The cryptocurrency exchange Coinbase will soon be urging investors to buy into the business with an initial public offering.
But Coinbase CEO Brian Armstrong has another recommendation for people who want to dive into the world of virtual money.
The Armstrong charity, GiveCrypto.org, employs “ambassadors” to find needy people who could benefit from cryptocurrency donations.
The ambassador program marks a new chapter for the charity, founded by Armstrong, whose average net worth is about $ 6.5 billion, in 2018.
“We are very much a disciple of the philosophy of direct money transfer,” GiveCrypto CEO Joe Waltman told MarketWatch.
He said he hears criticism that just giving money to people is not effective because recipients cannot be trusted to use it wisely, but he rejects that line of thinking.
GiveCrypto is not a registered charity, but has a non-profit fiscal sponsor, an arrangement that allows donors to claim a tax rebate for their donations.
Helping people without a bank
One of the group ‘s priorities is to help people without banks access basic financial services – especially women living in poverty.
Globally, there are about two billion people with cell phones, but no bank accounts, Armstrong explained when he launched GiveCrypto in 2018, citing data from the Bill and Melinda Gates Foundation.
These phones could be used to set up a cryptocurrency wallet, and with a donation of virtual currency, the user could send out money to buy goods or services, or hold a wallet on for potential investment returns.
GiveCrypto focuses on making donations to people living in places with broken financial systems, including Venezuela, where hyperinflation has rendered fiat money bills less worthless.
The group’s goal is to “raise money from crypto early holders and distribute payments to people around the world who are either living in poverty or going through a kind of economic crisis, ”According to Armstrong’s mission statement.
Trying out how to get cryptocurrency for people in need
“We have this new technology and we wanted to find out how to reduce it to help people,” Waltman said. That has been challenging.
GiveCrypto has tested a few different ways to get cryptocurrency into the hands of needy people.
One was a “donation center” similar to GoFundMe where people could sign up to become recipients and site visitors could choose to make a donation.
That didn’t work out well, Waltman said. “We learned the lesson that we were going to learn that it is very difficult to get people to make money from strangers on the internet,” he said.
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‘We have this new technology and we wanted to find out how to carry it to help people.’
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GiveCrypto has also experimented with small pilot programs aimed at people with specific financial challenges. One of them made nine live donations from domestic abuse in the U.S. $ 2,500 donations they spent on things like the first and last month’s rent on a new apartment for themselves and their children, Waltman said.
Digital money is useful in situations where abuse is controlling someone’s money, because it can be transferred in a “relatively covert” way, he said.
The charity also helped donate cryptocurrency to Rohingya refugees in Bangladesh through a local find 21 recipients, set up their phones to receive $ 10 a week in donations, and forced a vendor in a refugee camp to accept payment in cryptocurrency.
GiveCrypto’s new ambassador program uses an augmented global web app for phones, and the charity also employs ambassadors on TWTR Twitter,
Reddit, and Upwork, a freelancing platform. Ambassadors agree to find and monitor grant recipients in their communities and teach them how to use cryptocurrency.
Waltman says he hopes the new hiring effort will pay off by providing a steady stream of examples of how crypto donations are changing the lives of recipients. The more photos, videos, and stories that GiveCrypto can produce, the more donations they draw, Waltman said.
One piece of evidence he points out: GiveCrypto commissioned a study of just over 1,000 people living in poverty in Venezuela to measure the impact of cryptocurrency donations against money. After 15 weeks of donations, both groups reported “statistically significant” improvements in food security and psychological well-being, the study found.
Give Crypto a little over $ 350,000
GiveCrypto aims to help one million people every year. There is a long way to go.
Since its launch in 2018, GiveCrypto has donated just over $ 350,000 to 4,964 people, according to Waltman.
Armstrong’s first goal was to raise $ 10 million in donations, and he said when the charity launched it hoped to raise $ 1 billion in donations within 18 months.
He gave himself $ 1 million in 2018, the same year he signed The Giving Pledge, the campaign started by Warren Buffett and Bill and Melinda Gates to make billions publicly promise to take away half of their wealth either during their lifetime or in their wills.
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‘We have this new technology and we wanted to find out how to carry it to help people.’
”
GiveCrypto was given other big names in the crypto world at its launch, including Chris Larsen, co-founder and former CEO of the payment company Ripple; and Zooko Wilcox, CEO of Zcash. They both shook $ 1 million each.
In total, the charity raised about $ 4 million in donations just after Armstrong announced. These donations fell in value to less than $ 1 million about a year and a half ago as cryptocurrency values fell, Waltman said, but since then they have reverted to about $ 10 million in holdings total.
“Our belief is that we are just at the beginning of a big bullpen for crypto,” Waltman said.
If that happens, there could be a new round of newly wealthy crypto investors looking for ways to do a little good with their assets, or at least get a tax rebate by giving pass your non-profit.
‘Condescending approach’
Some in the charity world have called it “irresponsible” to give money to needy people who do not keep its value, but he denies that criticism.
“I have some sympathy for that,” said Waltman, “but I am also tempted by the changeable, and almost sensible approach that some people in this place bring to people in need. ”
Up and down crypto values affect recipients of GiveCrypto donations, of course. There have been some situations where the cryptocurrency acquired by a recipient has fallen sharply in value immediately after the donation, Waltman said.
But the opposite has also happened: a processing bug has delayed ETHUSD ethereum at some of the recipients,
donations by a few weeks while the cryptocurrency went up significantly in value. Recipients ended up getting three times what they expected, about $ 1,000 each.
Hiring GiveCrypto as new ambassadors comes as BTCUSD at bitcoin,
value has risen 1,000% over the past year, hitting a high of $ 61,519 on March 13th.
Meanwhile, U.S. Treasury Secretary Janet Yellen recently described bitcoin as a very inefficient form of money, and New York Attorney General Letitia James warned the public of “a real warning ”When investing in virtual currencies, partly because criminals use their money to shoot money and other crimes.
Giving cryptocurrency to people in need comes with a degree of risk, says Waltman – there is always a chance that people will cheat to get donations.
“We expect a certain percentage not to work in good faith,” he said.
But it is encouraging that when GiveCrypto finds the right way to donate crypto donations, the charity’s reach will quickly grow.