Throughout history, people have tried to end poverty. Some have used the might of government power to institute socialist and communist policies to distribute wealth. Others have developed farming and energy technology in under-developed regions to help communities to become self-sustaining. Still others have tried various charitable means, and yet poverty still exists. Coinbase is trying something new: a cryptocurrency-based charity with a goal of raising $1 billion over the next two years.
GiveCrypto is the pet project of Coinbase CEO, Brian Armstrong. The San Francisco-based nonprofit launched on June 27, 2018 and will distribute cryptocurrency to impoverished people, with a goal of driving the real-world utility of cryptocurrency. The platform has a three-step process: users donate crypto, then GiveCrypto distributes it in the form of direct cash transfers to people who are in need, and the recipients then spend the funds in their local economies.
Being based in San Francisco no doubt has contributed to this idea. The city has the highest poverty rate in the Bay Area, with an estimated 12% of the population living below the poverty line as of 2015, with an estimated 15.3% of the State of California also below the poverty line, despite its generous social welfare programs.
Currently, the GiveCrypto website accepts donations in Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Ripple (XRP) and ZCash (ZEC). The funds are then processed through the project’s fiscal sponsor, The Pledge Group Foundation, a 501c3 nonprofit organization. As such, donations are tax-deductable as long as the donors provide valid contact information. The project has been seeded with several million dollars in donations. Top donors include Brian Armstrong (CEO, Coinbase), Chris Larsen (Executive Chairman, Ripple) and Zooko Wilcox (CEO, the Zcash Company) at $1 million per donor. Other donors are listed on the website as giving $100k, $25k and $10k in crypto to the project.
At present, over 1.7 billion adults around the world do not have access to banks or other basic financial services, according to The World Bank. These unbanked people would be perfect candidates for the decentralized payment system that crypto provides. Armstrong wrote about the benefits of cryptocurrencies to impoverished people back in January, meaning that he has been thinking about, and perhaps developing this project for some time, with a goal of accelerating a global transition to an open financial system as per the Coinbase mission statement.
At that time, Armstrong presented the idea of developing a “non-profit that distributes small amounts of cryptocurrency to people in developing countries.” His belief that this injection of digital capital into such communities would produce economic growth, while achieving the parallel goal of bringing the use of cryptocurrencies as a payment solution to the mainstream.
There are numerous cryptocurrency billionaires, and Armstrong believes that these people who were thoughtful and lucky enough to get into crypto early should consider philanthropy. Perhaps the most famous Bitcoin philanthropy project was the Pineapple Fund. The project was set to donate $86 million in Bitcoin to charity, and came from the wealth of a single donor. Imagine if other donors get on board with GiveCrypto and voluntarily agree to change the world, one coin at a time.