Last updated on October 13th, 2017 at 06:23 pm

TL;DR version:

Bitcoin faucets are a type of website that give away small amounts of Bitcoins to their users. Faucet owners make money by placing ads on this highly engaging websites. You can build a faucet within 10 minutes by getting a Bluehost account and installing a Bitcoin faucet WordPress plugin. Oh and I’m also going to teach you how to get traffic and protect your faucet from scammers…..Sounds interesting? Here’s the full post:

Brace yourself; this is a long post :) The good news is that it’s super informative as well. This post will teach you EVERYTHING you need to know about Bitcoin faucets. If you want to quickly browse through this post, here’s what we’re going to go over:

This post was originally written on November 2015 BUT I’ve been updating it constantly to stay relevant. The main things that changes since then is that you can’t use Adsense ads on Bitcoin faucets and the price of Bitcoin has increased dramatically making it much harder to generate a profit. Whenever there are relevant updates I have added them throughout the post.

Before I begin I just want to say that my experience of running a Bitcoin faucet isn’t vast. I’ve started 99BItcoins’ faucet a little over a month ago, but I’ve learned a lot since. And now I would like to pass on this information to you.

Part 1 – What are Bitcoin faucets?

We’ve covered Bitcoin faucets many times in the past so I won’t go over them in detail. In short, a Bitcoin faucet is a website that gives out a small amount of Bitcoins to its visitors. The amount can vary anywhere from 100 Satoshis (0.000001BTC) up to 10,000 Satoshis and more (0.0001BTC).

Usually after you receive your coins you need to wait a certain amount of time until you can ask for another batch. The original Bitcoin faucet was operated by Gavin Andresen, The Bitcoin Foundation’s chief scientist. It started out around late 2010 and it gave visitors five Bitcoins for free. Back then, each Bitcoin was worth something like $0.08. The whole idea was to spread the word about the world’s first cryptocurrency.

How People Make Money from Bitcoin faucets

You may be asking yourself why people give away free Bitcoins. Well, there can be 2 answers for that:

  1. They are trying to teach people about Bitcoin.
  2. They are somehow making money from it.

Of course you can probably guess that #2 is the main reason people set up faucets. Just so you’ll get an idea of how big the faucet industry is, almost 50% of the leading Bitcoin websites today in terms of traffic are faucets.

But the question remains: How can you make money from these faucets? Well, most of these websites have an overwhelming amount of ads placed all around them. Some deceitful faucets even place their ads in places which will get you to accidentally click the ad instead of the “claim bitcoins” button.

So the business model of these faucets is bringing cheap traffic in and getting them to click on ads. But where do they get their “cheap” traffic from?

From a referral system.

Faucets will let you earn a percentage of the Bitcoins they give away to visitors you brought in. This method is so successful that it’s the main traffic source for most faucets and it also created a new type of website – The Bitcoin faucet rotator.

A rotator site is a site that allows you to quickly surf through different faucets without opening a new site or tab each time. The links to each faucet inside the rotator are referral links and the rotator owner earns a commission from each faucet you visit through it as well.

At this point you may be thinking, “Hey I can make lots of money by visiting faucets!” Well I’m sorry to burst your bubble but trying to get rich out of visiting faucets isn’t a realistic option. You’d probably just be wasting your time going from website to website ending up with no more than a few bucks after hours of work.

Even if you sit at your computer 24 hours a day, claim a new batch of coins every 30 seconds and manage to find only faucets that are paying 10,000 Satoshis (which practically don’t exist), you would still only be making 0.0024 Bitcoins a day. At today’s exchange rate, that amounts to 70 cents.

Another thought that may pass your mind is, “So maybe I can make a lot of money by creating a faucet!” Well, this may be true, but you’re going to need A LOT of traffic in order to generate substantial revenue. However this is exactly what this post is about.

So keep on reading and let’s see exactly how much I’m making with my own faucet at the moment.

Part 2 – How I Got Started with my own Bitcoin faucet

Around a month ago I noticed an ad on Flippa that listed a Bitcoin faucet called “BitcoinGenie” for sale. At the time the site had a huge amount of traffic (around 240K users each month) and was making (according to its owner) $850/month. Here’s an overview of the site’s traffic between Sep. 1 – Sep. 30, 2015:

As you can see, the site was doing pretty well. I decided to jump on the opportunity and bought the website. However I wanted to use a different name for my faucet, something shorter and more catchy. I ended up going with Milli and redirected all of the traffic from Bitcoin Genie to miili.io (on November 2016 I embedded Milli into 99Bitcoins as the official faucet for the site).

Ever since then I’ve been testing out different payment models and ads in order to try and maximize my profits through this faucet. In this post I’m going to reveal to you my exact stats from Milli and I will also keep updating the blog from time to time once I get any additional insights.

