5 reasons to implement blockchain for your charity

by Life Charity Co-founder — Arman Shirinyan

5 reasons to implement blockchain for your charity

1. The first and most important reason to implement blockchain is the transparency of transactions in the blockchain network. Charitable giving today has established a reputation of being an area where unscrupulous individuals can launder money and scam well-intentioned donors. Many of these issues exist only because of non-transparent financial systems within charitable foundations and organisations. The blockchain financial structure can solve this problem and make every transaction transparent for donors.
2. Attract new sources of funds. With the help of blockchain technologies we can attract more than 200% of the current total capitalization of charities online, which is equal to $233 million dollars. In the best case scenario, charitable foundations could attract more than $1 billion in digital assets, which is only 0.25% of total cryptocurrency capitalization right now. Total growth of the cryptocurrency market from January 1, 2017 to January 1, 2018 was more than 3000% — with half of this growth rate we can achieve more than 15 billion dollars in investments in charity from blockchain technologies by the years 2019–2020.
3. Safety of assets. Besides transparency, blockchain networks like Bitcoin or Ethereum offer charities the ability to process secure transactions than can’t be hacked in any way. At early stages of development, there were cases where people generated transactions worth millions bitcoins, but this has been fixed, and in last 2–3 years we have never seen any cases where transactions in the Bitcoin or Ethereum networks have been hacked.
4. Smart contracts. Smart contracts can be used as a tool for advanced crowdfunding for charitable events. It makes it much easier to collect funds and use them for charity. From my personal experience, I know that the organization of charitable events (especially when they are funded by local government) is a challenge. The complicated structure for organizing these events, including rewards for the biggest donors, and transactions between donors and foundations, can be automated with smart contracts.
5. Last but not least — the absence of third parties. One of the most important things that blockchain can bring to charity is independence from centralized financial institutions, also known as banks. The financial structure of banks could pose a big problem in organizing charitable events. There have been many occasions when banks held money that has been collected for charitable needs, and the organizers of charitable campaigns had to jump through hoops to get through the bank’s verification processes to just get at the money that has been collected. For many charities this delay would be unacceptable, as it’s important to deliver the funds as quickly as possible to the people who really needs them. With a blockchain financial structure, the only owner of your money is you, and no one will ever hold your digital assets for any reason.