By Mary Abiodun
Many current charity based organisations run under a centralized systems. They engage in fundraising events and campaigns to raise revenue for charity projects. However, the centralized feature of these foundations has faults in the system. The foremost fault being that of lack of transparency, others include lack of trust, faith, accountability and corrupt middlemen.
Leveraging Cryptocurrency for more giving
The idea of using cryptocurencies and their underlying blockchain technology to rectify these faults is could bring significant charitable results.
Investors and some charity foundations are diverting to bitcoin donation, terming it “crypto-philanthropy”. Some blockchain based charity projects have recorded impressive level of success so far. Worthy of mention is the Pineapple Fund that raised 5,104 BTC converted to $55 million for charity.
Charity donation also helps to achieve Satoshi Nakamoto’s aim of global wealth generation and value exchange. It also widens its global adoption. Currently a few charities are using leading coins like BTC and ETH, as well as several independent altcoins like Donationcoin are also emerging in the crypto-philanthropy sector
The potential for crypto and charity
Transparency: existing charities and foundations are managed and controlled by the board members. There are already established platforms like Alice that monitor the flow of crypto period
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Currently banks make transaction charges, but the lower payment fee structure of the blockchain will ensure the more of the donation gets to the beneficiary. That is, if I donate 5 BTC to you, you get the 5 BTC.
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Corrupt Middlemen: blockchain was set up precisely to eliminate middlemen, With blockchain and crypto, a direct donor to beneficiary transaction is done.
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Mining: another creative way to give through blockchain and crypto is mining where you don’t have to pay crypto but just your battery power to generate mining energy. With this, even those who find it hard to give would have donated indirectly. UNICEF is on such a project.
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4. Accountability: compulsory accountability is ensured and at the same time facilitating maximum output from foundation owners. Revenue source Extension: charities will gain a new source of revenue generation.
Challenges
Complexity and exchange access: the cryptosphere to most people is complex, especially to the locals. Although, most funds are going to the wallets of local people, few are able to access exchanges that will help them convert the cryptos to their local currency. Also current regulations, cryptocurrencies are not answerable to any government or any central regulation.
