A new report by Nonprofit Tech for Good shows that cryptocurrency is rapidly gaining popularity as a way to donate money.
The 2019 Global NGO Technical Report released last month surveyed 5,721 NGOs and charities in 160 countries.
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The report found that the number of organizations receiving cryptocurrency donations has increased by 100% since last year's research.
But the exact number is still small. Although the number of charities receiving cryptocurrency donations in North America, Europe, and Australia has doubled, cryptocurrencies still account for only 2% of total donations.
Africa has the largest number of NGOs receiving cryptocurrency donations, accounting for 5% of the total amount, followed by Asia, accounting for 4%, followed by Latin America, which accounts for 1%.
The report shows that NGOs around the world are recognizing that cryptocurrencies pose significant opportunities and challenges for their industry. But they know very little about how this technology works and how to help local recipients.
It is worth noting that the survey results show that the vast majority of NGOs still do not understand the blockchain technology.
Only 12.5% of respondents claimed to understand how blockchain technology works. African NGOs scored the highest at 17%, with Australian and North American charities having the lowest scores, with only 8% and 9% of organizations claiming a good understanding of blockchain technology.
The US-based non-profit organization Human Rights Foundation is seeking to work with password educators and developers (such as Jimmy Song) to educate NGO staff to address this issue.
“They want me to teach more people some basics. For example, how to use wallets, how to exchange bitcoins, such as songs to send bitcoin to each other, etc.”
Bitcoin enthusiasts like Song believe that cryptocurrencies play an important role in liberating the public, because the funds that control the people are often used as a means of oppression, just like in Venezuela. He believes that especially Bitcoin can promote freedom because it cannot be taken away.
Blockchain and cryptocurrencies can also increase the transparency and trust of the trillion-dollar philanthropy industry, which has the potential to manage charitable activities.
Another possibility is to achieve complete transparency in donations and make it easier to use aid funds where they are most needed.
Impactio is a non-governmental organization's project planning and funding platform, which is a typical example. This is a recent joint venture between the World Wildlife Fund and blockchain development company ConsenSys to increase transparency in the industry and ensure that outstanding projects are exposed.
But as cryptocurrencies become a new category of donated assets, there are some challenges. Regulatory regulations are still evolving, such as managing anonymous cryptocurrency donations and using them to support terrorist organizations.
If NGOs recognize these opportunities and address these challenges, cryptocurrencies will play an important role in future humanitarian assistance.