Organizational Fund Raising Using Internet Smart Money

Charitable organizations owe it to their stakeholders to start learning about Internet Smart Money.

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Introduction

In one of his interviews or public appearances, @ned referred to the steem rewards pool as “magic Internet money.” More recently, others (Maybe @hilarski? ) have suggested referring to cryptocurrency as “smart money,” in order to make the concept accessible to a less technical community. In keeping with that goal, for this essay, I’m going to borrow from both expressions and refer to cryptocurrency and block chain as, “Internet Smart Money.” One reason that I’m so excited about Internet Smart Money is its potential to help the global poor. Merely by existing, Internet Smart Money creates the potential for issuing credit to the global unbanked, and to transfer value across borders without exorbitant fees. To understand why this is important, I recommend the TED talk, Dilip Ratha: The hidden force in global economics: sending money home.

In this essay, I’m going to delve further into a potential use of Internet Smart Money by charitable organizations as a tool to alleviate poverty. I will propose a method of funding charitable causes using existing technologies, and I will map it to a specific real world example.

Example: Charitable Giving From a Congregation in West Chester, Pennsylvania to one in Honduras.

[Image: Girl from Honduras, Credit: Pixabay.com, License: CC0, Public Domain]

One of the ways that the church I attend, Westminster Presbyterian Church, endeavors to help people in difficult circumstances is by a youth to youth partnership with the Presbytery of Honduras. Our youth group travels regularly from America to Honduras and helps with projects like building a retreat center or establishing infrastructure for clean water. Similarly, the Honduran youth have visited America and helped with anti-poverty initiatives in the city of Philadelphia.

In upcoming sections, I will outline an approach that any charitable organization can use to raise funds using Internet Smart Money, then I will drill down to reveal how this youth to youth partnership could do the same.

A Multi-Pronged Approach

Starting with bitcoin in 2009, the traditional way for harvesting Internet Smart Money makes use of a concept called “mining.” A computer solves a difficult problem and gets rewarded for the time and electricity that it uses. Since then, a large number of alternative forms of Internet Smart Money have emerged, many of which can be mined by a computer. Beginning last year, steemit.com introduced a new dynamic, where people can “mine” Internet Smart Money by creating or voting on social media items (For example, this essay is being published on steemit.com. Rewards will probably be low, however, because of a recent and temporary technical change, so if you're reading this article don't use the size of its payout as an indicator of what's possible).

This proposal will enable organizations to use both harvesting methods.

Mining by Computing

For harvesting Internet Smart Money by computation, I am recommending the use of the NiceHash mining software, which can be downloaded from nicehash.com. I have been using this software for personal use for over a year. Although some versions suffer from the occasional bug, I have come to trust that overall it is safe, reliable, and most importantly: easy. It looks like this when it is running:

My equipment is aging, but I also have this program running on a desktop, where it is earning about twice as much per day. Getting $0.07 per day on the laptop or even $0.15 per day on the desktop isn’t very much, but newer computers would get more, and what if 100 donors all run it for a year? Those funds would accumulate. ($.15 * 100 * 365.25 = $5478.75)

Mining Through Social Media

For harvesting Internet Smart Money using social media, I recommend using the steemit.com platform. This platform enables a user to earn rewards for posting content to social media and for voting on popular content. It is a stake weighted platform, where stake is earned by contributing content and votes to the platform or by spending money to buy the token (steem) that it uses to pay its rewards. Popularity, therefore, is determined as a function of the number of votes, weighted by the investments that each voter has made in the platform.

For example, when I post this article through steemit.com, it may collect 20 votes from so-called “minnows,” people who have not invested much, and 1 vote by a “whale,” who has invested a great deal of time, computing resources, or money in the platform. The presumption is that higher stake voters have more skin in the game, so they will tend to vote for content that makes the platform healthier. Therefore, that single "whale" vote may carry more influence than all 20 of the "minnow" votes.

Contributors to a charitable organization can take advantage of this stake weighting by buying the steem token to make their votes more influential. There are several nice aspects that come with this ability:

1. Assuming that the steem token doesn’t lose its entire value, the charitable investors can always get a portion of their investment back (over a so-called "power-down" period of 91 days). The example of fundraising for a high school marching band comes to mind, where parents may want to buy steem for four years, then sell it when their child graduates.
2. The steem token is (in my opinion) quite likely to gain in value, so volunteers may earn income while contributing. (Note: This is not! investment advice.)
3. Donors can earn so-called “curation rewards,” which provides another avenue for volunteers to be rewarded for contributing.

In this proposal, I will imagine how the Youth to Youth Partnership could increase its services through the use of the NiceHash miner and the steemit.com platform. So here's how it might work.

