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Coinbase CEO Charity urges ‘ambassadors’ to help donate cryptocurrencies: ‘It’s really hard to get people to give money to strangers on the internet’

Crypto exchange Coinbase will require investors to buy into the business when public this week.

But Coinbase CEO Brian Armstrong has another suggestion for those looking to dive into the world of cryptocurrencies.

Armstrong’s charity, GiveCrypto.org, is recruiting “ambassadors” to find poor people who can benefit from crypto donations.

The ambassador program marks a new chapter for the charity that Armstrong, whose current net worth is estimated at around $ 6.5 billion, founded in 2018.

GiveCrypto CEO Joe Waltman told MarketWatch: “We are very disciples of the direct cash transfer philosophy.

He says he has heard criticism that simply handing over money to people is ineffective because the receiver is not always reliable to use it wisely, but he disproves the idea. there.

GiveCrypto is not a registered charity, but it does have a nonprofit financial sponsor, an agreement that allows sponsors to claim tax deductions for their contributions.

Help people who don’t have banks

One of the organization’s priorities is to provide access to basic financial services for people without banks – especially women living in poverty.

Globally, an estimated two billion people have cell phones but don’t have a bank account, Armstrong explained when he launched GiveCrypto in 2018, citing data from the Bill and Melinda Gates Foundation.

Those phones can be used to set up a crypto wallet and with a donation of virtual currency users can withdraw their money to buy goods or services or hold it for a potential investment return. .

GiveCrypto focuses on donations to people living in places with broken financial systems, including Venezuela, where hyperinflation has left smaller fiat currency bills worthless.

The organization’s goal is to “raise funds from early crypto holders and distribute payments to people around the world who are living in poverty or experiencing some sort of economic crisis, “Armstrong said as he launched his charity.

Test how to get cryptocurrency into the hands of those in need

“We have this new technology and we want to figure out how to use it to help people,” Waltman said. That has proven challenging.

GiveCrypto has experimented with a number of different methods of putting cryptocurrencies in the hands of the poor.

One is a “donation marketplace” similar to GoFundMe, where people can sign up to become recipients and visitors to the site can choose to donate for them.

That doesn’t work very well, Waltman says. “We learned the predictable lesson that it’s really hard to get people to give money to strangers online,” he said.

‘We have this new technology at our disposal and we want to find a way to leverage it to help people.’

– GiveCrypto CEO Joe Waltman

GiveCrypto has also experimented with small pilot programs targeting people who are experiencing unique financial challenges. Waltman said one person gave nine family abuse survivors $ 2,500 that they spent on things like new and last month’s rent for themselves and their children.

“Cryptocurrencies are very useful in situations where an abuser is controlling someone’s money, as it can be transferred in a” relatively secretive “way, he said.

Charities also facilitate cryptocurrency donations Rohingya Refugees in Bangladesh through a local who found 21 recipients, set up their phones to receive $ 10 a week donations and persuaded a supplier in the refugee camp to accept cryptocurrency payments.

GiveCrypto’s new ambassador program uses a global web app optimized for phones, and the charity will also recruit ambassadors on Twitter
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Reddit and Upwork, a freelance platform. Ambassadors agree to find and test donor recipients in their community and teach them how to use cryptocurrencies.

Waltman said he hopes the new hiring effort will pay off by providing a steady set of examples of how crypto donations change the lives of recipients. Waltman said the more photos, videos and stories GiveCrypto can create, the more sponsors they can attract.

One proof he points out: GiveCrypto has commissioned a study of just over 1,000 people living in poverty in Venezuela to measure the impact of cryptocurrency donations versus cash. After 15 weeks of donations, both groups reported “statistically significant” improvements in food security and psychological health, the study found.

Give Crypto has distributed just over $ 350,000

GiveCrypto’s goal is ultimately to help a million people a year. There is a long way to go.

Since its launch in 2018, GiveCrypto has distributed just over $ 350,000 to 4,964 people, according to Waltman.

Armstrong’s original goal was to raise $ 10 million, and he said when the charity launched he hoped to raise $ 1 billion in 18 months. Meanwhile, before the stock market launch, Coinbase said Preliminary sales for the first quarter reached $ 1 billion.

Armstrong donated $ 1 million to GiveCrypto himself in 2018, the same year he signed The Giving Pledge, a campaign started by Warren Buffett and Bill and Melinda Gates to get billionaires to publicly promise to give away half of his fortune. their whole life or in their lifetime. testament.

‘We have this new technology at our disposal and we want to find a way to leverage it to help people.’

– Joe Waltman, CEO of GiveCrypto.org

Other big names in the crypto world donated to GiveCrypto when it launched, including Chris Larsen, co-founder and former CEO of payments company Ripple; and Zooko Wilcox, CEO of Zcash. They both make $ 1 million each.

In total, the charity raised about $ 4 million in donations right after Armstrong announced it. Waltman said those donations fell in value to less than $ 1 million around a year and a half before the value of cryptocurrencies fell, Waltman said, but have since risen back up to around $ 10 million in total. number of shares held.

“Our belief is that we have just started a massive bull run on cryptocurrencies,” said Waltman.

If that happens, there will likely be a large number of newly affluent crypto investors looking to make their fortune, or at least, tax deductible by donating to an institution. Nonprofit.

‘Condition approach’

Some in the philanthropic world have told Waltman that it is “irresponsible” to give the destitute a fortune that may not hold its value, but he dismisses that criticism.

“I have some sympathy for that,” said Waltman, “but I’m also a little annoyed by the paternalistic and quasi-demeaning approach that some of the people in this space would apply to people with need bridge.”

Of course, the rise and fall of the cryptocurrency’s value will affect the recipient of GiveCrypto’s contributions. Waltman said there have been a number of instances where the cryptocurrency received a significant decrease in value immediately following a donation.

But the opposite also happened: a processing error delayed the ethereum of some recipients
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donations over a few weeks while the cryptocurrency skyrocketed in value. The recipient ended up getting three times what they expected, about $ 1,000 each.

The recruitment of a new GiveCrypto ambassador is like bitcoin
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value has increased 1,000% in the past year, fight on $ 61,519 on March 13. It rose to a new record of $ 63, 158 on April 13. before the Coinbase IPO.

Meanwhile, US Treasury Secretary Janet Yellen recently called bitcoin something highly speculative. “Inefficient” form of currency, and New York Attorney General Letitia James has warned the public to “exercise extreme caution” when investing in cryptocurrencies, in part because criminals use them for money laundering and other crimes.

Donating cryptocurrencies to people in need comes with certain risks – there’s always the possibility that people commit fraud in order to receive donations, Waltman said.

“We expect a certain percentage of us not to act in good faith,” he said.

But he is confident that once GiveCrypto finds the right way to donate cryptocurrencies, the charity’s reach will rapidly grow.

This story was originally published on March 17, 2021.



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