As new developments in the field of cryptocurrency continue to disrupt and decentralize the finance industry, one area that is also witnessing some major improvements is charity. Let’s face it, most of us have not actively gone out of our way to donate our cryptocurrency to charitable organizations or funds, but have instead probably held on to our assets with the hopes of gaining large returns through appreciation in value. Well, it just so happens that cryptocurrency has also made donating to charities that much easier, so maybe the next time you walk away from an investments with extra coins in your wallet, you’’ consider this new possibility.

This is not financial investment advice.

This article will touch upon key aspects of donating to charity using cryptocurrency.

In this article

Opportunities & Challenges

Recent models of cryptocurrencies and blockchain technology provide a compelling argument for a brand new way of charitable giving. However, just like any other new project or proposal, there are always some associated potential opportunities and challenges which we could face. Let’s discuss these associated opportunities and risks involved in charitable giving through cryptocurrencies.

One of the most obvious yet powerful ways in which cryptocurrencies can innovate how donations are made through digital assets is by introducing a new source of wealth within philanthropic projects. If most projects only accept donations in conventional forms, then they’ll be losing out on a whole population of people with unexpected wealth due to the volatility of cryptocurrency. In fact, there might even be an entire community of untapped potential for crypto-donations to be made by these philanthropists.

Another source of donation could come from miners who decide to mine for charity, directly giving their proceeds to charitable organizations before they can even get the digital assets. This way, transactions that would otherwise be monetized for profit are put to use in raising money for their cause through digital assets. Additionally, any donor who might want to confirm that his donation is being used correctly can do so thanks to the transparency involved when donating through the blockchain network. If you know what your donations are going towards and — more importantly — that they aren’t being misused, wouldn’t you be encouraged to give more back? Especially if you are an international philanthropist, who may want to donate to a charity across the world, the increased transparency of donating through cryptocurrencies gives one the ability to verify in full validity that their charitable giving is indeed making a difference.

Of course, this would all be wonderful if there weren’t any speed bumps along the way, posing some challenges when trying to make a difference. First and foremost we have to deal with the fact that there just isn’t enough people involved in the mainstream cryptocurrency industry yet, that would warrant a mass adoption of charitable giving through digital assets. This might hinder the momentum that crypto in charity has gained over the years, but until it becomes completely normalized to utilize digital assets in everyday situations, we might not see a lot of growth in this sector.

It goes without saying that cryptocurrency is notoriously volatile, scaring off many charities which may have once been open to accepting crypto-based donations. In the event that the market crashes and the prices for numerous popular coins plummet, any charity that has donations in the form of cryptocurrency will be left with a highly depleted pool of money. If that’s not risky enough, each donation has the potential to come from a dangerous person or organization which could interfere with some anti money laundering laws. Although each transaction is completely traceable and secure, there’s no way that a charity could confirm the identity of someone who donated, adding a small level of risk when accepting digital assets.

In fact, we’ve already seen this kind of risk manifested in the form of stolen money being donated to a popular crypto charity organization. If we’re already seeing some of the potential risks take place in today’s society, we should definitely be paying close attention to how we secure and confirm each valid donation.

There are several risks and opportunities associated with charitable giving in the form of digital assets — namely cryptocurrencies — including increased transparency and donation amounts, as well as money laundering and volatility.

Blockchain & Charity

What makes this such an innovative process is not just the cryptocurrencies themselves, but is more importantly its underlying technology: blockchain. The easiest way to understand blockchain is to think of it as a fully transparent and continuously updated record of the exchange of information through a network of personal computers, a system which nobody fully owns. This makes it decentralized and extremely difficult for anyone to single-handedly hack or corrupt the system, pretty much guaranteeing full validity and trust in each exchange of information.

So what does this all mean for charity then? It actually means a lot and could have tons of revolutionary implications for the industry as a whole, which aren’t all necessarily good. For example, if blockchain technology continues to innovate and advance at its current rate, we’ll soon be living in a highly decentralized world where the idea of “ownership” is changing each and every day. Take Uber, Lyft, and Airbnb for example, which have quickly changed the way we live and transport ourselves. Similarly, blockchain will increase the amount of “shared” assets which will mean that people physically own less and have fewer things to donate.

On the other hand, it also means that we will soon have more access to digital assets which may very well soon be the future of finance. Instead of having to go through a long and tedious process of manually donating to a charity or giving money online, we can simply transfer our digital assets with a click of a few buttons. To further speculate on the potential impact of blockchain on charity, we would have to understand way more than what we already know about the technology since it’s still at a relatively early stage in its development. Until then, we’ll just have to wait and watch for current crypto in charity projects and see how they can handle the digital revolution.

Blockchain is also responsible for much of the innovation that is taking place in the charitable organization industry. Although it may not necessarily be all positive, the changes that blockchain is making to our society will revolutionize the way that we donate in the future.

Crypto-Philanthropy Today

The idea of crypto being used for charity is not some sort of hopeful idea that we can implement in the future, as it’s already happening now. Charities have accepted cryptocurrency donations for years, and for some, it is now the fastest-growing type of donation. The transparent, traceable and low-cost transactions that blockchain systems deliver promise to revitalise our faith in charitable giving.

Organizations from UNICEF to English Heritage — the charity responsible for ancient monuments such as Stonehenge — are currently experimenting with cutting-edge blockchain systems for donation collection. In fact, tech giant IBM is sponsoring a contest for blockchain platforms that can be used for charitable donations. There have also been some pretty exciting initiatives in the field of cryptocurrency which include special-purpose charity cryptocurrencies such as GiftCoin, AidCoin and Cleanwatercoin — which raises funds to bring drinkable water to poor communities.

Yet, the most recent crypto-based charity comes from Coinbase CEO Brian Armstrong. He’s just unveiled a new fund called GiveCrypto.org which — as it says in its name — allows you to give your crypto to charity. With over $4 million raised up to the date of publication, this fund has already brought crypto enthusiasts to the forefront of philanthropic initiatives around the world. If this momentum continues, we’ll surely see more people get involved by donating their own digital assets to charity — so how do you donate then?

Organizations from UNICEF to English Heritage to IBM have all gotten involved in the crypto-charity space. Coinbase CEO Brian Armstrong just launched his (already pretty successful) crypto-charity fund called GiveCrypto.org

How To Donate

Step 1: Buy or mine Bitcoin.

Step 2: Now, you can either store your BTC on an exchange or you can move them to a Bitcoin wallet. This will allow you to stay in control of your private keys.

Step 3: You now have Bitcoin in a wallet or exchange. Time to donate to charity! So head over to Bitcoin for Charity and check out their list of Bitcoin-based charities.

Step 4: Now that you’ve chosen your preferred organization, head over to its website and look for a donate button and click it.

Step 5: Usually, these pages will provide a “donate with Bitcoin” button for easy use. In this case, we have the “Other Ways to Give” button, which will lead to a “Donate with Bitcoin” button.

Step 6: Then, all you have to do is send the desired amount of Bitcoin to the wallet address shown. You can also click the “Donate Bitcoin” button to receive an invoice.

Conclusion

We hope that you’ve learned a thing or two about philanthropic initiatives in the crypto space, or have even given the idea of donating your digital assets a second thought. It’s said that people who create their own wealth are more willing to donate than people who are born into their wealth, further emphasizing the notion that crypto enthusiasts who have been successful with investing have a social and moral responsibility to give back in any way possible. Who knows, maybe the next Bitcoin that you donate will save the life of someone in need? You’ll never know until you donate, so make a difference and donate your crypto.