The application of blockchain in the field of charity: "digital charity"

Philanthropy lacks exposure and transparency, and accountability issues are unclear ization and limited channels for accepting donations, it is often difficult to succeed. Digital charity (using blockchain technology to promote charitable donations) provides new solutions. With decentralized transactions, charities can receive donations and raise funds more efficiently.

Basic knowledge of blockchain

Blockchain The high transparency and high security of the system have brought many benefits to all walks of life. While blockchain has been around since before Bitcoin, these fundamental qualities have only recently begun to be widely used.

Almost all digital economic networks are based on blockchain technology. It was first proposed by Satoshi Nakamoto when he was studying the digital ledger of Bitcoin, but its successful application in other fields proves that the blockchain is not only in digital currency, but also in many other related fields. It is also widely applicable in the communication and data sharing industries.

The Bitcoin blockchain network operates like a distributed ledger technology (DLT), which is maintained by a huge network of nodes and protected by cryptography. Such a system allows borderless peer-to-peer transactions to occur in a "trustless" environment. "Trust-free" means that users do not need to establish contact and trust in advance, because all nodes are required to operate according to a predefined rule system.

The Bitcoin ledger does not rely on a single data center or server in these transactions. Instead, blockchain technology replicates it through a large number of nodes and distributes it around the world. spread within. This means that every transaction determination or data change requires all participants to update the data (they must reach a consensus for data changes to be confirmed).

These advantages of blockchain are also used in many charities.

Donate digital currency

The globalization of digital currency still has a way to go, The popularity of digital charity will take longer. Currently, a small and growing number of charities already accept digital currencies as a form of donation.

Donors who intend to use digital currency may only be limited to institutions that support digital currency or donate large amounts of digital currency to their favorite institutions to encourage them to accept digital donations.

Before a charity receives digital currency donations, it needs to have a transparent and efficient process system to manage and distribute these donations. Understanding the fundamentals of digital currency and blockchain – and knowing how digital currency donations can be converted into fiat currency – is important to developing specific implementation plans.

The potential value of digital charity

Digital charity is very important to charities and donors It has some significant advantages:

• Complete transparency:Every digital currency transaction is traceable through blockchain data of. Such a high degree of transparency and openness can encourage donors to donate, while also greatly improving the credibility of charities.
• Globalization and decentralization: Most blockchain networks are highly decentralized and they cannot rely solely on a centralized government and The organization operates the charity, so donations go directly from the donor to the charity. The decentralized nature of blockchain makes global transactions simple and reliable.
• Digital Agreement: Blockchain makes the sharing and storage of electronic data easier. It can also be used to ensure that important documents and contracts cannot be Feel free to tamper with it.
• Reduced expenses: Blockchain technology has great potential to simplify the management of charities, automate operational processes and reduce intermediary fees.
• Reducing taxes: Take an American donor as an example. If he donates a donation in Bitcoin, the charity can get the full amount. to this amount (because no tax is required). In addition, donors can also apply for high tax deductions from government agencies.

Limitations

In addition to potential advantages, we There are also certain concerns about digital charity:

• Value fluctuation:Except for stable coins, most digital currencies are subject to rapid changes in the market. Typically results in larger value fluctuations.
• Security: If the private key of the donation is lost, the donation will also be lost. Likewise, if the private key is not stored properly, someone can gain access to the private key and steal donations.
• Public perception: Most people find blockchain technology obscure and difficult to understand, and many people who intend to donate lack sufficient basic understanding of digital currencies. However, they do not believe in this system and will not use blockchain technology to make donations.

Real-life cases

In recent years, many charities have begun to gradually accept digital charity. In 2017, Fidelity Charitable, a global charity organization, has accepted $69 million worth of digital currency donations. In the same year, an unnamed donor donated a total of $55 million worth of Bitcoin to multiple charities around the world through the Pineapple Fund.

Conclusion

Digital charity is still the same in terms of donation, reception and distribution. It is a brand new attempt, but with the rapid growth and widespread spread of blockchain technology, charities and donors are gradually embracing this new technology to help people in need. If the public continues to use digital currencies to donate, then charities would only be wise to consolidate their operational systems in this area.