The Origins of Cryptocurrency Faucets

The first crypto faucet was created in 2010 for Bitcoin, the world’s first cryptocurrency. Bitcoin developer Gavin Andresen created a crypto faucet website where people could solve a simple captcha to earn 5 Bitcoins per day. Yes, that’s a whole 5 Bitcoins, not Satoshis. Of course, that year Bitcoin was only worth 20 to 30 cents. Yes, if you collected Bitcoins from Andresen’s website back then and held on to them for a few years, you could be pretty rich, but we don’t have time machines (yet).

Andresen wanted to promote Bitcoin and increase its adoption — he created the website because he wanted “the Bitcoin project to be a success,” he wrote in a post on the Bitcoin forum. Andresen believed that Bitcoin adoption would increase if people could get “a handful of coins to try it out.” Remember, at the time, the best way to get Bitcoins was to mine them, which required a lot of computing power. Also, buying Bitcoins wasn’t easy because neither centralized nor decentralized cryptocurrency exchanges existed. Andresen initially funded the faucet rewards with his own holdings, and later got some help from the community.

Bitcoin’s popularity grew so quickly (perhaps faster than he expected) that Andresen had to shut down the site in 2012. As the price of the cryptocurrency had risen to nearly $30 by mid-2011, it became unsustainable to continue handing out Bitcoins.

Many other crypto faucets followed Andresen’s lead, but as the price of cryptocurrencies rose, these faucets faced the same sustainability issues. As a result, crypto faucets began working with ad networks and using part of the revenue to provide rewards to users.