Table of Contents
- TL;DR version:
- Part 1 – What are Bitcoin faucets?
- Part 2 – How I Got Started with my own Bitcoin faucet
- Part 3 – How to Build Your Own Bitcoin Faucet
- Part 4 – How to make money from your faucet
- How to get more traffic to your faucet
- Protecting your faucet from spammers
- 3 faucets you can learn from
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:
- What are Bitcoin faucets
- My own faucet case study – Milli.io
- How to build a Bitcoin faucet
- How to make money from your Bitcoin faucet
- How to get traffic to your Bitcoin faucet
- How to protect your faucet from spammers and bots
- 3 faucets to follow
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:
- They are trying to teach people about Bitcoin.
- 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.
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:
- 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.
- The larger the time interval the higher the “Time on Site” metrics in Google Analytics will be.
- Bots will destroy your profitability and you have to learn how to protect yourself from them.
- 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.
Step 3 – Download the Bitcoin faucet WordPress plugin
- Download the Bitcoin Faucet WordPress Plugin – Download link
- Go to “plugins” -> Add new -> Upload plugin
- Choose the file you’ve just downloaded and upload it to your site
- After the upload is compete click on “activate plugin”
Refer to this page if you encounter any issues or need support.
Step 4 –Get a Faucethub and SolveMedia account
In order to make payments with your faucet you’ll need a microwallet payment processor service such as Faucethub.
- Go to Faucethub and create an account
- Add your site’s URL to the account
Additionally in order to protect your faucet from bot abuse you’ll need to get Catpcha API keys.
- Go to SolveMedia and create an account
- Add your site’s URL to the account
Step 5 – Set up the plugin
This faucet has A LOT of options. Since I don’t have time to write them all down I created a video explaining everything you need to know about the faucet.
Under the “general” tab
- Enter your payouts and timer settings
- Enter your SolveMedia API keys
- Enter the URLs for your faucet page and “check address” page
- The referral link URL scheme is this: http://yourwebsite.com/?r=btc_address
Under the “payment” tab
- Enter your Fuacethub API keys
On your faucet page:
- Enter the faucet shortcode
I HIGHLY RECOMMEND WATCHING THE VIDEO FROM START TO FINISH TO UNDERSTAND HOW THE FAUCET WORKS (ALL CAPS, SO YOU’LL KNOW IT’S IMPORTANT).
Step 6 – Funding your faucet
Before you can activate your faucet, you’ll need to fund it so you can send out the rewards to people. This is done through the microwallet dashboard. At the moment this plugin works only with Bitcoin so make sure to fund your Bitcoin balance.
This Bitcoin WordPress faucet plugin is pretty new and advanced. I’m always improving it and am really open to hearing what you think. If you need any support or have suggestions for improvement please see the original plugin page on our site.
Part 4 – How to make money from your faucet
Now for the fun part, how to actually make money from your faucet. At the moment I’m only using one out of various methods I will list below. In the future I plan to expand my ways of monetization (making money) but I want to take it one step at a time (remember? lean methodology).
Using ads on your website
By far the most popular way for monetizing your faucet is through ads. If you’re new to online advertising I suggest heading over to Google Adsense and signing up as a publisher. They have great tutorials to get you on your way.
IMPORTANT: Google is no longer allowing Adsense to be placed on Bitcoin faucets. If you do this your account will get banned. Here’s a recent post for Adsense alternatives that will help you monetize your faucet.
If you’re looking for more options aside from Google Adsense then I’ve seen many faucets use CoinAd. However it seems that you’ll need to gain some serious traction before you’ll be able to sign up with them. At the moment CoinAd states on their homepage that they accept only websites with an Alexa ranking of under 100,000 or more than 10K pageviews daily.
Another option for generating money through advertising is Anonymous Ads. Unlike CoinAd they do not have a screening process and will accept practically anyone as a publisher.
When putting your ad placements on the page it’s best to make sure that they are as visible as possible. This means you should use large ad formats and place them next to where to visitor will probably be looking (e.g. the “Claim Reward” button). Since at the moment I’m only using Adsense I am limited to 3 placements maximum. I used 2 wide skyscrapers (300px width x 600px height) and one medium banner (468px width x 60px height), this seems to be the standard for most faucets I’ve visited.
Using affiliate/referral links
Another way you can monetize your faucet is through affiliate/referral links. One example for this is to place a link saying, “Don’t have a Bitcoin wallet?” under the text box where the user needs to enter his Bitcoin address. This link can be your referral link to Coinbase and you will receive a referral commission if an eligible user signs up and later on buy Bitcoins from Coinbase. However Coinbase is pretty crappy in their payment ethics, so keep that in mind. Here’s a detailed list of available affiliate offers you can choose from and perhaps integrate into your faucet.
