Bitcoin faucets are websites that reward users free bitcoin in exchange for completing a simple task (usually answering a captcha).
The first bitcoin faucet was developed by Gavin Andresen in 2010.
Typically, bitcoin faucets have three main purposes though many serve a combination of all three.
The fist purpose is to educate new bitcoin users. Much of the bitcoin economy relies on introducing new users to the usefulness of bitcoin. Faucets provide budding bitcoin enthusiasts with a small supply of coins for free.
Faucets can also be used as traffic driving machines. By giving away free money, many faucet owners hope to draw attention to the different content their site has to offer.
The last common purpose of bitcoin faucets is to make money. Many faucet owners use advertising revenue to stay afloat. By serving ads to users in exchange for satoshi, some operators are able to manage a small profit.