6 Advantages of Donating in Cryptocurrency
As we’re sure you know, cryptocurrencies and their underlying technology- the blockchain, have been disrupting a lot of industries and niches for a long time. Industries such as healthcare, public transportation, rental and car sharing, as well as product management might very well change for the better in the upcoming years thanks to the blockchain.
One other industry that cryptocurrencies have been constantly changing is the donation and aid industry. To be more precise, cryptocurrencies have opened associations and non-profits a brand new way for raising funds.
There are numerous potential benefits of donating and accepting donations in cryptocurrencies, especially for non-profits and charity organizations.
One of the main benefits of donating in cryptocurrencies is the lack of or really low taxes. This means that for a person willing to gift some crypto coins to an organization it’s very advantageous because the charity usually receives the entire contribution. Most charities are exempt from taxes in most countries (or are taxed between 1-2% for capital gains), meaning that everything they sell is also not taxed.
Another noteworthy advantage is the fact that crypto donations are valued directly at the time of the donations. In short, cryptocurrencies create a sort of win-win scenario for the charity and the donor.
More global accessibility
For an organization, accepting cryptocurrencies might very well mean the difference between success and failure. One of the main advantages of cryptos, in general, is the fact that they work on a global scale.
This means that charities can attract and access a global audience. Cryptocurrencies also help charity organizations bypass various difficult procedures such as paying international fees, exchanging the received donations, as well as dealing with banks. This type of access ensures that charities can have a presence even in countries where the local currency is not high-value.
There is a lot more transparency involved
If you know a little about cryptocurrencies and blockchains, then you surely know that transparency is one of the most important benefits of the said technologies. Transactions are immutable and have a transparent nature, meaning that anyone can see them (even though there’s a high degree of anonymity involved).
That means that the donations made on the blockchain are less likely to be used for unethical or personal reasons. It also means that tracking the donated funds is also somewhat easier. Anyone can download the blockchain and see every transaction that’s made. For example, charity organizations can also “tag” funds so that the people who donated can see towards which specific project they have been allocated.
To conclude, the transparency offered by the blockchain should make the connection and trust between donors and organization a lot deeper. Donors will inevitably feel safer giving funds to charities if they know that there’s always the option of checking how their donation is being used.
Much faster than fiat transfers
Those passionate about Bitcoin already know that it has been created to be a peer-to-peer, trustless, electronic cash system designed to provide people with full control over their funds. Not only are international transfers costly (and, as mentioned above, they are also prone to taxes), but they are not exactly fast either. Usually, accepting and donating with typical fiat currencies takes days or even weeks.
On the other hand, with crypto, accepting and donating can be made a lot faster, easier, and cheaper. With cryptos, there’s no need to wait on banks to verify the transactions and then process it. There’s no need to exchange the currencies. In short, cryptocurrencies makes moving money across borders a lot easier.
Say an organization is in a country run by a number of corrupt institutions or governments. Cryptocurrencies have the power to take away almost all the influence of the said entities, partly thanks to their transparency, party thanks to their inherent anonymity.
Donations have the potential of increasing in value over time
Since the cryptocurrency market is so volatile, there’s really no telling what can happen to a donation in crypto. On the one hand, it might very well end up to lose its value and depreciate, but it might also increase in value.
Since Bitcoin was introduced there were a lot of ups and downs in the cryptosphere. However, there seems to be a natural tendency for cryptos to appreciate in time. For example, if a donor decides to donate a set amount of early coins, they might very well end up massively growing in value over the following period, increasing the overall value of the donation. Charities might also opt to hold on to some cryptocurrency instead of investing it all at once. With a bit of market knowledge, and with a willingness to take a risk, these associations can end up with very good rewards.
Crypto donations encourage crypto adoption
This is a somewhat natural effect. With each donation using crypto, both the donor and the organization are raising the visibility of cryptos and encouraging wider adoption. This is why it’s very important for all types of charity organizations to ensure that they have the required technology for accepting crypto. Getting early access to crypto donations might prove to be one of the best decisions in the long run.
Considering everything that’s been said, it’s quite clear that cryptocurrency is the future of charity, for a whole host of legit reasons. A valid point to be made here is that the success of a charity heavily relies on its ability to capture the attention of and raise funds from audiences that are receptive to its goals and missions, but also new technologies. And, as we all know, the cryptosphere is definitely on such focus area.
It’s also a commonly known fact that people tend to be more receptive towards acts of altruism. When it comes to charity organizations, there’s a certain level of mistrust. However, with blockchain and cryptocurrencies by their side, charity organizations can earn the trust and respect of various parties a lot easier.