Not too long ago, the Charities Aid Foundation published a new paper stating that much like a traditional regular, charities could soon perform many o
Not too long ago, the Charities Aid Foundation published a new paper stating that much like a traditional regular, charities could soon perform many of the same functions using blockchain technology. Thanks to blockchain technology, charities now have a new model they can rely on. Many of these charities deal with large sums of money, perform a considerable amount of research and so, they require complex accounting. Through blockchain technology, they will be able to take advantage of features like digital transactions and smart technology increase.
Back in 2015, more 2 trillion dollars worth of revenue was brought into the United States by various charities. Numerous charitable contributions added up to the $373 billion of that amount. There is no doubt that charitable donations are becoming more and more popular day by day, persistent issues that have been plaguing the industry for years now still continue to do so. If this was not the case, people would actually end up contributing far more than they currently do. In fact, some people do not even donate because of these problems.
“Giving Unchained – Philanthropy and the Blockchain,” a 20-page report, was recently released by the Charities Aid Foundation. The report inspects in detail the effects blockchain technology will have on the methods of operation and raising money that are currently being utilized by charities.
Is This How Charities Are Going To Evolve?
According to the report, the methods of contributing to charities and the way social issues are dealt with by funds could soon change thanks to the blockchain technology.
What Are The Advantages Of Blockchain Technology?
Blockchain technology establishes trust: With blockchain technology, third parties are not required and transactions become open. As a result, trust is boosted, which is perhaps one of the most noteworthy advantages of blockchain technology.
Blockchain technology is transparent: Through blockchain technology, the ledger can be publicized so any user can view it. It ensures complete transparency of the system.
Blockchain technology minimizes transaction expenses: Since users are the ones who own and maintain the ledgers, so the assistance of a third party is not required and as a result, related expenses are minimized.
Blockchain technology merges the digital and physical: With blockchain technology, both intangible and tangible assets can be digitized. Blockchain technology also makes it possible to pinpoint ownership status if ever the need arises, while the payment mechanisms involved are totally digital.
The BitGive Foundation is the very first Bitcoin nonprofit charity in the world. According to its founder, the organization frequently teams up with other nonprofit charities like Save The Children and The Water Project. Since contributions are made in the form of Bitcoins, the transactions made for raising charitable funds tend to be more cost-effective, quicker and securer.
In March of this year, $11,000 worth of Bitcoins were donated to BitGive Foundation, another nonprofit charity. The funds went towards building a water well at a Western Kenyan girls school. The five hundred Kenyans living there did not have any accessible water before this well was constructed, so it was definitely something momentous.
Of course, blockchain technology has yet to become fairly popular and known to charities and donors. However, in the near future, some form of this technology will play a far greater role in this industry. The environment is certainly changing and anyone wanting to flourish would have to consider the advantages of blockchain technology.
What Other Advantages Does Blockchain Technology Offer?
Blockchain technology comprehensively minimizes transaction costs: Multiple users share blockchain technology, rather than a single organization or person owning it, which keeps it decentralized. Not middleman like Charity reps or PayPal are needed when making transactions through blockchain technology. Users are able to create smart contracts and other such things using this ecosystem. All of these are computer protocols, like lines of code, and there are triggers involved that record and activate them.
Blockchain technology is more transparent: Sure, blockchain technology may not be 100% transparent, but it is significantly transparent by its nature. Whenever the need arises, any of the system’s users can view who owns what and what has been transferred to whom. Cryptocurrency happens to be non-fungible, which means that every single piece of cryptocurrency is a unique one and cannot be mistaken for or replace another. As a result, donors who make donations to a particular charity can keep track of where their donation is going.
Overall, blockchain almost completely eliminates the transaction-related expenses, while corruption is no longer possible and a middleman is also not required anymore. For those reading this, the next step would be to invest in cryptocurrency and if they ever decide to make a donation, they would hopefully be able to do so in cryptocurrency as well. It would also be worthwhile to read the report that Charities Aid Foundation recently released. Genuine charitable organizations should become involved in ensuring that blockchain technology may take over.