BITCOIN BENEVOLENCE

Many of those drawn to Bitcoin in its early years were motivated by more than merely financial enrichment or tech curiosity. They were also attracted by its philosophy, which included self-sovereignty and open collaboration to create a fairer, more inclusive world for everyone. But there was no denying that by 2011, many of those who’d flocked to Bitcoin for these reasons had become wealthy in BTC terms.

Nevertheless, 2011 was a testing year for Bitcoin as it went mainstream, attracting global scrutiny – and often for the wrong reasons. While Bitcoin itself was merely a financial instrument that could be used for good or bad, there was no denying that many of those now utilising it were doing so for nefarious purposes, such as purchasing drugs on Silk Road.

Regardless of individuals’ personal stance on illegal drugs, the community recognised that the optics didn’t look great. There were a lot of things you could do with Bitcoin, but so long as the media focused on the Silk Road angle, the cryptocurrency would be tarred with criminal connotations.

It was against this backdrop that the first philanthropic Bitcoin initiative took shape. Conceived by forum user Phinnaeus Gage, Bitcoin100 aimed to “find 100 supporters willing to pledge at least 1 BTC each” as a pooled donation to the first nonprofit that agreed to accept Bitcoin. This would achieve several positives, it was hoped, providing an opportunity for those who’d done well out of Bitcoin to pay it forward, improve its public image, and incentivise charities to start accepting BTC.

The Bitcoin Bounty

When the campaign was announced on the Bitcointalk forum on November 22nd, 2011, Bitcoin was trading at around $2.50 a coin, having gone through its first boom and bust cycle that summer. As a result, the total Phinnaeus was seeking to raise was nominal in dollar terms, but significant in terms of what it represented: the first Bitcoin charity campaign.

In a spirit that was characteristic of the Bitcoin community back then, the idea resonated and pledges began pouring in. Within minutes, forum users had begun committing to the cause, with one donor offering “10 BTC to every future [charity] recipient while BTC is below $3.” Within two days, almost 40 Bitcoiners had made public pledges, while the first funds arrived into the fundraising wallet address on the very first day.

Raising the funds was to prove significantly easier than finding a charity willing to accept them, most of whom hadn’t even heard of Bitcoin at this stage. In late December, approaches to a number of charities including St. Jude Children’s Research Hospital were rebuffed, leaving these organisations to later rue their hastiness in dismissing the niche digital currency they were being offered.

The Bitcoin community was nothing if not determined, however, and by March 2012 they’d found a charity willing to accept the offer: Group B Strep International (GBSI). The nonprofit, focused on disease awareness, agreed to add a Bitcoin donate option and was duly awarded the 100 BTC bounty, which was then worth around $500.

The transfer of funds from the fundraising wallet highlighted another reason why Bitcoin was ideally suited to such initiatives: the ability to track all activity onchain provided transparency, giving donors confidence that funds were reaching their intended destination. This was in stark contrast to fiat payment rails, which obliged donors to trust that charitable organisations had received everything they were promised.

But despite GBSI having received its 100 BTC donation, the Bitcoin100 pool wasn’t empty. The initial fundraising target had been exceeded, and by 2013 Bitcoin’s surging price meant it was now sitting on a sizable sum. To responsibly manage this windfall, the organisers changed the donation policy, deciding to give the bitcoin equivalent of $1,000 to each new charity.

By the time the project wound down in 2016, it had given thousands of BTC to charity, making a profound difference to the organisations it supported. In the process, it had made Bitcoin synonymous with something far more noble than the use cases that were dominating in 2011 – benevolence.

John Dennehy is the founder of El Salvador-based charity My First Bitcoin. He takes the view that “early charity initiatives went a long way in helping people understand that Bitcoin could be a force for good,” and is adamant that today, “Bitcoin charities are more important than ever. We are at the precipice of a new world and we get to decide what sort of world that will be. Bitcoin teaches us that we can have more control over our own money and future, including using our money to influence our future, rather than just accepting what someone else decides.”