California’s Golden 1 Center is where the NBA’s Sacramento Kings hold court. Starting last week, the 17,600-seat arena also became home to another competitive endeavor: mining for cryptocurrencies.
The bitcoin () the Kings team is now also mining crypto in a data center deep within the arena to fund a scholarship program for local charities. Powered by rigs from local company , the Kings’ has pledged to use the proceeds to fund a scholarship program for Sacramento-based charities.
There are hundreds of pilot blockchain projects focused on social good, including growing numbers of
“Opportunity begins when technology allows the world to find innovative solutions to complex problems,” Kings owner and chairman Vivek Ranadivé said in a statement.
An Old Idea for a New Currency
Using cryptocurrency for charitable purposes dates back to bitcoin’s early days, when there were limited ways to “spend” virtual currencies. It also sparked some of the first experimental use cases for financial giants like , whose charitable foundation received $69 million worth of cryptocurrency donations last year.
But as adoption and public interest in blockchain has grown, so has the interest of both philanthropic organizations and donors in the blockchain space. In late June, Coinbase CEO Brian Armstrong launched , a charitable effort that plans to distribute cryptocurrency directly to as many as 1 billion people in need. Sparked by Armstrong’s personal donation of $1 million, the nonprofit already has raised $3.5 million as it moves toward an initial goal of $10 million.
“The reputation of the crypto community has been dominated by images of ‘bros in Lambos,’ whose antics get a lot of attention, Armstrong . “This doesn’t represent the best of our community. Most people I respect and know in the crypto ecosystem believe we have a responsibility to help this technology reach a much wider audience.”
All told, there were more than $200 million in cryptocurrency donations to charity in 2017, according to Paul Lamb, principal of , which focuses on working with nonprofits on blockchain and cryptocurrency initiatives. “The cryptocurrency market is just finding its feet,” Lamb tells ThirtyK. “If and when it does, there may be massive new revenue streams available to charities.”
Those cryptocurrency donations are reaching a broader range of charitable causes. In 2014, became the in the U.S. It has partnered with seven NGOs and nonprofits, including Save the Children and the Water Project, and notes that the low transaction fees facilitated by cryptocurrency — less than 1 percent of giving — helped more donations get to the people who need them. Other organizations, like , combine cryptocurrency with the GoFundMe model, allowing users to scroll through a broad range of campaigns and choose the ones where they’d like to donate cryptos. In the Washington, D.C., area, there’s even , which capitalizes on the popularity of bitcoin to sell real-world “tokens” that the homeless and nonprofits can exchange for food at participating restaurants and food trucks.
Lamb tells ThirtyK there are hundreds of pilot blockchain projects focused on social good, including growing numbers of . At the same time, many traditional foundations and charities have yet to embrace the technology.
“My sense is that blockchain is not fully on the radar… just yet, and for many that are thinking about potential blockchain technologies, there is a wait and see approach,” Lamb says. “Most of the current thinking around blockchain is colored by bitcoin, which is just the tip of the iceberg when it comes to philanthropic applications of the technology.”
Changing the Infrastructure
For traditional philanthropies, the potential of blockchain technology to streamline operations, provide transparency and bypass the hurdles posed by national borders may be even greater than the cryptocurrency donations they receive.
With its goal of reaching one billion people, GiveCrypto is focused on direct transactions to the unbanked. Up to two billion people worldwide who aren’t connected to the traditional banking system still have access to the internet through smartphone, the organization says. That creates the opportunity for them to receive direct grants and donations. Blockchain and direct giving also have the potential to bypass foreign transaction costs and the corruption that bedevils relief efforts in many countries.
The technology itself can help nonprofits reach more people. BitGive’s , currently in beta, is a blockchain platform that allows nonprofits to show donors how their funds are spent. In similar fashion, Alice.si is developing a “decentralized social impact network” on the Ethereum blockchain that requires charitable organizations to provide independently validated proof that donations are meeting set goals to participate. And , which calls itself the world’s first cryptocurrency for charitable giving, raised $1 million in a presale but in April .
Such efforts, Lamb says, demonstrate how the technology “is capable of supporting vastly improved systems for donations and donation transparency, impact tracking, and operations for charities and foundations.”
Small wonder that established organizations are beginning to explore the potential. UNICEF, for example, created its first in 2017. The global organization also has issued a valued at up to $90,000 and held a hackathon in Kazakhstan.
At the same time as it helps existing organizations, the technology may open the door for new kinds of philanthropy, according to Lamb. “I expect we will see new types of philanthropic organizations emerge, enabled by the kind of decentralization, automation and tokenized ecosystems which blockchain makes possible,” he says.