Charity Begins on the Blockchain

California’s Golden 1 Center is where the NBA’s Sacramento Kings hold court. Starting last week, the 17,600-seat arena also became home to another competitive endeavor: mining for cryptocurrencies.

The first professional sports team to accept bitcoin (BTC) the Kings team is now also mining crypto in a data center deep within the arena to fund a scholarship program for local charities. Powered by rigs from local company MiningStore, the Kings’ MiningForGood initiative has pledged to use the proceeds to fund a scholarship program for Sacramento-based charities.

There are hundreds of pilot blockchain projects focused on social good, including growing numbers of corporate social responsibility projects.

“Opportunity begins when technology allows the world to find innovative solutions to complex problems,” Kings owner and chairman Vivek Ranadivé said in a statement.

An Old Idea for a New Currency

Using cryptocurrency for charitable purposes dates back to bitcoin’s early days, when there were limited ways to “spend” virtual currencies. It also sparked some of the first experimental use cases for financial giants like Fidelity, whose charitable foundation received $69 million worth of cryptocurrency donations last year.

But as adoption and public interest in blockchain has grown, so has the interest of both philanthropic organizations and donors in the blockchain space. In late June, Coinbase CEO Brian Armstrong launched GiveCrypto.org, a charitable effort that plans to distribute cryptocurrency directly to as many as 1 billion people in need. Sparked by Armstrong’s personal donation of $1 million, the nonprofit already has raised $3.5 million as it moves toward an initial goal of $10 million.

“The reputation of the crypto community has been dominated by images of ‘bros in Lambos,’ whose antics get a lot of attention, Armstrong wrote. “This doesn’t represent the best of our community. Most people I respect and know in the crypto ecosystem believe we have a responsibility to help this technology reach a much wider audience.”

Decentralizing Donations

All told, there were more than $200 million in cryptocurrency donations to charity in 2017, according to Paul Lamb, principal of Man on a Mission Consulting, which focuses on working with nonprofits on blockchain and cryptocurrency initiatives. “The cryptocurrency market is just finding its feet,” Lamb tells ThirtyK. “If and when it does, there may be massive new revenue streams available to charities.”

Those cryptocurrency donations are reaching a broader range of charitable causes. In 2014, BitGive became the first cryptocurrency-based charity to receive nonprofit status in the U.S. It has partnered with seven NGOs and nonprofits, including Save the Children and the Water Project, and notes that the low transaction fees facilitated by cryptocurrency — less than 1 percent of giving — helped more donations get to the people who need them. Other organizations, like BitHope, combine cryptocurrency with the GoFundMe model, allowing users to scroll through a broad range of campaigns and choose the ones where they’d like to donate cryptos. In the Washington, D.C., area, there’s even Breadcoin, which capitalizes on the popularity of bitcoin to sell real-world “tokens” that the homeless and nonprofits can exchange for food at participating restaurants and food trucks.