Brother, Can You Spare a Bitcoin?

Is it really all about greed?

That seems to be the consensus opinion around bitcoin, not to mention the accepted view of it as catnip for money launderers, ransom seeking hackers, and drug dealers.

Top economists talk worriedly about market bubbles and bankers dismiss the digital currency as a ponzi scheme. Warren Buffet, everybody’s favorite financial sage, has said of cryptocurrencies, “What’s going on definitely will come to a bad ending.”

While there are certainly many valid criticism of bitcoin and its cryptocurrency cousins, there is another side of the coin. Bitcoin has quietly become a force for altruism and good.

Last year, while many obsessed over newly minted bitcoin millionaires, a major but anonymous ‘crypto-philanthropist’ emerged with little fanfare. That bitcoin investor, who first bought bitcoin when prices were in the single digits, established a foundation to give away 5,057 bitcoins — $86 million at the time. The motto of the donor’s charity, the Pineapple Fund, is: “because once you have enough money, money doesn’t matter.”

In 2017 another 169 wealthy individuals gave a total of $69 Million worth of cryptocurrency to Fidelity Charitable — the nation’s second largest grantmaker after the Bill & Melinda Gates Foundation — through a specialized donor-advised fund. Without bitcoin and the financial gains it has helped realize, such additional generosity might not have come to pass.

Seeing cryptocurrency as an alternative revenue stream, an increasing number of charities are already accepting bitcoin donations. These include some of the best-known international charities, such as the Red Cross and Save the Children.

Unbeknownst to many, there are now even specialized charity cryptocurrencies, all designed to advance worthwhile causes. Instead of driving speculation and the accumulation of wealth, new digital tokens such as Aidcoin and Pinkcoin are designed to raise money for and provide utility to nonprofits and donors. Another digital currency initiative for charities, the RootProject, has issued its own currency (called Roots tokens) to support poverty alleviation and a variety of nonprofit projects. So far they have generated more than $400,000, and they are just getting started.

Cryptocurrency giving will likely continue to grow in popularity as digital currencies become more common and new tools and platforms are developed to support charity giving. This trend will no doubt be driven by millennials, soon to be the largest population of givers and those most actively adopting digital currencies. In fact, one report estimated that one third of them will own cryptocurrency by the end of 2018.

Even lesser known than cryptocurrency for donations is the use of bitcoin’s underlying technology, so-called blockchain, for the development of tools for greater transparency in giving. A groundbreaking new blockchain platform being trialed by the Bitgive Foundation, called GiveTrack, allows a donor to follow the flow of their bitcoin donations to recipient organizations in real time, and to receive proof on how the donation was ultimately used. Such tools can help to address an increasing distrust of NGOs. According to the 2018 Edelman Global Trust Barometer, less than half of Americans are said to trust charity institutions, and trust levels decreased by 9% between 2017 and 2018.

Blockchain-based platforms are actively being tested and deployed to take on global challenges such as the lack transparency in the flow of international aid, in which roughly $8 billion is lost every year through corruption. Other issues being tackled through the technology are the high cost of international remittances for migrant workers, a lack of protection of property rights among billions of the world’s population, voter verification, the tracking of fair trade and products from farm to table, and even the protection of coral reefs.

Far from just supporting a digital slot machine, cryptocurrencies and bitcoin related technology are making real change — the social kind. No doubt the greed will continue, but the good will also persist, transforming the world of philanthropy and driving social change. Fortunately for those in need, and for the future of altruism, there are those who will indeed spare a bitcoin.