Milli – First Month’s Profit and Loss Report

I’m a big believer in what is known as lean methodology. For those of you who are unfamiliar with this term, it basically means don’t invest any effort in something that hasn’t proven itself to work. To give you an example, when I started out with Milli, I could have created a very well designed website and my own custom faucet software. But that would be a waste of time since I’m not sure if this whole faucet scenario is even going to work.

Instead I decided to go lean. Create a low budget website through FaucetBox (no longer active today) which looks pretty crappy. If I see that I can monetize off that site, then I’ll give it a face-lift later on.

FYI – FaucetBox was at the time the largest “out of the box” solution for Bitcoin faucets and they charge you 2.5% from your deposit for managing payments to your users. Even though I considered this fee to be pretty high, it was worth paying in accordance with my lean methodology principles. Later on I created my own personalized faucet.

As a start, I placed 3 Adsense blocks on my faucet. Adsense is Google’s advertising system for website owners. You just place a line of code on your site telling Google, “This space is yours to advertise on, just give me a share of the profits.” The reason I put only 3 ad slots on the site is because Google limits you to this number, although you can add additional ads that are not by Google. I’ll cover additional monetizing methods later on in this post.

Here are my traffic stats of my faucet for the first half of November 2015:

As you can see, this is considerably lower than what BitcoinGenie had but it’s still a good start. There are a lot of page-views, the time on site is decent and the bounce rate is low.

Here’s a screenshot from FaucetBox of how much money I’ve spent on Milli throughout this time frame:

If you calculate on the payments made from November 1st up to November 15th you get 0.65334251BTC. Keep in mind that I also pay a 2.5% fee to FaucetBox so it means my expenses were around 0.67BTC. At today’s exchange rate, this equals about $220. The spike you are seeing around November 5th2015 is when Bitcoin boomed to $500. Additionally, I’ve been running some different tests throughout this time frame.

Now for the revenue. Here are my earnings with Adsense alone on this exact same timeframe:

So at the moment I’m basically breaking even with a revenue of $223. Of course this result would change if Bitcoin’s price would increase (and then I’d be at a loss) or decrease (which would put me at a profit). As of January 2017 it’s really getting hard keeping the faucet profitable with the rising price of Bitcoin.

By now some of you may be saying, “What’s all the fuss about? You’re just breaking even, it’s not worth all of the hassle.” I beg to differ. You see, this is what lean methodology is all about. I used minimum effort to get to a point where I’m breaking even. Now I can take the time to optimize my faucet in order to create a profit.

I have proven my assumption that I can generate a revenue stream with a Bitcoin faucet using minimal effort. Also, even if I was just breaking even I’m still “converting” my Bitcoins to Fiat money at a 0% commission (assuming this is something you want to do).

In the short amount of time I’ve been running the faucet have come to the following conclusions:

  1. It’s better to pay small amounts of money at shorter intervals than large amounts of money in longer intervals. This is due to the fact that some people will apply bots to claim their Bitcoins multiple times and override the site’s timer. If your payout is larger this will put you at a loss.
  2. The larger the time interval the higher the “Time on Site” metrics in Google Analytics will be.
  3. Bots will destroy your profitability and you have to learn how to protect yourself from them.
  4. I haven’t completely managed to prove this point yet, but I think It’s better to pay out smaller amounts and give a higher referral reward. This will get more people referring visitors to your faucet than a higher payout for the visitor and a smaller referral reward.

These are all just initial assumptions which I’ve tested in the past 3 weeks but I’ll continue to test them as time goes by. After all tests were concluded I decided to go with a payout of  300-1000 Satoshis every 45 minutes. I’ve set the odds so that on average people will receive 300-500 Satoshis. This allowed me to put a super high referral commission of 65%.

Update: Today (January 2017) I pay an average of 100 Satoshis per 5 minutes in order to keep faucet at a break even point.

Part 3 – How to Build Your Own Bitcoin Faucet

So now it’s time to create your own Bitcoin faucet!

If this sounds scary, I assure you that this guide will make it very simple. I have almost no coding experience myself, yet I’ve managed to set up a faucet. The whole process should take 20 minutes and no more than $4 (if you use Bluehost).

Step 1 – Get a domain name

In order for your faucet to be available online, you will need to register a domain name and place the faucet files on a server. You can get your domain name from namecheap (they also accept Bitcoin).

For hosting I recommend using Bluehost, as they have very cheap plans ($4/month) and they will also give you a free domain name when you register. This way you kill two birds with one stone. Keep in mind that not every hosting will be compatible with the plugin.

The links to Bluehost in this post are affiliate links but feel free to just sign up directly with them if you’d like.

Step 2 – Get a hosting provider and install WordPress on it

This is the very basics of what you’ll need. I’m assuming you already know how to do this, if you don’t then I’m posting a video here that explains how to set up WordPress. Most paid hosting providers should give you this option with one click, I personally use Bluehost for these types of project.