Blockchain is a relatively new technology that is now building trust and its advantages are becoming clear to a lot of investors and businesses. Blockchain applications can be seen in pretty much every business sector, and the way it works changes accordingly.
Actually, Blockchain is so versatile that it can be also used for non-business purposes, such as charities, with a new model and the possibility to accept cryptocurrency payments.
For those who still don’t know, cryptocurrencies are digital currencies not linked to a bank or a government. Transactions are recorded through Blockchain technology, a network of users who own and maintain a copy of the ledger, so it does not need any authority to control and validate it.
Blockchain increases transparency
This is the first real advantage of Blockchain for charities: the fact that there is no central authority means that any transaction is based on a peer to peer system. In this way, charities can track the origin of the donations they receive, in total compliance with the law.
From a donor’s point of view, Blockchain will make the donation process more transparent, as donors will be able to see where their money ends up, and how it is spent.
New kinds of donations
Thanks to Blockchain, donations could include not only money (either fiat or crypto), but also any kind of asset, tangible and intangible: nearly all assets can be tokenised, and people can donate tokens (i.e.: parts) of those assets.
With smart contracts in place, asset donation could become as simple as money donations, and charities could benefit from diversifying their basket.
Restore charities’ reputation
In last years, a few scandals hit charitable associations in different ways. Oxfam and Save the Children, for example, have witnessed a drop of donations after the scandals they were involved in, that forced them to cut jobs and initiatives. There are also concerns about CEOs income.
As a direct consequence of this donation drop, some charities often fail to provide adequate aid, and this contributes to the loss of trust.
As of now, charities need to rebuild their reputation, and Blockchain could help with that.
With a radical transparency policy in place that only this technology is able to enforce, it would be possible to prove to donors that their contribution is important and it ends up in good hands.
The example of Binance
Binance Charity Foundation launched its blockchain-based donation platform a few months ago.
Donations made via BCF are transparent in all ways possible, giving to donors all the financial information they want and making every donation fully traceable.
Let’s not forget that all the transactions recorded on a blockchain are immutable, so they can’t be manipulated. It works as a guarantee that the money won’t disappear or be diverted elsewhere. If we consider that Blockchain requires less manual action than traditional donation processing, a bigger slice of the funds donated can reach the intended recipient.
Thanks to the contribution of dozens of investors, Binance managed to issue a stablecoin named Pink Care Token and launch the Period Poverty campaign, which is helping over one million women in third world countries to get better feminine care.
Beyond the reputation of charities, the mission of Binance is making a difference to billions of people around the world, and if donating on a blockchain can help with that, we are more than happy.