Indeed, the Blockchain technology and the world of crypto currencies are usually associated with the investment sector, either to benefit individuals or companies. However, in addition to its financial nature, the Blockchain platform has proven to be very useful when it comes to helping those in need through donations. But can the Blockchain technology really boost philanthropy?
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The crypt coins and Blockchain have been useful in charity
In recent years, various non-governmental organizations (NGOs) and non-profit foundations have been implementing donations in crypto. These include organizations such as the Italian Red Cross, The Water Project and Save the Children.
In April of this year, for example, the Italian Red Cross managed to raise about US$ 32,000 in crypt coins in less than a month to build an emergency medical post for COVID-19 patients.
Although some studies on the use of Bitcoin in charity show that donations in crypto represent between 1% (in Latin America) and 5% (in the USA) of payment methods, initiatives such as that of the Italian Red Cross show that crypto currencies are gradually gaining ground in non-profit foundations. Some even refer to this combination as „cryptophilanthropy“.
The Red Cross built a medical post in Italy thanks to crypto donations
Why is Blockchain being used in philanthropy?
Simple: Blockchain has many benefits. One of them (and the main one) is that the Blockchain technology provides NGOs with a cost reduction due to the lack of intermediaries.
Currently, donations are managed by intermediaries, such as banks. These are responsible for processing the funds so that the donations reach their destination in exchange for a certain fee. Through a decentralized Blockchain there are no intermediaries, therefore in most cases the fees disappear.
In addition, donations can be seen and tracked by anyone, as the Crypto Trader has the quality of being transparent. In this way, donors are assured of being able to track the path and destination of their funds within cryptophilanthropy.
Even the Chinese e-commerce giant Alibaba created, in 2016, a tool for charity in Blockchain called Ant Love. The system connects Alibaba’s 450 million users to more than 1,000 charities so that donation histories can be tracked. This helps donors understand exactly how their money is being used.