Most simply stated, a cryptocurrency faucet is a website that gives out small amounts of cryptocurrencies as a reward for doing small tasks. They’re called faucets because the rewards are quite small, like the dripping of water from a faucet, but in this case it is cryptocurrencies that are slowly dripping into your cryptocurrency wallet.
The tasks performed are usually completing a captcha, but it might also involve clicking links or viewing ads. In the case of Bitcoin faucets the payouts are awarded in Satoshi, or one-hundred-millionth of a Bitcoin = 0.000000001 BTC.
Most faucets have a minimum payment threshold, so the cryptocurrencies earned through the faucet are deposited into a wallet on the faucet site, and can be withdrawn to the users chosen wallet once the minimum is reached. In some cases this might take just days, but often it can take a week or longer to meet the minimum payout.
So, as you might have already guessed, cryptocurrency faucets aren’t a get rich quick scheme. The real attraction is in the hopes that the value of cryptocurrencies will continue to grow. In this way, a $0.10 faucet payout today might be worth $1 or even $10 at some time in the future.
The Purpose of a Cryptocurrency Faucet
Cryptocurrencies are still quite new, with many people around the world just learning what it is, not to mention how to hold it in cryptocurrency wallets, or how to invest in it and add it to a balanced portfolio of assets.
The first cryptocurrency faucets were Bitcoin faucets, and they were created to spread the word about Bitcoin when it was still very new. The idea was that if people were given Bitcoin they would take the time to learn what it is, and hopefully invest more in the new decentralized currency. It was a risk-free way to get Bitcoin into the hands of the general population.
The Bitcoin faucets were so popular that other cryptocurrencies began offering faucets as well. In addition to giving out free coins, they also serve as information portals about the cryptocurrency they dispense in many cases. It’s an easy way to get new users interested in cryptocurrencies, without having to risk any money. As you would expect, faucets have grown tremendously in popularity as people are always happy to receive something free.
What are Micro-wallets?
A micro-wallet is similar to traditional desktop or online wallets, but it differs because it is used to collect small amounts of cryptocurrency, and is usually limited to a small total amount that it can hold.
These micro-wallets are included with your faucet account, and they’re used because the fees to transfer the small amounts paid daily by the faucet would wipe out any earnings. Using a micro-wallet allows you to accumulate a larger amount of cryptocurrency before transferring to your own wallet so the fees don’t eat up the entire transfer.