NOTE: This article is for information purposes only. CoinPot and all its associated Bitcoin faucets have now closed down.
These are question that crop up regularly in internet forums, comment sections and Q&A sites across the web so clearly there’s some confusion surrounding the validity of faucets.
After all, where else can you literally get free money handed to you in the comfort of your own home for very little effort? It just seems too good to be true and perhaps people are rightly suspicious.
The reason faucets exist is all down to simple economics. The faucet owner wants to make money from advertising so he incentivises visitors to keep on visiting by handing out tiny fractions of bitcoin (known as Satoshis) each time you visit the site.
The hope is that you’ll keep on returning to grab your Satoshis and thus help boost the faucet’s revenue and profit with your traffic. If enough people keep returning the owner will be in the money, although it’s not quite as easy as it used to be to profit from faucets.
It used to be that faucet owners could make a healthy return based on Google Adsense ads alone, but that was brought to an end when Google banned faucet websites from the programme on the grounds that they were enticing people to visit with free coins and this was against its terms of service.
Almost immediately faucet owners saw their revenues slashed, but not to the point where it is impossible to make a profit from running a faucet. In fact, the sheer number of faucets that remain active proves that there’s still money to be made.
So, as you can see, there’s no reason to be nervous about faucets, even if at first they do seem too good to be true. It’s a unique arrangement between customer and business but it’s one that serves both parties quite well.
Aside from the unscrupulous owners who don’t pay up after you’ve claimed, which are pretty few and far between from my experience, the only other thing you need to be wary of is the advertising that faucets sometimes carry (usually served up by a network and hence beyond the control of the faucet owner).
A lot of it is questionable to say the least, not in a NSFW way (although very occasionally this is an issue), but in terms of the legitimacy of the companies advertising.
The worst offenders are ads claiming to be able to multiply your coins by huge amounts virtually overnight. Promises of 12% daily returns abound, but just stop and think about this for a second.
How are these companies going to achieve this level of return? Even the best legitimate investment managers in the world would struggle to get a percentage even remotely close to this.
Clearly then, it’s unlikely that these companies which pop in and out of existence with their poorly written websites and spurious UK company addresses that have been bought over the internet, have found a magic formula that no-one else has thought of.
At best they are pyramid schemes where the first movers will profit at the expense of the late-comers. At worst they are simply scams designed to steal your coins and disappear into the ether.
We can’t categorically say that all of these sites are scams, but the it’s clear that the returns offered by the vast majority of them are simply not realistic and hence are unlikely to be legitimate.
But don’t let this put you off faucets – just avoid the ads and stick to claiming and you’ll be fine. The worst you’ll have to deal with is an unwanted pop-up or two but remember, you are getting free money and this is the price you’ll have to pay to grab your coins.
Most faucets are designed so that complete newbies can use them as obviously the owners do not want to put up any barriers to entry so this is another reason to dive in and begin your cryptocurrency journey.
If you need advice on getting started read our beginner’s guide to bitcoin faucets and then head over to our faucet list page to find some of the best-paying and most reliable faucets around.