It seems as though the potential benefits of cryptocurrency are often overshadowed by the technology’s inherent vulnerability to exploitation.
And it’s true, crypto adoption does come with risks. Over the past year, governments from around the world have raised concerns that crypto could be used to finance terrorism or other illicit activity like money laundering. There have been prohibitive measures everywhere from China to Nigeria, with many crypto exchanges forced into a legislative chokehold.
While crypto has its challenges, it has also become a tool for policymakers and activists wanting to make the world a better place.
The climate crisis
During 2021, public scrutiny of Bitcoin (BTC) energy-intensive mining practices dominated headlines all year long — and for good reason. According to Digiconomist, Bitcoin mining consumes a similar amount of energy to an entire small country like the Netherlands or the Philippines.
However, many environmental activists are already using the very same technology as a tool in the fight against climate change. For example, smart token contracts have allowed charitable institutions to raise funds in a way never seen before.
Many of these “charity tokens” have a tax system that charges a fee with every transaction, which can then be wired to a charity of choice. For example, the World of Waves (WOW) token is on a mission to restore the planet’s oceans and combat climate change.
The project has a transactional tax of 11% that is redistributed back to all holders, 3.3% to the liquidity pool and 4.4% to the WOW charity wallet. As the charity wallet grows, funds are extracted monthly for donations towards nature conservation activities and the preservation of wildlife. According to the project’s Twitter page, over $49,000 has already been donated. WOW chief operating officer Kristijan Tot told Cointelegraph:
“It's all about making a positive impact on causes around the world while shining the spotlight on NGOs and creators.”
In this way, charitable giving is hardwired into the token’s underlying algorithm. Not only that but holders are also incentivized to invest and stay invested in the project.
WOW isn't the only crypto project using this type of technology to raise funds for an environmental cause.
Solarcoin distributes tokens as a reward to people who install solar arrays in their homes or businesses. The theory is that when the price of the coin exceeds the energy production cost, solar will effectively become free. The project’s website states:
“As of today, cryptocurrencies are worth over US$2 trillion. Most of that value was distributed in exchange for carbon-intensive crypto mining. What if it was given out to people who produced energy for free?”
Black Lives Matter
Of course, environmental conservation isn’t the only issue crypto projects have attempted to tackle over the past year. In June, the world watched in outrage as George Floyd was murdered by a police officer. His death sparked renewed momentum for the Black Lives Matter movement — and no shortage of controversy in the crypto community.
As previously reported by Cointelegraph, a group attempted to cash in on the turmoil by releasing a George Floyd token, a project rife with shaky tokenomics and an unclear payment system. It was also reported that a person attended the protests holding a sign claiming “Bitcoin will save us.”
Despite the obvious bad taste of these isolated instances, the wider community mainly rallied for the cause. For example, the Giving Block introduced a solution for their users to specifically donate to nonprofits supporting the Black Lives Matter movement such as the Chicago Community Bond Fund, Movement for Black Lives and the Bail Project.
Back in 2020, the crypto fundraising platform partnered with Gitcoin to launch its #CryptoForBlackLives campaign. Initially, Gitcoin matched donations up to $25,000 through a community grant. However, that tally was boosted to over $100,000 by the campaign’s completion.
Black activists have also worked tirelessly to ensure their communities are able to benefit from the monetary gains that crypto has to offer. Founder and lead engineer of Guapcoin (GUAP) Taviona Evans says that her platform was able to accomplish more in 2021 than any year prior. GUAP was created to help close the wealth gap in Black communities and support Black-owned businesses in the United States. She told Cointelegraph:
“We've sparked awareness about crypto among a population with less access and education in crypto and finance — and we continue to do so.”
Another area of charitable giving where crypto projects have made a difference this year has been healthcare and mental health. In 2021, the health of many people around the world suffered immensely as the COVID-19 pandemic continued to spread.
Perhaps one of the more unexpected results of the coronavirus was its profound effect on crypto and blockchain, which can be traced to the pandemic’s genesis in late 2019.
From Australia to Mexico, blockchain technology is already being used to verify the authenticity of COVID-19 test results and vaccination certificates.
A number of crypto funds and tokens have also emerged to support communities around the world that have suffered from outbreaks of the virus. In April this year, Polygon co-founder Sandeep Nailwal created the COVID-Crypto Relief Fund as a crushing second wave of the virus tore through his home country of India.
The fund was able to raise a whopping $429.59 million by mid-October, with Ethereum founder Vitalik Buterin, Australia cricketer Brett Lee and Coinbase chief technology officer Balaji Srinivasan among its contributors.
Is crypto a force for social good or bad?
If there has ever been a year to prove that crypto is truly morally agnostic, it was 2021. Around the world, the same technology used to finance terrorism was also used to fund healthcare amid the COVID-19 pandemic. While the world argued about the impact that energy-intensive BTC mining projects have on the environment, others created crypto projects and tokens to save our planet.
As we move into 2022, whether crypto is a force for good or bad remains in the eyes of the holder.