Three ways in which they cryptocate, help in the fight against poverty

Cryptocurrencies often have a bad reputation due to their use for illegal online purchases, large value fluctuations and numerous recent hacker attacks. However, a few days ago co-founder and CEO Coinbase, Brian Armstrong appealed to the cryptocurrency community to use its resources for a noble purpose: he launched a new charitable organization, GiveCrypto.org. Its task will be to send virtual money to those in need, mainly from poorer parts of the world.

A storm of doubt
However, most people approach this idea with great caution and skepticism. One of the biggest objections raises the question of whether cryptocurrencies can be used for a more idealized and philanthropic purpose than what they were invented for, ie enabling peer-to-peer Internet payments without the need to use financial institutions. The next concerns are much more prosaic, and concern restrictions related to illiteracy, lack of electricity and lack of connectivity in developing countries, which makes the digital currency useless there. For example, in Africa, 65% of people do not have access to the Internet.

However, after a deeper reflection, we can realize that cryptocurrencies can take on a unique position in changing the way we have dealt so far with global poverty. Below are three solutions that can actually work.

Help without corruption
The digital currency can be sent and immediately used by people who find themselves in crisis situations. Corruption (on the part of governments, service providers and even non-profit organizations) makes it impossible to reach the total amount of aid provided to final recipients. GiveCrypto can provide people, even in the most unstable market or political situation, with direct acquisition of resources while avoiding the need to use intermediaries.

The additional infrastructure and the method of transferring coins to the right people and the place where they are exchanged in exchange for goods must be further developed. However, such programs have already been launched by some charities. In 2017, the World Food Program supported over 10,000 Syrian refugees using digital currency coupons, successfully donating USD 1.4 million to US dollars and eliminating corruption.

Banking and financial identification
A virtual currency can be used to provide a financial identity for 40% of adults worldwide who do not yet have bank accounts, and the vast majority of them live in developing countries. These people, for the main barriers explaining the lack of own account, provide additional fees, a large distance from banks, lack of documents and insufficient funds to legitize and maintain an account.

Therefore, integration and financial identification is so important to reduce poverty, because it allows managing own savings and easier access to credit and loans. Companies like Coins based in the Philippines and BanQu in the United States use blockchain technology to help their clients without a bank account. They create alternative financial solutions in an efficient and simple way. GiveCrypto can accelerate these efforts, creating a greater flow of capital.

Saving money in an unstable environment
For many people in emerging economies, managing long-term savings is a major challenge. It is caused by high inflation, corruption at the state level and in extreme cases by the risk of taking over assets, especially if they are stored in local financial institutions. Cryptocurrencies help avoid this type of asset placement, and although their value is characterized by instability, they can still offer a logical alternative to people in hyperinflationary countries such as Venezuela, while more stable currencies are difficult to obtain.

An undoubted problem, however, is the fact that currently few people want to use cryptocurrencies as a means of payment. Therefore, projects such as stablecoins are trying to create a much more stable cryptocurrency, to give people a real chance to increase their savings without too much risk.

What would have to happen for cryptocurrencies to really reduce world poverty?
The crypto-philanthropic world is evolving rapidly, but there are still a number of missing elements that should be addressed to recipients before Armstrong's implementation is implemented on a large scale. The most important seems to be providing tools for conducting cryptocurrency transactions in less developed countries with limited strength of access to the Internet and computers. Companies like CoinText.io are already working on a technology that will allow BCH (and in the future other tokens) to be sent via text messages. An important task is also to explain the advantages and practical application of cryptocurrencies to their users, for example through online videos in local languages.

Good view of the future
Surrounded by the enthusiasts of blockchain technology, new possibilities are constantly emerging in the field of philanthropy. Charity coins such as Clean Water Coin and CareBit were created to supply donations, and CryptoKitties launched a charitable Honu cat, whose auction helps endangered turtles. Blockchain in a wider application also has enormous potential to increase transparency in the non-profit sector.

So will GiveCrypto have a real impact on such numerous and complex social problems and contribute to the effective fight against poverty? With proper management and continuous innovation, it is not without a chance.