Benefits of Implementing Blockchain Technology in Charity
Charitable giving is on the rise, mostly due to resilient economic conditions in North America and Europe over current years. According to Giving USA, 2017 was the first year that contributions from the US crossed the $400 billion mark, a rise of five percent over the preceding year.
While contributing to charity may deliver us with a warm glow, few people stop to consider exactly where their donations end up. Charity fraud is a global issue, creating a risk that donated funds end up being siphoned off through scams or corruption.
What can Blockchain do for Charity?
Blockchain technology is creating waves in many sectors such as supply chain due to its functionality in providing a secure, unalterable record of value transfers. This makes blockchain the ideal technology to bring transparency to the distribution of charitable donations.
Using an open public ledger, a charity or NGO could collect donations in a digital currency. Each unit collected is traceable from the moment it’s contributed to the point that it’s spent on goods or services. Cryptocurrency transfers are peer-to-peer, meaning that charities could also decrease fees incurred by intermediaries like banks or foreign currency exchange services. 2017 and 2018 saw a proliferation of tech start-ups generating blockchain-based digital tokens to crowdfund their new business venture. While the regulators have now started to clamp down, in 2019 blockchain innovators are now turning to regulated token generation events, known as security token offerings (STO.) Charities and NGOs could similarly use such a mechanism to crowdsource donations for their endeavours.
Furthermore, blockchain-based smart contracts could even automate the distribution of funds for particular projects. For example, if a charity collects funds to build a school, the funding could be released by smart contracts in stages once specific milestones of the construction project are completed. Some projects are already working on these kinds of solutions for charities. Alice is one example. The tech firm is collaborating with the Charities Aid Foundation and Imperial College London to develop a blockchain-based platform aimed at transparency in charitable fundraising.
How the Blockchain Community is Giving Back
The Bitcoin boom of late 2017 and early 2018 saw massive growth in the market size for cryptocurrencies and blockchain. Now, some blockchain firms are demonstrating their commitment to social responsibility by setting up charitable initiatives. In many cases, these are also leveraging the benefits of blockchain in managing charity funding.
#VoiceYourLove
For example, Tron is a decentralized application protocol, launched in 2018. The project is managed by the Tron Foundation, a non-profit based in Singapore with tech wunderkind Justin Sun at the helm.
Tron recently announced its collaboration with the ALS Association on an awareness campaign timed to coincide with Valentine’s Day, called #VoiceYourLove. The ALS Association had enormous success back in 2014 with the Ice Bucket Challenge, which went viral on social media. The new campaign invites people to create videos where they talk about their loved ones. Contributions to the #VoiceYourLove campaign will be tracked through to distribution using blockchain, with the results published at the end of the campaign. Sun himself has personally donated $250,000 and is “urging others in the blockchain industry to voice their love by donating to help find a cure.”
We strongly advise you to make your contributions to charities that accept bitcoin and other cryptocurrencies that work towards causes that resonate on a personal level.
