Bitcoin, the experimental online currency, is sparking intrigue and questions among business and technology leaders—but does it have a future in the nonprofit world?
A few nonprofits are already accepting donations in bitcoins, says Peter Vessenes, chief executive of the Bitcoin Foundation, an organization that is developing the currency approach. But now he says he wants to figure out how the idea can benefit nonprofits and donors.
If nonprofits want to set up the currency, they simply set up an online address, known as a “wallet,” to accept the bitcoins from donors. The idea of the coin is to find a secure way to make financial transactions without getting a bank or other financial institution involved.
But finding retailers, suppliers, and others that accept bitcoins as payment can be tricky, Mr. Vessenes acknowledges.
Still, some nonprofits have tried the currency. In 2011, the Electronic Frontier Foundation became one of the first to accept donations in Bitcoins. The digital civil-liberties organization raised 3,500 bitcoins, which at the time was worth roughly $20,000. Later that year, the foundation decided to stop accepting the currency and donated all but 700 of its coins to other groups and individuals.
It said it was concerned about complex legal issues associated with a new currency system and didn't want donors to think its use of Bitcoins was an endorsement.
Two years later, its remaining 700 bitcoins are worth nearly $100,000.
In this episode of Social Good, Mr. Vessenes discusses bitcoin’s history and potential applications for charitable giving.