The Impact team recently met with Patrick Duffy and Alex Wilson from The Giving Block. After hearing them speak at the Bridge Conference, we decided it was time for our team to learn more about this cryptocurrency craze. We learned a lot from these dynamic entrepreneurs and we asked them to share some insights for our readers. We hope you enjoy their article below.
What is Cryptocurrency?
The first cryptocurrency, Bitcoin, was launched in January 2009. Since then, many more cryptocurrencies have popped up like Ethereum (ETH) and Litecoin (LTC). A cryptocurrency is a digital peer-to-peer currency that uses cryptography for security, preventing counterfeiting. Built on a distributed blockchain ledger, it is maintained by a decentralized computer network, not a central authority, rendering it immune to manipulation by any single entity that does not control at least 51% of the network.
How Many People Use Cryptocurrency?
Estimates range from 40M to 50M active cryptocurrency users. Consider for a moment that there have only been 24M Honda Civics sold since 1972. Or that there are only 25M active Fitbit users.
Should Nonprofits Accept Cryptocurrency Donations?
We recommend that all nonprofits consider at least the basic step of adding a crypto wallet to their website. In addition to the revenue potential, crypto fundraising is a powerful marketing tool for nonprofits. The mere act of opening a crypto wallet can generate buzz. (search: “lupus foundation cryptocurrency”)
Why Do People Donate Cryptocurrency?
People who use crypto want to use it multiple ways, including donating. Plus, the IRS classifies crypto as property, like stocks, so when you donate crypto, you avoid paying capital gains taxes. If you convert that crypto to cash before donating, you may pay upwards of 30% in taxes. If an organization is not equipped to accept cryptocurrency, crypto donors will go elsewhere.
How Much Cryptocurrency Has Been Donated?
Over the last two years, hundreds of millions of dollars of crypto has been donated to nonprofits. Here are some of the largest examples:
- Pineapple Fund: This anonymous person or group of people donated ~$56 million in Bitcoin to 60 charities.
- Fidelity Charitable: Between 2017 and 2018, Fidelity Charitable received $100M in Bitcoin donations. In 2016, they raised just $7 million. What changed? In 2017, they implemented a targeted engagement of the cryptocurrency community.
- Ripple: Ripple has their own cryptocurrency (XRP), and has donated over $125 million to charities over the last two years, including $75 million to universities, $39 million to Donors Choose, and $4 million to the Ellen Wildlife Fund (courtesy of Ashton Kutcher).
To learn more about the potential of crypto fundraising, or to get started creating your cryptocurrency wallet, visit The Giving Block at www.TheGivingBlock.com
Photo credit: BTC Keychain Used under a Creative Commons (CC-BY-2.0) license