Crypto for Good
Have you ever thought about the potential of cryptocurrency acceptance by charities or non-profit organisations? Finding a way to fund the mission is extremely hard work, and different charities face numerous fundraising restrictions associated with their activity, recipients, geographic location and local administrative issues.
All over the world the efficiency of fundraising campaigns is determined by the fast and safe transfer of funds and access to international funding. The potential of global donations in cryptocurrencies is almost unlimited because the acceptance of digital assets would eliminate such precautions as high bank fees, currency exchange rates, long transaction periods, vast amounts of documentation and other factors that may significantly discourage international donors.
Blockchain technology has a number of advantages in comparison with the traditional bank transfer, such as transparency, cost minimisation, fast execution, discretion and global implementation amongst others.
Distributed ledger is public and all the payments can be overseen by all participants. This eliminates the need for third parties to take part in the financial system, based on trust between its users. The independence from the monitoring third parties helps to reduce the transaction cost because banks charge users for validating all fiat money transfers. Blockchain keeps the virtual information about every transaction, including details about each asset type, amount of sent currency, ownership status and time of operation, creating a transparent and anonymous payment mechanism.
Cryptocurrency donations are an ideal mechanism for the donors willing to remain anonymous for various reasons. Bitcoin digital wallets are pseudonymous, in sense that wallet addresses are not always verified by personal IDs and are not necessarily associated to a banking account. There are lots of services that allow the creation of anonymous cryptocurrency wallets indented to keep the identity of the user unknow, while disclosing information regarding transaction records.
Depending on the cryptocurrency type, transactions take minutes or even seconds to be processed. High transaction speed matters in funding missions of non-profit organisations working on disaster relief for instance. Cryptocurrency recognises no central authorities and boundaries, which means that charities get access to donors from all over the world by accepting cryptocurrencies donations.
Two billion people all over the world don’t have access to a banking system, but use smartphones. Making way for cryptocurrencies would make it possible to make direct money transfers to those in need instantly. The recipient can cash out crypto with the local currency, pay for goods and services online or exchange it to other currencies. In December 2018, for example, the leading cryptocurrency exchange, Coinbase had donated $10,000 in ZCash (ZEC) to Venezuelans through the GiveCrypto.org humanitarian project.
At the very beginning of crypto adoption era, private funds and charities started to accept digital currencies. One of the biggest donations in crypto was the Pineapple Fund, a philanthropic project started by an anonymous individual in December 2017. The donor used the nickname “Pine” and claimed to be one of the biggest crypto holders in the world. Whoever Pine is, he or she gave away 5,057 bitcoins equivalent to $86 million worth at that time to 60 non-profit organisations, big and small, including million-dollar donations to the Water Project and the Electronic Frontier Foundation, the Institute for Justice and Hope Open Medicine Foundation. All these donations can be verified thanks to Bitcoin’s digital ledger system where they have been recorded.
Large international non-profits also recognised the potential of cryptocurrency donations. As for Reference, Wikipedia became one of the first organisations to accept Bitcoin donations. UNICEF New Zealand can also now accept donations made in Bitcoin, Bitcoin Cash, Ethereum and Litecoin. The organisation needs funds for helping children in Syria, South Sudan, Kashmir and Pakistan to continue their education, delivering emergency supplies to the Pacific region and developing a safer environment for vulnerable children around the world.
Article by the Marketing Department from E&S Group
The article has been published on the Malta Independent on Sunday, 19 May 2019