Bitcoin faucets are websites that reward their visitors in a small amount of Bitcoin (Satoshis) or other altcoins.
There are thousands of sites where you can find Bitcoin faucets, most of them being covered by advertisements. Various websites frequently link the reward to a lottery game or solve a captcha puzzle, to confirm that a robot script is not draining the Satoshis and to attract more visitors by increasing the time they spend viewing ads on their website before they release the reward.
The time intervals that Bitcoin faucets give away rewards for visiting the website can vary; faucets give the award on an hourly or minute basis, and the amount of Satoshis can range from 100 Satoshis (0.000001BTC) up to 10,000 Satoshis.
Created by Gavin Andersen in 2010, the first Bitcoin faucet served as an educational tool to introduce people to the new digital currency. In exchange, visitors received 5 Bitcoins, which at the time was priced at $0.08 USD. Additionally, Bitcoin faucets have proven to be an excellent alternative source for generating traffic to a website, to promote other services or to create passive income.
Bitcoin faucets generally make money by the numerous ads on the website (on a CPM basis) and generate traffic through a referral system. Referrals are incentivized with a percentage of the rewarded Satoshis for each new visitor. Moreover, as the reward is recurring, faucets depend on the fact that users will visit the website frequently.
After spending a respected amount of time on the website (to solve the Captcha puzzle or play a simple game), the users can claim their rewards. The rewards will then be delivered to the public address of their (previously installed) wallet, only after they have reached minimum cash out limit, defined by the faucet owners. This tactic is used by faucet owners to keep users visiting the website, who usually stop using the service as soon as they realize that the rewards are small compared to the time invested.
To save time and to enable users to generate more money, some websites provide a selection of Bitcoin faucets where a user can quickly hop from faucet to faucet and collect multiple rewards. Such a service is called a faucet rotator.
The rewards given by the Bitcoin faucets fluctuate and differ from website to website. As the price of Bitcoin was about $10,000 in February 2018, the faucets’ rewards have immensely decreased. One could spend his whole day to collect money from such services, but at the end of the day, he would just make a few dollars. It would be safe to say then, that profitability depends on what someone considers profitable. Amounts from collecting Bitcoin faucet rewards may be insignificant for USA or EU countries but could make sense in some Asian or African countries, where this amount of money could have a useful value.
From the faucet owners’ point of view, while setting up a Bitcoin (or altcoin) faucet is relatively easy, generating traffic for a website is a costly activity at the same time. Such costs include URL hosting, a faucet client fee and of course funding for the rewards that will be offered. Advertising is the only source of income for a faucet, and since Google (the largest player) has banned faucets from implementing Google Adsense to such websites, faucets use alternative methods (e.g., CoinURL or AdBit) to display low-quality ads. Another way to bypass Google’s restrictions would be to embody a faucet in an existing website that offers useful content or services and is not operating as a faucet only.
Furthermore, as the Bitcoin transaction fees have increased tremendously along with the price of Bitcoin, faucets have been turned into a questionable activity (regarding profits). With this said, running a Bitcoin faucet requires an enormous amount of traffic, which would never create a remarkable wealth but could generate a few hundreds of dollars per month, that could cover utility expenses.