What are Faucets?

Bitcoin faucets are websites that give out absolutely FREE coins in exchange for doing simple tasks.

 

 They usually pay out very little amounts that typically fluctuate according to the value of bitcoin. Most popular payout per transaction is less than 500 satoshi, albeit many faucets have random rewards as well. Normally faucet saves up these small individual payments in its own ledger, and they add up to make a larger payment that is sent to your bitcoin address. This is to reduce mining fees. Some faucets use immediate off-blockchain transactions, which has no fees at all.

In addition to these, there are also many Bitcoin faucet rotators that can 'rotate' through a large list of faucets by clicking a button on a single websites, meaning more sites can be visited than entering the URL of site after site. The website earns money through a referral system for each website visited. Faucet rotators can also prioritize faucets by their level of average payout and will only visit sites if the time limit in between payouts has been reached.

Most importantly, it is typical for faucets to have a referral system, where existing users referring new ones are rewarded with a pro rata portion of new users' earnings from the faucet. Unlike illegal pyramid schemes, earnings here do not percolate to the top in the chain of referrals.