Introduction to a Faucet Economy

Werner Boehm
Jul 21, 2017 · 3 min read

I think the term “faucet” was coined by Gavin Andresen back in 2010 when he launched a Bitcoin faucet, maybe with the idea to incentivize people to use Bitcoins. Cryptocurrency faucets are blockchain-enabled reward systems, in the form of a website or app. Named after real faucets, cryptocurrency faucets dispense small amounts (instead of water) in exchange for simple tasks a user has to accomplish. Faucets were a phenomenon of the early Bitcoin & Blockchain days.

Faucets deploy a simple advertising based business model: users generate traffic that is monetized consequently via different ad formats. Users, in turn, are instantly rewarded for their tasks with cryptocurrencies which are credited to their wallets, i.e. the faucet’s advertising revenue is shared with the users.

We have been very early adopters of this striking business model and generated impressive cash flows from Google AdSense and the like. Some of our faucet sites with fancy names like “PinkTussy” or “JokerTimes” received more than a million Unique Users p.m. (Google Analytics) from all over the world. Especially people from emerging countries loved our faucets and, given the lower purchasing power of their local FIAT currency, to them the small faucet rewards had real value. We had great discussions with many of our users back then and thus our faucets’ social media channels attracted thousands of friends.

Google Analytics data for one of our Faucet Sites (Nov 2015)

Unfortunately, Google AdSense black-listed faucet sites early 2016 and the business model became significantly less attractive. And Google hasn’t been wrong about that because of the “bots tsunami” we experienced early 2016 and those tiny digital monsters harvested a large part of the faucets instead of humans.

Moreover, many cryptocurrency evangelists thought (and think) of faucets as a kind of cheap business. Let me tell you guys this — it definitely is not! Faucet sites greatly supported the idea of mass adoption of Bitcoin and Cryptocurrencies. Faucets, too, have been the raison d’etre for many great projects and experiments around micro- and nano-payments like FaucetBOX or SatoshiPay. Unfortunately, some of them meanwhile shut down because of the changes in the business environment.

That said, I am convinced that the basic faucet idea — instant micro-payments for small contributions — has a huge potential and shows what peer-to-peer blockchain concepts and seamless cryptocurrency payments can achieve for the greater good of people and societies. Just think of bloggers or people writing reviews or doing ratings. Google wants you to do reviews and ratings all the time for free, i.e. Google creates monetizable value with users free contributions. Or think of testing new products, provide opinions to brands and organizations, participate in surveys. You can call it “Paid-to-Click” or “Paid-to-View”, I call it Faucet Economy. And, yes, there has to be done a lot technology-wise to avoid fraudulent clicks or bots but applied AI should enable this “Enhanced Faucet Model”.

Book Recommendation

To us, the concept of a Faucet Economy means to let people all over the world participate in the monetizing of the value they create (or possibly could create) with their contributions. The vision behind this concept is to remove access barriers to a digital labor (value creation) market, provide equal chances to people regardless of their place of living, gender or ethics. The Faucet Economy could be a merit-based earning environment with a more equitable distribution of income. Our Faucet Economy vision is also based on Jaron Lanier’s critics and ideas on the free economy. I can highly recommend his book “Who Owns the Future” to learn more on the subject.

A great example of applied Faucet Economy vision is the idea of the Peerism project with the goal to create “a better economy for everyone”. A few months ago we resurrected our faucet idea and started to work on our Faucet Economy vision. Stay tuned to learn more.

TalkingCoins

The place to write, read and discuss about peer-to-peer spirit and the faucet economy

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Werner Boehm

Written by

I am a digital nomad, business developer, writer and speaker. I write and speak in English and German and would love to hear your comments.

TalkingCoins

The place to write, read and discuss about peer-to-peer spirit and the faucet economy

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