Before Alexander Graham Bell patented the telephone in 1876, we couldn’t imagine using a block of plastic and wires to speak to someone down the road, let alone across the globe. History has shown on many occasions that the seemingly impossible is actually possible. Surely the Wright brothers got a few discouraging looks when they proposed human flight! In any case, we’ve certainly come a long way. So long in fact that we have developed an open-source virtual currency.
While you may not know all about the illusive crypto-currency, you’ve certainly heard of it. True to buzzword tendencies, the Bitcoin brand received 3.4 million mentions online in 2013. In November alone, it was the topic of discussion in 14,179 online stories and articles. Since the first Bitcoin transaction in 2009, the average number of daily Bitcoin transactions increased from less than 100 to 55,000 in 2013 (PwC report).
So what’s all the buzz about, and what the heck is a Bitcoin? Defined, it is a digital currency in which transactions occur without the need for a central bank or regulation. The most interesting aspects of the digital currency lie in its infrastructure – it cannot be double spent, has little-to-no transaction fees, immune to fluctuations by central banks, and has no float time.
Now that you have an idea what it is, you’re probably wondering where you can spend Bitcoin. From online dating sites to pharmacies, more businesses are beginning to accept Bitcoin as a form of payment. Topping Bitcoin Values’ list are some of the biggest names in the game, such as Amazon, CVS, WordPress, Target and PayPal. Just last week, Dell announced that customers would be able to make purchases on its website using Bitcoin “as a result of listening to customers.”
How Bitcoin is Changing Philanthropy
As we begin to see more retailers and businesses accept Bitcoin as a form of payment, it makes us wonder, “is this the future of philanthropy?” Recent evidence would make it seem so.
In 2013, the Jamaican bobsled team qualified for the Olympics for the first time in 12 years but faced a major hurdle. The team couldn’t afford the $80,000 needed to outfit a sled and travel to Sochi. Their story went viral, quickly gaining financial support from the online community. Across Indiegogo, Crowdtilt, and Reddit, the team raised nearly $200,000 combined. Of particular interest, the Dogecoin Foundation started the “Dogesled” crowdfunding campaign raising $30,000 in 12 hours. Dogecoin, a crypto-currency very similar to Bitcoin is well-known for its inexplicable yet viral “doge” memes, featuring a shiba inus pup in various settings (cute?).
More recently, the Bitcoin Donation Cup with the support of 10 Bitcoin companies raised awareness for both charities and 2014 FIFA World Cup fans’ needs. The global campaign enabled fundraisers to generate donations for participating charities while 30% supported fans’ food, lodging and travel expenses. BitPay, a major payment gateway offering plugins for 22 e-commerce solutions, processed donations and approved participating charities, while providing real-time donation tracking for the event.
Should we expect more of this online giving to come? Possibly, but we think there’s still a long way to go before we see mainstream use of digital currency in the nonprofit sector. In our next blog post, we’ll explore the very real benefits and risks associated with Bitcoin in philanthropy.