What are crypto faucets and how do they work?

On blockchains such as the Ethereum Mainnet, fees represented in the blockchain’s cryptocurrency units must be paid for transactions to be executed and recorded. From exchanges, one can buy Ether (ETH), the original cryptocurrency of the Ethereum blockchain, and pay the transaction costs. However, alternative Ether distribution mechanisms are used on test networks such as Rinkeby and scientific research blockchains such as Bloxberg.

One such method is a faucet, which gives users free cryptocurrency according to some predetermined rules. Generally, faucets provide a fixed amount for a specific time or block. For example, Bloxberg Blockchain’s online 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 gives you token sums of cryptocurrency in exchange for performing simple 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 example, the low-income unbanked population can access financial services through a blockchain-powered permissionless network.

In this article, you will find out 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?

The operation of a crypto faucet is simple – all you need to do is register with a digital asset service or visit a cryptocurrency faucet website or app that rewards you with free crypto for playing games, taking surveys, and watching videos or ads, etc.

The earned cryptocurrency is then sent to your online mini-wallet by the crypto faucet’s website or app. A micro-wallet is a type of wallet that is comparable to standard wallets, but can only hold modest amounts of cryptocurrency assets. Microwallets are usually established immediately when you sign up for a crypto faucet.

The benefits of the mini wallet include:

However, you cannot withdraw until this micro-allocated wallet reaches a minimum level of rewards (eg $10 cryptocurrency). When that happens, all cryptocurrency is automatically transferred to your actual cryptocurrency wallet. Please note that some sites 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 can grow over time and reach larger sums.

What types of crypto faucets are there?

If you want to know how to earn small crypto rewards through crypto faucets, you need to look at different 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 using a specific token or crypto wallet to raise 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 example, Ethereum faucets reward users with a certain amount of ETH for performing tasks such as 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 examples of crypto faucets are Litecoin (LTC) and Monero (XMR) faucets. For example, Moon Litecoin rewards users with free LTC for completing several activities such as streaming videos. The microwallet at Coinpot.co is used to hold users’ modest rewards offered by Moon Litecoin. Similarly, you can get rewards from Monerofaucet.info which can be redeemed 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 example, 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 can be withdrawn instantly and placed in your wallet.

For Tron (TRX) lovers, Tron faucets like Xcolander.com can be an alternative way to earn free crypto. The number you receive while rolling out the wheel on the platform (ie Xcolander.com) will determine how many TRX coins you will 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 making tons of money from clicks on advertisements or video streaming on their websites or apps. Also, be aware of phishers who make their websites and offers look legitimate via email. Never give private information to anyone, including your wallet address or your private keys, if you don’t know them by heart.

Related: What is a crypto phishing attack and how to prevent it?

So if you want to know, are crypto faucets safe? The answer is to do research before considering something legal or illegal. Remember, if you run into high paying crypto faucets without doing your due diligence, you may end up borrowing your precious time in return.

Therefore, be wary of websites that seem suspicious and make lofty promises that seem too good to be true. Trusted, long-standing brands should be your choices if you want to experiment with crypto faucets. Time amounts of free crypto can potentially lead to a significant sum if you use crypto faucets correctly and often, especially if the market value of the tokens you have accumulated increases.

So, should you use a crypto faucet? It all depends on your availability and the time you are willing to spend to earn free crypto. But of course, for experienced people like blockchain developers, cryptanalysts or researchers, spending a lot of time on crypto faucets might not be an ideal choice.

However, students or beginners who want to earn some passive income or free money can invest their time in completing various tasks, as mentioned above. Therefore, depending on your experience in the cryptocurrency market and how you use it, a crypto faucet can be just a waste of time or a blessing for you.