid out up to 5 BTC in rewards, with the main aim of driving adoption and awareness among early adopters.
By the time the said Bitcoin faucet closed in 2012, it had given out nearly 20K BTC in total. In contrast, most BTC faucets today pay in fractions of a Bitcoin (i.e Satoshies), given its popularity as the most valuable crypto asset. Other crypto faucets like Ethereum Faucets, ZCash Faucets, and Litecoin Faucets, etc., also pay rewards in micro portions of their native currency.
The importance of crypto faucets for the crypto community cannot be underplayed, as they are essential to continuous market growth.
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