Cryptocurrency Use Cases In Philanthropy And Charitable Giving

INTRODUCTION

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Cryptocurrency is shaking the non profit world by enabling effortless donations with it’s low transaction costs and full transparency. Most traditional donations are at times very expensive, slow and have little or no transparency at all making a lot of people unwilling to donate. Cryptocurrency solves all of these problems which in turn makes both donors and charitable organizations want to get involved with it.

With the advent of blockchain, cryptocurrencies allow creating a transaction log that is visible to everyone. Thanks to this, donations are always traced to the right recipient effectively eliminating the chances of them getting lost or being mismanaged. With greater accountability, more people feel safe to donate as they are assured their contribution goes to a good cause.

International donations become easier with cryptocurrencies as they do not require an intermediary to do the dealing. This is great for people looking to aid organizations across the globe because the donation can directly flow from the donor to the NGO. In these ways too, without a doubt, this invention shifts the concept of philanthropy to a new level.

• DISMANTLING THE BARRIERS TO CHARITY

Cryptocurrency gives the possibility of bypassing several obstacles, in the form of restrictions, that come with regular donation systems. For example, users in areas with no access to the banking system are able to donate directly from their digital wallets, while bypassing banks altogether.

Such accessibility makes it possible for donors of all sorts to channel funds into charitable activities they wish to support all around the world. On top of that, cryptocurrencies lower the transaction costs, which ensures that a higher percentage of the donations goes to the intended recipients. Such efficiency means that cryptocurrency is the best option to optimize charitable donations.

The ability to transact with cryptocurrency is helpful for organizations as well. They are able to receive the funds within a few moments instead of having to wait for several days like with the traditional systems. This use of cryptocurrency is especially useful for charities that depend on quick money transfers.

• ENHANCING TRANSPARENCY AND TRUST

Blockchain ensures trust among users by maintaining a record of past transactions which are almost impossible to edit. This is crucial in ensuring that in futher transactions, donor organizations have faith in how their past donations are spent and helps in the smooth functioning of the system, especially in the world of philanthropy.

Since the system helps in the mitigation of fraud, it is guaranteed that money spent is within the intended purpose. Furthermore, it provides donors proof of how their funds were utilized which enhances their faith in the organization in addition to assisting in enhancing the reputation of the organization. Furthermore, some platforms allow donors to set criteria for the dispersal of their funds and to what they can be used, which puts them in a more secure place.

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Permissioned donations, also called trustless donations, use smart contracts to delay the donation until all specified conditions have been met, thus offering more reliable means of assuring those involved in making donations.

• FACILITATING CROSS-BORDER DONATIONS

The use of cryptocurrency makes international donation easy as it cuts out the need for conversion of funds and acting agents. This is useful for any organization out there that is global in nature as one can send funds to them with ease irrespective of the country they are based in.

For instance, charities working in countries with less stable currencies are receiving donations in more stable cryptocurrencies and don’t lose value. It is secure to make sure that resources are able to purchase value and will be of efficient usage.

Additionally, Being able to use cross border donations means any person all of the world can make a contribution to a global cause without limitations. This universal missionary spirit improves the effectiveness of charity and philanthropy making the world a better place.

• ENCOURAGING CROWDFUNDING AND MICRO-CONTRIBUTIONS

Some cryptocurrencies allow for micro-donations since they enable people to make low-value contributions at low fees. With conventional payment systems, donations are discouraged as low-value transactions usually attract high fees. With cryptocurrencies, this challenge is addressed and people are free to donate any amount, however small.

This feature fits in perfectly with the description of crowdfunding campaigns where countless small donations combined can help achieve a great goal. Distributed ledger technology allows these campaigns to happen by offering clear and secure methods of raising money and adjusting dispersed funds.

They also make it easier for more people to engage in philanthropy and donation.Helping the underprivileged without expecting a lot in return is something most would want to do, and micro-donations enable more extensive contributions than what single large donations can do. Such a culture helps organizations achieve their goals.

CONCLUSION

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Universally, the concept of giving is being disrupted by cryptocurrencies since they facilitate easier access, establish better transparency, give way to micro giving, and enable donations across borders. These revolutionary concepts advance and simplify the system for giving. As the penetration of cryptocurrency further increases, its contribution to philanthropy is bound to increase too, resulting in a much more efficient way of funding humanitarian causes across the globe.