During a crisis, cryptocurrency donations increase speed and global reach.
As recently observed during the earthquake relief operations in Turkey and Syria, cryptocurrencies are proven helpful in permitting quick and unrestricted donations during catastrophes.
The blockchain analytics company Chainalysis calculates that approximately $5.9 million in cryptocurrency donations have been made to fund relief efforts in the region after deadly earthquakes struck regions of Turkey and Syria in February.
The Turkish Red Crescent, Save the Children, Project Hope, and the Earthquake Humanitarian Assistance campaign of the Turkish Ministry of Interior have all benefited from cryptocurrency donations. A number of cryptocurrency exchanges, including Binance, Bitfinex, OKX, and KuCoin, have contributed more than $9 million to help the local victims.
In order to discover and track flows to bitcoin services, Chainalysis’s director of research Kim Grauer stated the company combines human intelligence obtained by its experts with proprietary heuristics. This comprises charities that take donations and con artists who have attempted to steal money from unwary donors.
For immediate financial support in times of crisis, Grauer thinks that the speed of transactions and the worldwide nature of bitcoin transactions are important:
“Cryptocurrency is a technology that is great for raising money and delivering it to where it is needed most rapidly because it is cross-border, immediate, and liquid.”
Another compelling reason for the usefulness of cryptocurrencies in facilitating donations and relief after disasters and big emergencies, according to Grauer, is the capacity to precisely monitor blockchain data:
“The openness of blockchains is a unique benefit to cryptocurrencies, allowing opportunity to assistance organisations to track donations and for law enforcement authorities to identify and trace illegal schemes aiming to profit in times of crisis,” according to the report.
This has persisted throughout the organization’s efforts to aid earthquake victims in Turkey and Syria. Roupell lists the advantages of cryptocurrency-based donations over fiat-based donations.
Crypto has given Save the Children access to a new and expanding supporter base because the vast majority of its cryptocurrency donors are first-time contributors.
Roupell claims that recurring donating is also enabled by blockchain technology. A number of Ethereum donations were made to Save the Children in 2021 as a result of the sale of NFTs, some of which were used to code future donations using the smart contract capabilities of particular NFTs.
In addition, Roupell points out that giving cryptocurrencies to charities in the US is tax-deductible, which has increased donations towards the conclusion of the fiscal year. She also points out that average cryptocurrency donations are far higher than average fiat donations.
Despite pointing out benefits, Roupell noted a drawback: most bitcoin donors are anonymous, making it unable to express gratitude for their donations.
According to Roupell, humanitarian groups will play an increasingly important role in integrating and scaling access at the grassroots level as blockchain-based solutions support aid activities globally.
Bitcoin is a terrific way to make donations, but the peer-to-peer electronic cash technology at its core is genuinely transformative for economic inclusion.
The Giving Block, a cryptocurrency donation platform, accepts a number of cryptocurrencies that the charity supports, but according to Roupell, the group “does not endorse, promote, or pass judgement” on any particular tokens. It also accepts equities and fiat money from around the world, with a focus on raising money quickly to support international humanitarian efforts.