Crowdfunding has proven to be a great way for an individual or organization to raise money through donations from the ‘crowd’, which is usually family, friends, strangers, or and anyone who will listen to your story, and who would like to support you.
Crowdfunding basically works by helping you to raising small amounts of money, from a large amount of people, AKA ‘the crowd’.
With the rise of social media platforms, its easy for people to share their crowdfunding pages with a large audience of potential donors very quickly. Often this method of raising funds can be a lot faster and more successful than traditional forms of fundraising drives.
Bitcoin crowdfunding in South Africa
We are providing a bitcoin crowdfunding solution for organizations in South Africa to be able to raise funds using bitcoin. We already make use of our BTCPay server instance to provide functionality for websites in South Africa to accept bitcoin for payment directly, with no middle man in-between, for zero fees, and now have included the crowdfunding app into that service.
Organizations can get a branded donation page which we host for them, which can outline what they do, and why they need funding. This page can be shared on their social media accounts and with anyone they would like to appeal for bitcoin donations from.
Follow the money with bitcoin crowdfunding
With many charities and donation solutions, there are costs and fees involved that eat away at the donation income for the organization. There is also a problem where you dont always know if your donation makes it all the way through to the organization in question.
By using bitcoin, we can circumvent some of these problems fiat crowdfunding platforms have, and allow the organization to get access to all their raised funds quickly.
Popular crowdfunding platforms that use fiat currency to raise funds have inherited the problems of fiat currency when taking a donation. Examples are things such as charging a credit card fee of close to 2.9% per donation, plus a $0.20 fee each transaction, or even having bank charges and restrictions in order to withdraw the raised funds.
We do not charge a percentage as a platform fee like some crowdfunding platforms, but instead charge a once off setup fee. The organization can also save on fees by batching their transactions from the bitcoin wallet to the exchange, and by setting the fee to be cheap and low priority.
We think that the most important part of the bitcoin donations is that the wallet is secure, and that the funds are not lost along the way to the bank account of the organization.
Our bitcoin donation process
Our solution to this is that we create a 2-of-3 multi-signature bitcoin wallet, which we generate addresses from for all the donations, and each donation uses a unique bitcoin address derived from the xpub key of the wallet for privacy.
The funds raised in the bitcoin wallet can only be transferred using 2 of the 3 available keys for signing the transaction. We do this to ensure that the funds are secure, and to make sure that they get to the right bank account at the end of the day. They cannot be easily stolen by someone along the way.
The 3 keys for signing transactions are held by the organization involved, by us (@BitcoinZAR), and by iceCUBED cryptocurrency exchange in South Africa.
The guys at iceCUBED really stepped up and have very kindly setup a non-profit account for customers, which has the benefit of having zero transaction fees on the exchange!
Bitcoin is a solution to many financial problems but need second layer solutions to make it practical. This initiative is on of the few legitimate hands on solutions available to organisations looking for innovative, cost effective and transparent ways to crowd fund projects – G Grobler, iCE3.com
Working with iceCUBED exchange ensures that the organization will never pay for converting the funds raised into Rand, and also ensures that the funds go into the correct registered bank account of the organization, and not someone else in-between. The donation page is also linked via API to the iceCUBED exchange to make sure that the Rand price used during donations is accurate.
Patrons using this setup can be sure that any bitcoin donations received are going to the organization involved.
Get your own bitcoin donation crowdfunding page
If you are interested in having your own bitcoin donation page, contact me at [email protected]
An example of a donation page can be seen here with the ForWildlife trust: https://bit.ly/DontateBTCForWildlife
