Dogecoin faucets prove there is such thing as free money
When someone offers you free money with no strings attached, your first inclination should probably be to run the other way as fast as possible. Even that helpful Nigerian prince who has been flooding your inbox with promises of unimaginable wealth is only offering to give you a piece of his sizable inheritance in exchange for your bank account info and Social Security number.
However, when it comes to virtual currencies like Dogecoin, that truism doesn’t necessarily hold. The communities of enthusiastic boosters that have sprung up around cryptocurrencies have devised a creative way to bolster the userbase: Give free coins to anyone who wants them.
On sites called "faucets," new users get hooked up with their first few coins in a way that’s simple, instantaneous, and hopefully, addictive.
The dozens of faucets, which specialize in a variety of cryptocurrencies, all work along similar lines. A user enters the address of his or her virtual wallet, solves a CAPTCHA, and then receives some virtual money. In the early days of the currency, some faucets were known to give out up to 50 dogecoins at a time. But now most only hand out one or two. (A list of Dogecoin faucets can be found here.)
Pretty much every faucet site sets a time limit on withdrawals, meaning users can only extract money from a faucet once per day or, at least, once every few hours. Unless, that is, someone uses more than one wallet address. Making new wallets is completely free, and they can be generated in the blink of an eye.
Hugo Vacher, who runs a Dogecoin faucet called (appropriately enough) Dogefaucet.com, says that in the two months his site has been in existence, it has given out around 364,000 dogecoins.
‟We set up a Dogecoin faucet so that the new shibes [the slang term for Dogecoin users], as well as veteran shibes, can get a little love from our doge overlords,” wrote r/dogefaucet moderator u/Dalek1234. ‟Seeing as Dogecoin has no real purpose other than tipping people at this point, we might as well give people some so they can show their appreciation to well thought out comments.”
In an effort to see if these things actually work, I spent about an hour signing up for Dogecoin faucets and posting in the r/dogefaucet subreddit:
At the end of my experiment, I ended up with just over 17 dogecoins—a massive haul valued at approximately two cents. Clearly, faucets aren’t going to make anybody rich. I probably would have made more money walking around my neighborhood with my head down and looking for pennies people accidentally dropped on the ground. But it was a quick and easy way to get my hands on some dogecoins.
On the Bitcoin side of things, there are faucets too, but many of them seem more interested in getting human beings to perform menial tasks in exchange for a payout of a small number of bitcoins—or, at least, staring a page filled with ads. One site, called BitcoinGet, doles out small portions of bitcoins to visitors who do things like watch videos and conduct Google searches for specific topics.
Virtually all Bitcoin faucet sites require users to hold their coins in an external account, which will only pays out if it contains a large enough amount of Bitcoin. This is a cost-cutting measure. People conducting Bitcoin transactions typically affix small processing fees onto their transactions to encourage miners to process their transactions in a timely manner. Bundling the fractional bitcoins that drip from faucet sites prevents them from losing money on each transaction, or having their requests ignored completely.
As Mac Observer notes, the smallest transaction likely to be confirmed through the Bitcoin network is 0.0000543 BTC, which is why faucets set their floor for cashing out at slightly above that threshold. MicroWallet.org, a site used by many Bitcoin faucets to pool users’ winnings, sets its limit at 0.000058 BTC. At the current BTC to USD exchange rate, this is equal to about three cents.
After spending about an hour plowing through Bitcoin faucets, entering CAPTCHAs as if my life depended on it, I didn’t even come close to earning enough Bitcoin to make a withdrawal. In essence, the higher threshold for making actual withdrawals from Bitcoin faucets made it so I didn’t end up with anything in my wallet.
While the general format of the faucets are more or less the same, there appears to be something a bit more mercenary about the Bitcoin sites than the Dogecoin ones. Many of the Dogecoin faucets have shut down in want of donations, whereas nearly all of the Bitcoin faucets I visited boasted they were flush with cash—only a couple declined my request due to insufficient funds.
The reason for this disparity is that the Dogecoin sites tend to operate based on donations from individuals and organizations interested in increasing Dogecoin adoption, whereas most Bitcoin faucets are seemingly run as moneymaking enterprises.
‟Maintaining a Dogecoin faucet balance has became much harder lately, I personally see two reasons to that,” explained Vacher. ‟First, some people think that faucets are only needed at the early beginning of a cryptocurrency's life to help it grow, and... [have lost] interest in contributing. Second, Dogecoin’s value has increased suddenly... and this [has] made some people realize what they had was money and not just some fun number.”
Vacher said that Dogefaucet has had trouble keeping its coffers full in recent weeks. He's added advertisements to the site and is using the revenue they generate to buy Dogecoins for the faucet.
Another moderator of the r/dogemining subreddit, u/ifunnysjank, said that a lack of donations has become a problem throughout much of the Dogecoin faucet ecosystem—though Reddit’s own Dogecoin faucet has been lucky enough to escape the trend.
‟I’ve seen a lot of faucets dry up mainly because of a lack of donations,” u/ifunnysjank explained. ‟However... we have seen an increase in donations as the currency has grown. I credit our success in staying afloat to the generosity of Redditors.”
Now that I have my 17 dogecoins and zero bitcoins, the question remains: What should I do with them? Considering this is a virtual currency whose community prides itself on its abundant generosity, the answer was actually pretty obvious. I donated everything right back to Dogefaucet.
Illustration by Jason Reed