DEFINITION of Bitcoin Faucets

Bitcoin faucets are reward systems that are run on exclusive websites, portals, or digital apps. They are used to reward users by paying them small amounts of satoshi in exchange for completing a task.

BREAKING DOWN Bitcoin Faucets

A bitcoin faucet allows one to earn satoshi, which is a fraction of a bitcoin, either by performing a simple task – like solving a captcha puzzle or completing surveys - or by visiting an advertiser/partner website for a specified period of time. In addition to bitcoin, there are faucets for other cryptocurrencies as well.

The first-ever bitcoin faucet was designed and operated by Gavin Andersen in 2010, when it was used to give up to five bitcoins to visitors. At present, there are hundreds of bitcoin faucets which mainly run as referral systems, making visitors click on a variety of ads.

With the cryptocurrency space getting more crowded, the profit potential and trustworthiness of bitcoin faucet schemes have become questionable. (See also: How Bitcoin Works.)