Bitcoin: how the charity RNLI is using the digital currency
Bitcoin have been in the news for being used to anonymously buy naked pictures of celebrities, but could charities gain extra donations by accepting the cyber currency?
Why did RNLI decide to use Bitcoins?
The idea came from our research into future trends and changes that may impact on the RNLI. Basically, it looked likely that we would receive digital currency as a donation and/or as part of a legacy at some point and we wanted to be prepared for that eventuality. While researching, we became aware that using Bitcoin could expose the RNLI to new audiences.
Was it complicated to set yourselves up to receive Bitcoins?
Setting up what’s called a wallet, which is a bit like a paypal account, was a quick and simple process. There are a number of sites you can use to set up a wallet. We are trialling some different ones we’ve researched. There’s no charge to those donating. We do however pay a small fee to convert Bitcoin to pounds, and we do this in batches rather than by single donation, to make it cheaper. Fees are worked out the same as they are at a bureau de change, so they vary according to the current value of Bitcoin (currently around £300, but it fluctuates). There’s also a fee of about £5 to transfer to our bank account.
Why would someone donate to you using Bitcoins?
There are people who like the fact that we are experimenting and exploring with something new and so feel inclined to give some of their Bitcoins because of this. Others simply see it as another way of donating.
Did you have any reservations about using what has been something of a controversial currency?
Once we’d spoken to experts and all internal stakeholders, the Bitcoin project team were able to identify potential issues. Any initial reservations were often based on a lack of knowledge. There have been negative stories and we discussed these, but we felt that, on balance, this was a technology that we should know more about. We took time to understand how it worked and to figure out how we could accept donations in the most secure way.
How many donations have you had since you started receiving them on 30 July?
There have been 140 donations, the largest were two separate donations of about £300 each. The average Bitcoin donation we receive at the moment is around £10.
What can RNLI do with Bitcoin money?
Bitcoin can be converted into sterling, spent online or spent in person at some places (at this Swanage newsagent for example).
We have converted most of the donations so far – £1,300 – into sterling using a UK based exchange. Again, we are trialling a few different ones from bitcoin.org.
We are converting them to pounds when the total in the wallet reaches certain amounts – this minimises transaction costs and reduces our exposure to the risk of price changes.
Could more charities do this? Any advice?
Bitcoin is especially good for international money transfers, as – unlike normal banking – there is no difference in costs when sending Bitcoins across the world. I’d expect those who work on international projects to be the next adopters. There might be savings to be made when transferring money internationally in this way and then converting to local currency.