Build a faucet rotator and earn referrals
Some faucets will also refer their users to other faucets in order to receive a referral commission from them. One way of going about this is by building a faucet rotator. Since I already explained what a rotator is in the beginning of this post I won’t go over it again.
How to get more traffic to your faucet
It would be impossible to generate a substantial amount of revenue from your faucet without a reasonable amount of traffic. Getting cheap converting traffic for your faucet will probably be the hardest task you’ll need to accomplish but here are a few pointers to help you get started:
- Approach popular faucet rotators in order to get your faucet listed on them. Some examples are iFaucet and Makejar.com. These sites have unbelievable amounts of traffic and if you manage to get your faucet on the top of their list you’re golden. If you’re using a Faucethub faucet then you should be showing up on Faucethub’s list as well.
- Create a thread on BitcoinTalk promoting your faucet. The relevant board to post this on will be Micro Earning. Here’s an example thread. The main idea is for you to have a place where you can post updates about your faucet or even have “flash hours” where you give away higher rewards and get more traffic.
- Add social buttons to your faucet allowing people to share it with their own reflink (short for referral link).
- You can always try to find faucets that have closed down and ask to buy them. This way you can redirect the traffic that’s hitting their website to your faucet. However this method will only work for a limited time so keep that in mind. Once people understand that the original faucet is no longer active you will probably see a drop in traffic (just like what happened to me with Milli).
- By far the best way to get more traffic to your faucet is by giving away higher referral payments, however this will also boost your expenses. You can always offer a high, one-time payment for one of the popular faucets or rotators in exchange for sending you some more traffic.
Protecting your faucet from spammers
When you own a faucet, you’re waging a constant battle again spammers, bots and hackers that will try to steal your faucet’s Bitcoins. Usually spammers will use a VPN or a proxy in order to change their IP and allow themselves to reclaim coins from your faucet without having to wait for the timer to relapse. Bots can also be used in order to visit your site, claim the coins automatically and leave you with no profit, as bots do not click on ads. Last but not least, hackers may try to hack your faucet and steal the coins inside it.
Fortunately, the good people of the Bitcoin community have come up with different solutions on how to slow down these malicious attacks (it’s impossible to remove them completely). The following methods were composed from various BitcoinTalk threads (sources listed at the end of this section) and are ever-evolving. After I’ve implemented these methods I’ve noticed my payouts have stabilized, and I got my cashflow under control.
Don’t deposit more than you can afford to lose
It may sound obvious but it has to be said. Don’t deposit large amounts of Bitcoins into your faucet. This way if someone does hack into your faucet or manages to claim more Bitcoins than they deserve, at some point the faucet will run dry and he will leave. I try to deposit a week’s supply of Bitcoin into my faucet and check the balance every Sunday. It doesn’t add up to much (around 0.1BTC) and if I somehow lose this amount, I can cope with it.
Blocking malicious users and IP addresses
The Bitcoin Faucet WordPress plugin has many features to help you protect yourself from bots and scammers:
- Make sure to set a 24 hour limit for claim per IP / Bitcoin address. This way even if someone manages to abuse the faucet they will be limited in the amount of claims.
- It’s worthwhile to add the “user registration” option inside the faucet. This means that only registered users will be able to claim through the faucet. It means that people will need to validate their email address and also their user can be tracked and blocked more easily. The downside is that it creates greater barriers to entry.
- Check the “statistics” tab to see who are the highest claiming addresses and IP addresses and decide if you think they should be banned in case they seem like bots.
Of course there are always additional security measures you can add to your faucets. For example, you can ask your users to answer a simple math equation in order to filter out even more bots. Also you can blacklist known scammer Bitcoin and IP addresses in your faucet’s dashboard. This thread on BitcoinTalk lists and updates all known bad addresses.
3 faucets you can learn from
Before we wrap up the longest post ever written on this blog, I just want to point your attention to a few faucets that are already making it big. It might be worth your while to study them and get inspired by the techniques they are using in order to make money from their faucets.
Bitcoin Aliens, Bitcoin Zebra and Moon Bitcoin are all leading faucets receiving millions of page-views each month. Also I will continue to update on my progress with my own faucet as I optimize and improve my earning and traffic stats.
I hope you enjoyed this guide and that it helps you in setting up your very own Bitcoin faucet. If you have any questions, comments or want to add more resources to what was written here feel free to do so in the comment section below.
January 2017 update – Today 99Bitcoins’ faucet is one of the highest paying faucets around. The following posts show its “evolution” from Milli until it was integrated into 99Bitcoins. Some of the info in these posts is outdated but the general lessons learned are important for every faucet owner.