I'm raising money for a cause I care about, but I need your help to reach my goal! Please become a supporter to follow my progress and share with your friends.
Understanding blockchain technology and cryptocurrencies can be "cryptic." However, the charity sector will profit from some of these developments.
To handle and distribute funds safely and transparently, blockchain technology has the potential to influence the charity sector and philanthropy significantly. Businesses and governments are already using blockchain developments for a variety of purposes.
However, what is it specifically and why is it important?
Although the math underpinning blockchain and cryptocurrencies is indeed sophisticated and sometimes appear like esoteric jargon, the concepts they represent are actually rather simple. As blockchain usage increases, it is wise to become familiar with the fundamentals.
Since banks were required to mediate confidential online transactions between buyers and sellers, blockchain began in 2008. Unknown author Satoshi Nakamoto anonymously published a white paper that offered a solution for doing away with the necessity for a bank to act as an intermediary between buyers and sellers.
The concept is rather straightforward: a blockchain essentially functions as a ledger of transaction data owned and updated by all system users. Random market participants serve as "nodes" to confirm and ensure that transactions uploaded to the "blockchain" are legitimate. These transactions are then encrypted and posted to the public ledger, which deters fraud by guaranteeing total transparency of every transaction made and ensuring that it is constantly traced and validated. Once anything is recorded in the ledger, it cannot be changed, protecting against data tampering of any type.
The open-source code for building blockchains, made available in 2009, gave rise to cryptocurrencies, or digital currencies based on Blockchain development technology but unaffiliated with any central bank or government. The value of cryptocurrencies like Ethereum and Litecoin is currently determined by the value of Bitcoin, the most well-known cryptocurrency.
With the widespread use of digital currencies, organizations now have the chance to interact with a different group of contributors. Crowdfunding websites that take cryptocurrency are the simplest place to start when searching for charity internationally.
The advantages of cryptocurrencies for charities go well beyond mere marketing ploys; they include the capacity to track and trace gifts in total transparency, fostering greater donor confidence. By enabling organizations to accept donations from anywhere globally without paying foreign exchange fees or taking currency exchange rates into account, digital fundraising can revolutionize fundraising on a larger scale.
The capacity to transact in non-geographic currencies is a huge advantage for charities operating in challenging regions worldwide.
For internet fundraising initiatives, large charities have joined up with new currencies. The website cryptogivingtuesday.org has big names like UNICEF, and the Salvation Army registered to take Bitcoin, Ethereum, and other cryptocurrencies.
A few UK organizations take Bitcoin and other popular digital currencies, albeit they are less numerous than their US counterparts. Examples include Breast Cancer Support and the Royal National Lifeboat Institution. By joining Giftcoin, English Heritage is also experimenting with Blockchain technology and letting donors know how and where their money is being used.
By allowing contributors to follow their contributions, blockchain's verifiable transaction history has contributed to increased transparency in the utilization of money. Platforms like Give Byte gather and convert surplus computer capability into money for charitable organizations by mining donors' unused processing power on the Blockchain.
Although not all organizations use blockchain or bitcoin fundraising, funding and interest exist in this technology area. For instance, the Information Commissioner's Office (ICO) started awarding awards to assist creative charity solutions in 2018.
The ICO's financing was made accessible for independent initiatives promoting privacy advancements and was aimed toward Blockchain for nonprofits. Another illustration of the considerable interest in blockchain for charity is the partnership between BitGive and the University of Edinburgh, which focuses on using cryptocurrencies for charitable organizations.
Because it is less well-established than important physical currencies, cryptocurrency for charities has disadvantages.
One is people's ignorance of blockchain technology. The RNLI was one of the first organizations to take cryptocurrencies, beginning in 2014.
Cryptocurrency price volatility is the more obvious issue that charity should be aware of. The most popular cryptocurrency, Bitcoin, had a price range of £8,668 to £16,118 in the first week of July 2019 alone. Because of this vast variation, it is challenging for charities to base their financial planning on the value of the currencies they have on hand.
But both donors and nonprofits may benefit from this volatility. When cryptocurrencies appreciate, donors may gift their already acquired ones to charity, giving them the benefit of the rising price.
Transparency is essential for how Blockchain may be used to track the location of donor monies in the future. "Public ledgers, non-fungible units, and openness are all related to contribution transparency. Transparency is one of the main elements of almost all active initiatives, according to Rhodri Davies, Head of Policy at CAF, in a conversation on how blockchain will affect the nonprofit sector.
Even though blockchain technology and cryptocurrencies may still be mysterious to some, the increasing interest, funding, and donor opportunities have enthused many more people in the nonprofit sector. As a result, not only have some organizations started accepting cryptocurrencies, but pilot projects to promote their wider adoption have also received support.
Can’t donate? Please share. Even a quick share on Facebook can help.
The average share raises $97.