Charlie Shrem Revives Bitcoin Faucets with New Website

Charlie Shrem, one of the pioneers of Bitcoin, is rolling back the years by launching a new website that offers cryptocurrency to users for completing CAPTCHA tasks.

On May 4, Shrem took to X, formerly Twitter, to announce his latest project - a website called 21million.com, which is a recreation of the first-ever Bitcoin “faucet” webpage created by cryptocurrency innovator, Gavin Andresen, in 2010.

Working on getting the bitcoin faucet going again at https://t.co/mHkgSR6H41

At the time of this publication, the site is yet to be fully functional - the page showcases a screenshot of a CAPTCHA task and a field to input a Bitcoin address, but no coins are available to claim yet. Like Andresen's original site, Shrem's page explains what Bitcoin is and how to get it.

When asked if he is working on the project alone or if he has any outside help, Shrem said that he is “vibe coding” it, adding that it is “very exciting.” The term “vibe coding” refers to the use of AI and prompting techniques to write code.

Asked if there was a “catch”, Shrem said that there wasn't any.

“I want Bitcoin to succeed, so I created this little service to give you some coins to get started,” he said.

Historical significance of Bitcoin faucets

Bitcoin faucets played a crucial role in spreading awareness of the cryptocurrency and fostering its adoption in the early 2010s.

Andresen's Bitcoin Faucet page dispensed 19,700 Bitcoins - valued today at approximately $1.85 billion - to users in exchange for solving CAPTCHA tasks. Users could earn up to 5 Bitcoins per day. Such faucets encouraged the creation of wallets and transactions, which helped expand the user base and network activity of Bitcoin.

Between 2011 and 2013, other similar sites emerged, such as FreeBitco.in. However, as the Bitcoin price and transaction fees rose, the rewards offered by these faucets decreased, rendering this model largely unviable.

The hard road of a crypto entrepreneur

Charlie Shrem co-founded one of the first Bitcoin exchanges, BitInstant, with Gareth Nelson in 2011. During its heyday, the exchange handled around 30 percent of all Bitcoin transactions, according to Shrem's personal page.

To offer the instant Bitcoin purchases that the first dominant exchange, Mt. Gox, lacked, BitInstant purchased Bitcoins from Mt. Gox in large batches and resold them to customers almost instantly.

However, BitInstant's business model faced scaling challenges as transaction volume grew. The company received $100,000 from early Bitcoin investor Roger Ver to support its expansion, and later secured additional funding from Erik Voorhees and the Winklevoss brothers, Cameron and Tyler.

In 2012, Shrem also co-founded the Bitcoin Foundation, where he served as vice chairman, promoting Bitcoin as an alternative to the traditional banking system.

Nevertheless, on January 26, 2014, Shrem was apprehended while attempting to disembark from a plane at New York City's JFK airport and was later indicted for money laundering in connection with his activities at BitInstant. Authorities claimed that some BitInstant customers used the purchased Bitcoins for illegal purposes, including criminal transactions on the dark net site Silk Road, founded by Ross Ulbricht.

Shrem eventually pleaded guilty to a reduced charge and was sentenced to a minimum of one year in prison before being released in 2016.

After his release from prison, Shrem returned to the crypto scene, founding the consulting firm CryptoIQ and Druid Ventures, a $13 million venture capital fund focused on cryptocurrencies. He also launched The Charlie Shrem Show podcast, which has produced more than 400 episodes featuring some of the industry's most notable figures.

In 2018, the Winklevoss brothers sued Shrem, alleging that he stole 5,000 Bitcoins from them in 2012. The court ruled to unfreeze Shrem's assets and ordered the brothers to pay his legal fees in November 2018. The case was later settled out of court in 2019.

The bottom line

The return of Bitcoin faucets could be an interesting experiment in the modern era, especially considering the significant increase in the cryptocurrency's value since 2010. Shrem's new project serves as a reminder of the early days of Bitcoin, when anyone could easily earn a few coins by completing a simple task.