How It Might Work – Generally

[Image Credit: Pixabay.com, License: CC0, Public Domain]

Let’s imagine that we have a charitable organization and we want to gain revenue using Internet Smart Money. Here’s how it might work:

• Step 1: Charitable organization creates a bitcoin wallet.
• Step 2: Charitable organization uses the bitcoin wallet to create a receiving address.
  ### These steps might sound intimidating, but they’re really not very difficult.
• Step 3: Charitable organization goes to steemit.com and creates a social media account.
  ### This is on the order of difficulty of creating a facebook account. It is vital, however, for the organization to take careful care of its cryptographic passwords, both to avoid losing them, and to prevent the wrong people from gaining access to them.
• Step 4: Charitable organization publishes instructions telling donors how to download the miner from nicehash.com and configure it with their bitcoin receiving address from Step 2.
• Step 5: Charitable organization publishes instructions telling donors how to sign up for steemit.com and contribute funds to raise their voting stake.
• Step 6: Donors install and configure nicehash.com miner and begin sending contributions.
  ### Donors should be notified that this will consume electricity. Based on my experience, the increase will probably not be perceptible on their monthly bill, though. Donors should also be notified that in places where the cost of electricity is high, the payout is probably lower than the cost of electricity. However, there's something to be said for being able to donate on autopilot, with virtually no observable cost.
• Step 7: Volunteers sign up for steemit.com and fund their wallets in order to raise their voting stakes.
• Step 8: The organization begins blogging on steemit.com about its charitable activities and asks its volunteers to vote for its posts.
• Step 9: Volunteers vote for posts that they consider to be informative, entertaining, or otherwise valuable.
• Step 10: Bitcoin from nicehash.com can be converted to traditional currency using any of the regulated exchanges, or it can be used to exchange for goods and services from OpenBazaar.
• Step 11: Tokens earned from steemit.com can be converted to bitcoin, and liquidated in the same fashion as above, or they can be used to exchange for goods and services from PeerHub.
• Finally, it should be noted that most organizations are probably unable to self-fund enough of a stake to consistently direct substantial payouts to their own blog posts, so blog posts would need to be interesting enough to collect votes from the wider steemit.com community. As stakeholders in steemit, the organization would also be able to vote for content by others that is consistent with their own missions.

How It Might Work – Example

Applying these steps to the Presbyterian Youth to Youth Partnership, from above, it might look like this:

• Step 1: Presbytery of Honduras establishes a bitcoin wallet
• Step 2: Presbytery of Honduras uses the wallet to create a receive address.
• Step 3: Presbytery of Honduras creates a steemit account.
• Step 4: The Youth to Youth Partnership, from Honduras and the United States, publishes instructions in English and Spanish enabling volunteers to download the NiceHash miner and configure it to send to the receive address in Step 2.
• Step 5: The Youth to Youth Partnership, from Honduras and the United States, publishes instructions in English and Spanish, enabling volunteers to sign up for steemit.com and fund their wallets to increase their voting stake.
• Step 6: Church and youth group members volunteer to run the NiceHash miner and configure it to send earnings to the receive address from Step 2.
• Step 7: Church and youth group members from both churches sign up for steemit.com and fund their wallets to raise their voting stakes.
• Step 8: Members of the Presbytery of Honduras begin blogging about their church activities and other relevant topics.
• Step 9: Volunteers from both churches and youth groups vote for posts that they consider to be informative, entertaining, or otherwise valuable.
• Step 10: The Presbytery of Honduras could convert Bitcoin received from volunteers into traditional currency using any of the regulated exchanges, or the Bitcoin could be used to exchange for goods and services from OpenBazaar.
• Step 11: Tokens earned from steemit.com can be converted to bitcoin, and liquidated in the same fashion as above, or they can be used to exchange for goods and services from PeerHub.
• Finally, in addition to a steemit account for the Presbytery of Honduras, Westminster Church and Westminster’s youth group could also set up their own accounts on steemit.com, and where their goals and missions intersect, the three organizations could support each other’s content with their votes.

Conclusion

Following this proposal would enable any charitable organization to set up two entirely new revenue streams using Internet Smart Money. The level of effort for the first, using the miner from NiceHash.com would be very low, nearly 0 after the initial set-up. The level of effort would be higher for obtaining revenue through steemit.com, since it would require blogging, but this is potentially more lucrative and it would also stand to provide financial benefits for volunteers as well as the recipient organization.

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Disclaimer: I am not associated with nicehash.com or steemit.com, except as a product user and an owner of bitcoin and steem forms of Internet Smart Money.

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Thank you for reading. Here's a reward for anyone who made it this far:

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@remlaps is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has also been awarded 3 US patents.

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