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10 years of blockchain
Bitcoin in Review Going into 2020
How An Anonymous Bitcoin Fund Donated $55 Million to Charity
“Because when you have enough money, money doesn’t matter.”
The quotation above represents a powerful idea that may not resonate with over 65% of the global population that lives on less than $10 a day*. Despite this, given the sharp rise in wealth inequality since the 1970s**, it is encouraging to come across stories that highlight efforts to create a balance: generous acts of philanthropy.
Philanthropy has always been practiced by wealthy individuals and organisations to promote the welfare of others through donations to good causes. Nevertheless, some in the wider community might question the agenda of philanthropists; Is their motivation true selflessness? Is there a personal or political agenda? Is the act purely for marketing purposes?
When considering the notion of giving, it’s possible a philanthropist’s motivation might not be pure. This is why it is especially impressive to come across a philanthropic initiative that is anonymous, selfless, and impactful. A notable example of a new field in giving is the philanthropy of cryptocurrency. This genre of philanthropic initiatives is fuelled by the exponential rise in the value of digital coins; in other words, the cryptoassets that are backed by the ground-breaking technology blockchain.
Bitcoin Boom: Creating A New Breed of Wealthy
Wealth creation has always been a primary objective of our capitalistic system, and the goal of creating wealth fuelled by rising cryptocurrencies is no different from that stemming from rising stocks or the price of gold. In 2009, a peer-to-peer digital cash system was introduced to the world, leveraging advanced distributed computing systems and cryptography. Called Bitcoin, it is a completely decentralised and transparent form of cash that has disintermediated our traditional financial system, and had enormous implications for numerous sectors and industries. Bitcoin and some of the other crypto coins have, for some individuals, created great wealth – and made a new breed of wealthy possible.
At the end of 2010, close to 10 million Bitcoin had been created, and they were shared within a small ecosystem of technology enthusiasts. At the time, Bitcoin was trading between $0.0008 and $0.08 per coin. Over time, its price rose, and it is therefore not hard to imagine how an individual who accumulated a substantial amount of Bitcoin (BTC) in the early stages – when it was worth mere pennies – would be worth millions of dollars when the price of a single Bitcoin reached close to $18,000 in 2017.
Pineapple Fund: Popularizer of Cryptocurrency Philanthropy
On 14 December, 2017, an anonymous individual with the pseudonym “Pine” created a post on the popular social networking site Reddit explaining his motivation for creating a charitable fund to disburse the majority of his Bitcoin wealth. Dubbed ‘an experiment in philanthropy with cryptocurrency wealth’, it was named The Pineapple Fund. Originally Pine planned to give away 5,057 Bitcoins, which were then worth around $86 million, and thousands of non-profits and charities applied for funding on Pineapple Fund’s website. When asked why he decided to establish the fund, Pine replied:
“Sometime around the early days of bitcoin, I saw the promise of decentralized money and decided to mine/buy/trade some magical internet tokens. The expectation shattering returns of bitcoin over many years has lead to an amount far more than I can spend. What do you do when you have more money than you can ever possibly spend? Donating most of it to charity is what I’m doing. For reference, The Pineapple Fund is bigger than the entire market cap of bitcoin when I got in, and one of the richest 250 bitcoin addresses today.”
The original post outlined the underlying motivation for establishing the fund as well as a list of its first contributions to several non-profits:
- $2 million to Watsi, an innovative crowdsourcing platform with a mandate of providing universal, affordable healthcare to underprivileged populations in developing countries.
- $1 million to The Water Project, a charity focused on providing access to clean, safe, and reliable water and sanitation solutions across Africa. The donation led to 37 new water projects that have given thousands of people access to clean water.
- $1 million to The Electronic Frontier Foundation (EFF), an international non-profit digital rights group that promotes internet civil liberties.
- $500,000 to Bitgive Foundation, a blockchain-powered non-profit that builds charity projects using blockchain technology.
More Pineapple Fund Bitcoin Beneficiaries
According to Pineapple Fund’s official website, 60 charities received funding, totalling 5,104 Bitcoins. Cumulatively, these were worth over $55 million. The donations for each organisation ranged from $50,000 to $5 million. A drop in the price of Bitcoin, along with the general cryptocurrency market in early 2018, reduced the value of donations relative to the planned commitment.
Other charities to receive a substantial donation from Pineapple Fund included:
Multidisciplinary Association for Psychedelic Studies: $5 Million
One of the key recipients of Pineapple Fund was the Multidisciplinary Association for Psychedelic Studies (MAPS), a non-profit research organisation dedicated to exploring the use of psychedelic substances. The donation of $5 million allowed MAPS to engage in clinical studies of the drug methylenedioxymethamphetamine (MMA) to be used for patients suffering from post-traumatic stress disorder (PTSD). This had the potential to lead to a huge medical breakthrough for millions of individuals suffering from PTSD.
GiveDirectly: $5 Million
GiveDirectly is a non-profit organisation that provides poverty-stricken families in East Africa (Kenya, Uganda, and Rwanda) with cash donations via mobile phones. After rigorous audits using public data on shortlisted households, GiveDirectly transferred approximately $1,000 to each recipient.
Open Medicine Foundation: $5 Million
The Open Medicine Foundation (OMF) focuses on accelerating collaborative medical research into chronic complex diseases. OMF initially received $1 million from Pineapple Fund to accelerate research into a complex illness called Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS). However, after a remarkable outpouring of public thanks from the patient community on Reddit, another $4 million was donated, to boost the development of cures for ME/CFS.
Mona Foundation: $1 Million
A non-profit that supports worldwide initiatives in education and equality, Mona Foundation empowers children through education. In 2018, Mona supported via 16 projects the education and empowerment of more than 411,000 students in 10 countries.
The End of the Road
Just five months after the Pineapple Fund’s first donation, Pine decided it was time to close the fund and bid farewell to his supporters and recipients. Pine thanked those who were behind him as well as the wider Bitcoin community. On a deeper level, Pine embraced the spirit of the cryptocurrency community and reiterated the raison d’etre of Bitcoin:
“Every development since then makes Bitcoin stronger, and better at solving the problems of the existing… monetary system. It’s created a new generation of crypto early adopters, cypherpunks or technologists using cryptography to change the world; and now having the power and responsibility of capital.” Pine
The initiative led by Pine, an anonymous individual – or perhaps collective – received universal approval for its philanthropic efforts. To date, it is the single greatest act of altruism the cryptocurrency community has come across. Large donations were made to charities and nonprofits in the pursuit of effecting a positive change on society. Whether in the spheres of the environment, medicine, technology or health, wealth was distributed from someone who amassed a fortune due to the exponential growth of Bitcoin; a truly groundbreaking act. Perhaps above all else, the Pineapple Fund represents the unwavering standard to which the new generation of wealthy individuals, the new cryptocurrency wealth generation, could aspire to achieve.
* Our World in Data: Distribution of population between different poverty thresholds, World
** The Guardian: Inequality: is it rising, and can we reverse it?