Crypto Faucet

What is a Crypto Faucet And What Are Its Risks?

Bitcoin and other cryptocurrencies have become some of the hottest investments in recent times. With valuations going far above 5 figures, it’s easy to see why even institutional investors have started getting in on the excitement.

However, we should also remember that cryptocurrencies are 100% decentralized and traded in an unregulated market. All of which means that Bitcoin and other cryptos are not backed by any governments or central monetary authorities.

As a result, crypto prices are known to fluctuate wildly with little-to-no warning. But this hasn’t stopped investors from flooding the market with many hoping to leverage this extreme volatility to earn immense returns.

From the outside looking in, investing in cryptocurrencies is a scary prospect. But there are ways to experiment with crypto without risking one’s entire capital.

And we can do this by visiting crypto faucets.

What are Crypto Faucets?

To put it simply, a crypto faucet is a platform or website that rewards visitors with a small quantity of cryptocurrency in return for completing certain tasks.

For example, some crypto faucets task you with filling in surveys or watching advertisements whereas others require you to play games or just visit the site at a certain time every day.

But why are random people on the internet paying you cryptos to complete seemingly random tasks?

Well, the answer is simple. Some advertisers or companies looking to collect data pay cryptocurrencies to attract a larger audience. Others are game developers who want to test out their offerings by inviting internet users to play-test their creations. The feedback they obtain from here can then be used to make improvements or changes.

Faucets first originated as means of viral marketing in order to generate interest for new cryptocurrencies. They allowed creators to generate interest and hype for a new currency and encouraged new users to experiment and learn more. Nowadays, not much has changed with some developers using faucets to market new tokens.

Benefits of Collecting From Faucets

  1. Free Crypto

The biggest draw that faucets have is obviously the free cryptocurrencies they provide. From Bitcoin to Ethereum and Litecoin, faucets offer a variety of different coins to choose from. So, instead of having to buy crypto on an exchange, some people opt to visit these websites.

You can check the 10 best free Bitcoin faucets in 2022 in this list here.

  1. Risk-Free Way to Explore Crypto

Besides providing free crypto, faucets let potential enthusiasts experiment with and learn about cryptos without having to risk their capital. Given how volatile crypto prices are, it’s definitely much better to collect free crypto from a faucet instead of putting down your own money.

Risks That Come With Crypto Faucets

While faucets are a great way to earn crypto without having to fork out a cent, there are a number of downsides and risks that come with visiting faucets. These are:

  1. Some Faucets Are Scams/Have Malware

Cybercriminals have taken advantage of how popular cryptocurrencies are by setting up scam crypto faucets. These faucets use a combination of social engineering and malware to steal your personal information.

For example, a fraudulent crypto faucet may ask for your personal financial information whereas a genuine faucet only requires your crypto wallet address. Others install viruses or malware on your PC to spy on you or cause damage to your device.

  1. Rewards Are Tiny

A major downside of using crypto faucets comes from the fact that the rewards paid out are often not worth the effort. Bitcoin faucets for example pay out rewards in the form of Satoshis which are the smallest unit of measurement for BTCs. In fact, the time and effort needed to collect enough Satoshis to make up 1 Bitcoin is probably not worth the effort.

Closing Thoughts

Crypto faucets are a great way for inexperienced crypto enthusiasts to come to grips with cryptocurrencies.  However, you shouldn’t expect to get rich overnight from farming these sites but instead use them to improve your knowledge only.

Samuel Edwards
Samuel Edwards is the name you must have heard many times while reading reports related to Finance, that's what he is good at. From Major Investments to Stock Market Updates, he got 'em all. Be ready to blow your mind by the mind-blowing reports of Finance World from Samuel Edwards.