How cryptocurrency is revolutionising the NFP sector one coin at a time
Accepting cryptocurrency has never been easier, and it’s the new way to increase donations
As technology evolves the not-for-profit sector, so too do payment methods. Through cryptocurrency, charitable organisations have a new way of increasing donations.
Jonathan Keim, Executive Project Manager, from Blockchain Relations, told Third Sector the new donation method is a revolutionary way for charity groups to access new payment technologies that enable a steady stream of income for their ongoing expenses.
“There has been a great deal of wealth created because of the recent crypto boom and these new high-net-worth individuals would prefer donating in a cryptocurrency as opposed to converting fiat money,” Keim said. “It could open up a very large funding source to accept payment from those who have done very well in the crypto markets.”
Cryptocurrencies like Terracoin use masternodes that offer a form of residual payouts. These are always-on VPS servers that are set up to continually receive a percentage of the block rewards in exchange for providing services to the network.
Masternodes provide a continual stream of income in the form of cryptocurrencies but only use a fraction of the planet’s energy, rather than an alternative to mining the fund that may have environmental impacts due to the amount of energy consumed.
“Accepting cryptocurrency has never been easier,” Keim said. “Coinbase, Coingate, BitPay, CoinPayments and many other exchange and wallet services make it almost as easy as setting up an email account.”
By accepting cryptocurrencies, an organisation can avoid remittance fees from world-wide donators while gaining access to populations with fiat currencies that are not as easily converted in the not-for-profits own local fiat currency.
“There has also been a great deal of wealth created because of the recent crypto boom and these new high-net-worth individuals would prefer donating in a cryptocurrency as opposed to converting to fiat money,” Keim said.
Cryptocurrency activist, Josh Cook, said: “The ultimate goal is seeing whole masternodes donated to nonprofits so that they would get payouts forever instead of only having one-time needs met by one-time donations.
“Anyone running a non-profit knows the challenge of maintaining a loyal list of donors to accomplish their goals and we hope to make this aspect of fundraising much easier for them.”
Cryptocurrency works for donors because it virtually eliminates the need for credit card payments and remittance processing fees so that not-for-profits can reduce their operating costs and do more with the donations they receive.
Exchanges and wallet service companies are constantly targeted by hackers due to the amount of wealth they hold. While these companies take measures to hold the majority of funds completely offline and inaccessible to minimise theft risk, ultimately you are trusting that the service will stay in business.
“To establish trust, charities should point out the millions of dollars are securely transacted in the crypto market every day without issue and that proper storage measures are in place at their organisation for any donations received in crypto.
“We’d also encourage providing links for future education so their donors can easily learn more and familiarise themselves with this revolutionary alternative to payment and wealth storage,” Keim said.
Keim said that while an expert is not necessary for an organisation to start accepting the payment form, for security reasons “it would be wise to have someone knowledgeable in charge of managing passwords and/or private keys to ensure funds aren’t lost to theft, loss of credit or other potential pitfalls.”
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