The underlying technology behind cryptocurrency called blockchain can help charity projects and fundraising in times of pandemic like Covid-19. The novel coronavirus took the World by surprise. We never imagined these levels of fatalities and subsequent grounding of the World Economy.
Blockchain Technology is built on the core values of decentralization. Which means no government or central organization controls it. Now, Imagine how fast, easy and secure it would be accepting donations in cryptocurrencies for charity and fundraising?
Reasons Blockchain and Cryptocurrency can help Charitable Efforts
1. Decentralization –
In the area of organizing charities where people donate cash towards a particular course, using the blockchain technology for this is ideal due to the technology being decentralized unlike the technology our banks use which is centralized. To donate here using cryptocurrencies you simply need to send your donations directly from your wallet to the recommended wallet address of the charity.
In this case your donations goes directly to the charity without having to pass through any third party for verification or need of a bank account manager to manage the account where donations are sent. Most especially there’s no fear here that the bank account manager in charge of managing such accounts may misappropriate or launder funds.
Recently someone moved 145,000 bitcoin that is about $1.1 Billion paying $0.69 in fees . If that was donated towards charity, that means the money went directly to where it was donated to, with no processing time to clear the funds.
2. Transparency :
Blockchain is a shared distributed ledger which comprises of blocks and these blocks are made up of; data, previous hash and hash. In the data block you find all transaction details and asset details. While in the previous hash block you find hash values of previous blocks and in the hash field you will find hash value for current block. According to IBM, blockchain is a ledger that facilitates the process of recording transactions and tracking assets in a network.
The big deal here is, accepting donations in cryptocurrencies by non-profits and charities means every single transaction is recorded and can be tracked on the blockchain. Those transactions are also open for everyone to view and track by simply inputing the wallet address or transaction hash on the blockchain explorer.
Blockchain can be accessed anywhere, by anyone and at any time. Blockchain technology is not limited to your geographical area or your level of expertise or if you are amongst the bank or unbanked population and most importantly there’s no down time it runs 24/7 365 days a year.
Anyone, anywhere in the world can donate towards charity at anytime using cryptocurrencies.
Another important feature of blockchain technology is anonymity. Unlike our traditional banking system where each account number carries personal information about the account holder. Crypto wallet addresses carry no single personal information about the owner of the wallet. So every donation in cryptocurrency towards charity will remain anonymous. Big donors to charities love to stay anonymous, for charities utilizing blockchain and accepting donations in cryptocurrency this will be a big win.
5. Fast Transaction Speed and Low Fees:
Non-profits and charities will benefit immensely from the fast transaction speed and low fees of cryptocurrency transactions. This can help charities move funds easily with reduced transaction fees, most especially in remote areas with no financial infrastructure.
Blockchain cannot be hacked. If funds donated towards charity are received in a decentralized wallet. It can only be accessed through the private keys of the wallet. This means only the person in possession of the private keys of such a wallet can have access to the funds.
Although there have been cases of cryptocurrencies hacks. These happens mostly for centralized wallets which are wallets you do not hold the private keys to, a good example are wallets in centralized exchanges. Also, there have been hacks reported for decentralised wallets due to people clicking phishing links or mistakenly inputing their details like private keys on cloned websites.
A large number of non-profits and charities are accepting donations in Bitcoin, Ethereum and other cryptocurrencies. These include Red Cross, Save the Children, The Water Project, Binance Charity Foundation, Huobi Charity, The Giving Block, Blockchain4covid19, etc.
Accepting donations in cryptocurrencies by charity projects has opened up new opportunities for project financing. The ease, speed, accessibility, anonymity and security that accompanies this new method of project financing makes it unique.
Based on the reasons highlighted above, you can see for sure why cryptocurrency and blockchain technology will help non-profits and charities tremendously.