Introduction to Crypto for Good
As more people hold cryptocurrency means they have the ability to donate in Crypto
Crypto is on the rise and has become a viable currency to buy goods and services. Instead of ignoring crypto as an internet fad it's important we understand it, embrace it and leverage it for good.
Despite the bumps, crashes and doubts, crypto has become mainstream. The pandemic year (2020-2021) has seen the most dramatic rise of Crypto with big names like Elon Musk, Jack Dorsey and others investing and raising its profile and adoption. Coinbase, the largest cryptocurrency exchange went public in April, 2021 in a blockbuster direct listing, valuing the company at close to $100 billion. Elon Musk tweeted about Tesla’s plan to buy 1.5 Billion of Bitcoin and accept crypto payments for its car. Venmo, Robinhood and other popular trading apps now offer Crypto trading on their platforms. And finally we saw new ways of crypto being used online like with the rise of NFTs .
Crypto opens a whole new world for nonprofits to raise money. As more of the world’s population holds cryptocurrency means they have the ability to donate in Crypto. But before we jump into the mechanics of how, it's very important to understand the fundamentals.
What is Crypto: The Most Simplistic Explanation
Crypto stands for cryptocurrency which as in digital currency. It originated as a research paper called the “Bitcoin white paper” published by an anonymous person (or group) calling himself Satoshi Nakamoto. Coders online who found the paper fascinating wrote the code that brought the ideas from the paper to life as Bitcoin.
Most of the popular cryptocurrencies today including Ethereum are based on the ideas from this paper.
Most folks assume crypto stands for cryptocurrencies while it’s ok to think that the word Crypto itself stands for cryptography which is the math that keeps us safe online. Every time you shop at Amazon or check your email cryptography scrambles the communication between your browser and the website helping keep it safe from prying eyes
The reason I’m explaining this is because it’s important to understand at least a bit of the basics needed to keep your cryptocurrency safe. Working with cryptocurrencies involves using two keys, one private, one public. The public key is often called your crypto address and is shared freely while the private key is just that “private” and should be guarded as you would your online banking password.
If your private key (aka seedphrase) falls into the wrong hands then its highly likely that you have lost your cryptocurrency irrevocably.
For everyone new we highly recommend going with a trusted and registered crypto exchange like Coinbase instead of managing your own keys, since they manage all the complexity around keeping your crypto safe and compliant. Also most exchanges will provide you the govt. required paper work during tax time.
The most valuable and oldest cryptocurrency is Bitcoin (BTC). It is also often referred to as digital gold since it works better as a store of value than as a currency to pay for everyday things. Bitcoin is still widely used to donate or purchase large items. And there is work underway (Lighting Network) to make it easier to use Bitcoin to pay for smaller purchases like coffee.
The other popular crypto is Ethereum (ETH) which can also be used to donate and buy things. Ethereum also supports something called smart contracts since it contains its own programming language. Smart contracts are too advanced for those new to this space. However you should know a whole new space called DeFi (Distributed Finance) is being built using these smart contracts.
Outside of Ethereum and Bitcoin there are many other currencies like AlgoRand, Dogecoin, Monero, each with it’s own set of value propositions. The thing to remember is cryptos listed on exchanges like Coinbase are the only ones that have an easy way to convert into local currencies.
Coinbase is the largest and now publicly listed Cryptocurrency Exchange but there are others in various countries across the world. It’s best to go with exchanges that are properly regulated and listed with the govt in your country.
What are Wallets?
Wallet is term that you may have heard in context to Crypto. A wallet is a software app (or hardware device) that you would use to access and transfer your cryptocurrencies. Wallets are really important when you are holding the cryptocurrency yourself and not with an exchange. There are two types of wallets. Hardware wallets like ledger and software wallets like MetaMask. People often consider hardware wallets to be the safest way to hold cryptocurrency outside of a trusted exchange. Most folks would just keep their crypto on an exchange and use the app that exchange provides.
How to not get Hacked or Scammed?
Since the origin of Bitcoin is 2008 there have been many scandals. People have lost a lot of cryptocurrency but over time lessons have been learn’t and today there are much safer and trustworthy options like Coinbase that can let you store and use your cryptocurrency safely. Several large companies use Coinbase in this manner to hold their crypto assets.
As an entity in the social good space governed by regulations its best to have an account on a trusted exchange as they are safe, regulated and compliant and its their job to deal with the complexity of protecting your cryptocurrency and making it easy for you to convert to local currency and use it.
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