IS THE HIDDEN POWER OF CRYPTO CURRENCY SOCIAL CHANGE?Published: 07-21-2018
Crypto Currency has truly been the darling of 2018 tech and innovation conferences around the world. Every early adopter has been singing its praises much to the blank stares and confused looks of those who don’t quite understand how it all works and if it is just a passing fad or here to stay.
Like the majority of innovations, Crypto Currency could indeed be a passing craze unless it proves to make our world a better place; until quite recently, most people’s understanding was crypto currency was only improving the lives of early investors. In the past month, however, more examples have surfaced about the potential for Crypto Currency to do good in our world and to be a catalyst for significant social change. Encouraged by these stories, we were moved to share with you how this relatively mysterious innovation can create equality, empower those in poverty, and also define a new kind of philanthropy.
The following are three current examples of the potential for Crypto Currency to do good in our world:
The first ‘Giving Circle’ for Crypto Currency
GiveCrypto is a new global endeavor to distribute bitcoin and other digital currency directly to people in need. It is the brainchild of Brian Armstrong, the CEO of digital currency service Coinbase, who is launching the project with a personal $1 million donation, and is encouraging anyone who’s amassed crypto wealth—including Bitcoin, Ethereum, XRP, and ZCash—to join him.
“I started thinking about this last year when I saw all this money people were making in crypto. The goal is to target people in poverty and economic crisis.”
Donors will give the crypto funds to needy recipients, who can then decide to keep the funds in cryptocurrency or exchange them for traditional money. The charity aspires to raise $10 million by the end of this year and grow to a fund of $1 billion in the next two years.
Armstrong points to a growing body of research that suggests direct cash transfers are an efficient way to end poverty, as opposed to programs in which a large portion of resources may be consumed by administrative overhead. He also believes cryptocurrency is an ideal vehicle for transfers because it costs almost nothing to move money and gives people who lack banking a way to control wealth with just their phone. Research shows that 63% of people in third world countries have a cell phone.
While initial donations to GiveCrypto will be used in part for operational overhead, Armstrong says the organization in the future will be structured to let donors have 100 percent of their gift go to needy recipients.
GiveCrypto now has the challenge of selecting recipients when there are over a billion people in the world living in dire poverty. GiveCrytpo will also have to set in place measures to ensure donations are not misused or taken by local criminals or corrupt governments. This is not a new challenge to the philanthropic world but may come with added concerns with virtual currencies.
GiveCrypto’s approach to preventing mismanagement involves taking small steps at first, including feasibility studies to figure out what works. Armstrong says there will be “lots of learning and testing” over several years.
The project will eventually rely on “crypto ambassadors” who will help identify people in need, and also assist them in learning how to use the digital wallets that store cryptocurrency.
Armstrong’s initiative coincides with other major philanthropic initiatives tied to cryptocurrency including a project known as the Pineapple Fund, which involves an anonymous Bitcoin billionaire giving away tens of millions to charitable causes.
Armstrong thinks all of these projects will encourage those who grew wealthy on the cryptocurrency boom to do more for others. He bemoans the popular image of “bros in Lambos”—vapid crypto millionaires who buy Lamborghinis for status—and believes it doesn’t reflect the thoughtful, broad-minded nature of many in the digital currency community.
With a new generation of Currencies come a new generation of philanthropists.
The National Philanthropic Trust, a nonprofit donor-advised-fund sponsor, received 10 gifts of cryptocurrency in 2017 worth more than $10 million — much more than it had ever received previously, according to President Eileen Heisman. The largest gift was valued at $8.5 million.
Chris Larsen, co-founder of Ripple, a company specializing in cryptocurrency, is the world’s richest man in cryptocurrency with an estimated net worth of $7.5 billion. Fortunately, he is also inclined to share this wealth and has already chosen to show that in some highly meaningful ways.
One night earlier this year, the crowdfunding website DonorsChoose.org featured more than 35,000 requests from teachers seeking cash — for field trips, computers, musical instruments, and even an incubator for chicks. But when the clock ticked past midnight, those requests vanished. All of the teachers’ needs had been answered by a single donor — Ripple.
The company and its executives agreed to cover the cost of every project on the nonprofit’s website following an email pitch from DonorsChoose founder Charles Best and just a few weeks’ discussion. DonorsChoose previously had never received a gift of more than $9 million. Most of its big requests are for $1 million or $2 million, according to officials.
Ripple’s donation — $29 million in XRP, the cryptocurrency it developed — is the largest gift in the 18-year history of DonorsChoose. One in six public schools across the country will benefit, according to the nonprofit.
Ripple is the second major donor in recent months to publicly make big contributions in cryptocurrency. In February, Larson went on a two-month giving blitz that showered some $56 million on nearly 60 nonprofits, including many small charities.
The six-year-old Ripple is a newcomer to big philanthropy. It has no formal “social-good or philanthropic program just yet,” says Monica Long, senior vice president for marketing. “This is the company’s most significant philanthropic effort to date,” Ms. Long says. “But I expect that beyond our DonorsChoose collaboration, there’d be more to come on that front.”
Donor advised funds (DAF) also are reporting an increase in contributions of cryptocurrency. Fidelity Charitable says it received $69 million in such gifts in 2017, a tenfold increase from the previous year.
A huge run-up in the value of cryptocurrency partly explained the 2017 surge; the value of Bitcoin, for instance, increased from $1,000 to $19,000 over the course of 2017, the Fidelity report noted. But crypto values crashed in January, and though they have increased since, many economists say to expect more volatility.
An event in Los Angeles dedicated to the potential for Cryto Currency to do good
Los Angeles will be the location for an all-day event in February 2019 (date to be confirmed) exploring and celebrating the impact Crypto Currency can have on our world.
Blockchain pioneers and social impact visionaries will convene at the inaugural Block for Impact Salon to dream up blockchain solutions for today’s biggest real-world challenges. The event will create a space for cross-sector collaboration among blockchain enthusiasts and skeptics alike. Tech, environmental, and social impact innovators and businesses will meet to explore, imagine, and co-create blockchain applications around the Sustainable Development Goals ranging from climate change to economic inequality. The Salon format will allow for a group of 50 innovators in the Block for Impact space to connect, share lessons learned, and build new partnerships.
The event is the brain child of Ashoka Fellow and serial social entrepreneur Lily Lapenna. Lily has always been an early adopter of new technologies and trends. She had been following the rise of cryptocurrencies and quickly saw the potential for blockchain to reshape how we think about banking, finance, partnerships, and catalyzing models for change. Realizing the power of the blockchain to reshape the future in a way that traditional financial institutions could not, Lily embarked on a mission to pull together the most powerful minds in the development of blockchain with those working on social impact strategies.
For more information about the event you can contact Lily HERE As co-founder of ‘In Blockchain, We Impact’, Lily is driven by the potential of crypto currency to create social impact and equity:
“Block for Impact comes from a question I’ve been pondering for quite a while: if we were given another chance, would we do business differently? I cannot help but believe that yes, we would! We would make social impact and sustainability the main gig rather than the side gig. We would ride together rather than leave a majority behind.”
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