We now know that cryptocurrency and blockchain technology is a substantial fundraising game-changer, amongst many other business benefits.
When cryptocurrency first emerged, few could predict the commodity-like properties it would adopt. Early adopters were quick to mine and quick to sell, treating it like a gimmick to make a quick buck rather than the asset that it would become.
Some, having mined Bitcoin in the early years, replaced or wiped their hard drives considering the currency to be essentially worthless. Needless to say, in current conditions the unclaimed wealth is in the millions of dollars.
Bitcoin however is an extreme example that rather proves the rule. The right crypto, under the right conditions can become a high value commodity.
Its position in the market was unchallenged for 2 years allowing early adopters free reign to mine as much as they wanted. It’s only with interest from the early majority that crypto has become such a keen focus of businesses and individuals alike.
Thanks to Bitcoin’s high market value and the dominance of big business miners, other currencies have been given the opportunity to flourish. Cryptocurrencies like Litecoin are trading at over $200 each, making it and others like it a growing concern.
It also represents a lucrative source of equity release when needed, and thus a valuable income stream to charities.
Can charities buy and sell cryptocurrency?
Any cryptocurrency that you mine, or is given to you via donation, is yours to sell.
Because crypto mining is almost entirely unregulated – and outlawed in some countries because of it – trading in crypto should be done with great care.
Although it’s all but impossible to hack cryptocurrency, it’s not difficult to defraud someone, much like someone could in a traditional transaction using fiat currencies.
Despite the security provided by blockchain – which prevents anyone misappropriating your coins – if you freely hand over your crypto then the transaction will be approved by the network and that can be that.
As such it’s always a good idea to buy and sell crypto within a dedicated exchange or consortium.
A consortium lets you work collaboratively with other miners to mine and sell your crypto through a managed service that sees a fair distribution of profits for all members. It may mean you get a slightly smaller cut, but you also get none of the hassle of trading on your own.
A cryptocurrency exchange on the other hand works much like any other exchange. You can buy and sell cryptocurrency within an exchange for whatever the going rate is.
Rates fluctuate just like they do in any market so choosing the right time to sell can be a case of trial and error. Keeping an eye on the markets as you reach the time you want to sell will allow you to spot any trends.
Apps are available to help you monitor the currency markets and to buy and sell crypto.
Can charities pay for goods and services with cryptocurrency?
Paying for goods or services using cryptocurrency is no different than paying by any other means – providing the individual or organisation you’re buying from accepts crypto, you can pay with crypto.
Be aware, the value of your crypto coins can fluctuate. If your currency of choice slumps in value an item that cost a single coin one week can cost two the next.
Much like selling crypto you need to keep an eye on your currency’s performance.
Also consider that because of the nature of cryptocurrency, transactions may take some time to go through as the network has to review and approve every transaction. Theoretically it should only take seconds – much like a standard bank transaction – but it can take a few minutes.
A lot of organisations find it easier to just sell their crypto and pay in the required fiat currency but it’s entirely up to you.