The co-founder of Coinbase, Brian Armstrong, posted a heartening article on Medium January 27, 2018. In it, Armstrong discusses how he has “been thinking more about how to accelerate the world’s transition to an open financial system,” saying also that “this is our mission at Coinbase.”
In the news recently for having far exceeded its medium-term targets, the digital asset exchange platform Coinbase has closed its doors to venture capitalists as it plots its next move.
Mooting a non-profit as the vehicle of choice, Armstrong suggested that one way to do good with virtual currencies would be to “distribute small amounts of cryptocurrency to people in developing countries.”
Saying that “There is good evidence that unconditional cash transfers are an effective way to help people, and it may help spark economic growth, along with additional usage of cryptocurrency, in those regions,” he has struck a different chord in the often-hyped world of the digital coin.
Armstrong pointed to the millionaires and billionaires who have made their fortunes through cryptocurrency investment, and said: “I suspect [cryptocurrency] may produce the world’s first trillionaires in the next decade.”
He wants those newly rich as well as all cryptocurrency users to become involved in crypto charity. “The Forbes list of wealthiest people is going to be shaken up by early digital currency holders. Similar to the GivingPledge, many of these early holders will want to engage in philanthropy. The Pineapple Fund was a recent example of this, and I think we’ll see more.”
Armstrong mused that the vast majority of charities don’t accept cryptocurrency as donations or, if they do, convert them to USD almost immediately. He is hoping to spark a charity that not only operates on cryptocurrency but also has the foresight to buy and hold.
He imagines such a charity would benefit tremendously going forward and that it would become a “large non-profit fund… [holding cryptocurrency] to capture [the] future potential upside.”
Detailing the structure of the charity, Armstrong said that he imagines it would “help distribute small amounts of crypto to people in need of emerging markets via an evergreen fund (meaning it gives away less each year than the growth of the fund). This sparks economic growth in those regions and creates local crypto economies.”
Positing the buy and hold strategy generating a “fund that rivals the size of the U.S. social security fund ($2.79T USD),” he is adamant that digital currencies don’t forget they are democratic, giving potential.
Speaking of those original aims of freeing the world from fiat currency woes, Armstrong hypothesized a scenario where “With the increased real-world utility, the value of all cryptocurrencies grows by ~1,000x over the coming decade.”
Following this hypothetical scenario, the fund thus generated would become more than a charity and be able to truly address poverty and economic stagnation in targeted countries, running off a fund of billions in dollar value.
Acknowledging that “fraud is a major challenge,” Armstrong nonetheless has an entire digital economy mapped out in his head, further imagining “local people going door to door” to sign up crypto charity recipients, and a “network of local exchangers … in emerging markets.
Imagine if every corner store or kiosk in the developing world, where people top [up] their cell phone minutes or send MoneyGram payments today, was also a local exchanger of cryptocurrency.”
Armstrong depicts a low-tech, peer-review-style fund emerging that simply gives virtual currency away to engender a crypto-economy that boosts productivity and incomes in the targeted areas.
Acknowledging that “These ideas probably aren’t quite right, but could be a start,” Armstrong’s long-term vision is to enable charities and thus a marginalized developing country society to benefit from the immense growth in the value of digital coins, something the average citizen in these countries is precluded from.
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Reiterating that “There are so many early holders of cryptocurrency who’ve become wealthy,” Armstrong went on to say he was “excited to see them begin to engage in philanthropy. If it helps further cryptocurrency adoption at the same time, that’s a win-win.”
Feature image by Jack Bloom