Crypto-donations Provide a Potential New Model for Humanitarian Aid

The political and socioeconomic crisis in Venezuela has produced no shortage of tragedies since the global collapse of the price of oil in 2014. However, one potential bright spot has emerged over the last year or so, and that was highlighted this month by the spirit of charity shown to one Reddit user.

According to a thread from the beginning of July, the user Windows7773 mentioned that a 0.5 Nano donation that he received online was more valuable than an entire month’s salary typically earned in Venezuela. As a result, a number of people started sending the user donations in the form of Nano, where he eventually collected 29.1 Nano, which was the equivalent to about $77, all due to the generosity of Reddit’s Nano community.

The same user followed up his reception of the charitable donations with a post detailing his recent purchase of various food products, explaining that “[he was sold] 102 kilograms (224 lb) of food, including cornmeal, meat, rice, sugar, beans, sauces, and avocados.” A substantial stock of groceries provided directly by generous members of the Reddit community and facilitated by Nano.

In response to this uplifting story that unfolded online amidst crisis in Venezuela, the general discussion has reemerged as to the potential usefulness of cryptocurrencies in providing direct aid to ordinary Venezuelan families – who cannot buy food to feed their families. In this case, Nano is essentially a perfect medium for grassroots charitable donations, because it requires no intermediaries or transactional fees.

Venezuela, a country that benefitted exceedingly from high oil prices throughout the early part of this century, relied so much on the resource that its economy essentially collapsed with the price of oil, fostering a scenario where hyperinflation recently reached a level of one million on Bloomberg’s inflation index. That means that a cup of coffee which formerly cost 450 bolivares about two years ago now costs over a million.

Considering that fact, it is welcome news that there may be a means via cryptocurrency for internationals to offer much-needed aid to those suffering due to shortages of food. The Venezuelan government recently introduced an oil-backed cryptocurrency of its own, the Petro, intended to replace the nearly value-less bolivar. If President Maduro is to be believed, the currency apparently brought in over $5 billion at its launch. However, there is little to no confidence that the money earned from the flagship national cryptocurrency will result in substantial efforts to remedy the dire food shortages.

Demonstrations of kindness such as that which manifested itself on Reddit may indicate something more hopeful down the line.

In fact, the prominent Washington-based think tank, the Center for Strategic and International Studies, recently published an article urging humanitarian aid organisations and practitioners to take notice of developments in Venezuela, and to encourage an aid model based on crypto-donations that can directly help local populations. In addition to just assisting people to buy food for themselves and their families, using cryptocurrencies as a medium for charitable donations effectively skips bureaucratic and governmental hurdles that lead to spending waste and are often susceptible to corrupt practices. Crypto-donation-based humanitarian aid is exemplified by the organisation eatBCH, which has facilitated donor purchases of food and supplies using Bitcoin Cash (BCH).

Cryptocurrencies can offer a low-cost, efficient, and secure method to deliver much needed financial aid to impoverished communities across the globe, as we have seen this month through generosity on Reddit and as shown by eatBCH’s humanitarian aid model. Perhaps if humanitarian NGOs and nonprofits begin to explore crypto-donations with more depth, issues of financial waste and corruption can be gradually nullified, and aid can be delivered directly to those who need it.