Crypto Giver: What to Expect From This Young Billionaire's Philanthropy

For some people, like my college friend in Silicon Beach or my father’s girlfriend, “crypto”—or cryptocurrency—is the future. And woe unto you if you don’t see the future. Cryptocurrencies, for the uninitiated, are digital monies secured through encryption, typically not controlled by central banks. One popular form, Bitcoin, is basically a computer file stored in a digital wallet application on a smartphone or computer. People can send Bitcoins to your digital wallet, and you can send Bitcoins to others. Every single transaction is recorded in a public ledger called the blockchain. Right now, one Bitcoin is equal to approximately 8,324 USD.

Just a few years old, these technologies are already being used in diverse spaces, including in the nonprofit world, where many organizations now accept cryptocurrencies like Bitcoin or Ethereum, including United Way, Red Cross and Save the Children.

A Big Winner in a Growing Field

In 2012, billionaire Brian Armstrong, 36, co-founded Coinbase, which has now grown to become the largest cryptocurrency exchange in the U.S. According to Forbes, Coinbase raised $300 million in October 2018 in a financing round led by Tiger Global that valued the company at a whopping $8 billion. And with a $1 billion net worth, Armstrong recently signed the Giving Pledge, becoming the first crypto billionaire to pledge to give away the majority of his wealth.

Armstrong’s personal philanthropy is still taking shape. He’s been involved with Tipping Point Community, an anti-poverty outfit in the Bay Area. Last year, he attended a gala for the organization, which raised more than $14 million and accepted cryptocurrencies for the first time. “I think a lot more charities will be accepting crypto in the future,” Armstrong said at the time.

Meanwhile, his Giving Pledge letter hints at other emerging philanthropic interests: “Whether it's through improving education, creating a more level playing field, or increasing economic freedom, I'm interested in helping more people see their ideas come to fruition in the world.”

Last June, Armstrong launched GiveCrypto, whose mission is to financially empower people by distributing cryptocurrency globally. “His Giving Pledge is somewhat separate from GiveCrypto. Presumably, some will be going to GiveCrypto, but will likely involve other interests as well,” explained Joe Waltman, executive director of GiveCrypto in a recent conversation, adding that “his [Armstrong’s] vision is that there is a big role for crypto to play in philanthropy and giving cash in the form of crypto to those in need.”

Better understanding Armstrong’s work through GiveCrypto might be instructive in getting a handle on the tech winner’s larger philanthropic vision, which is just kicking off.

A Global Mission

GiveCrypto aims to “financially empower people by distributing cryptocurrency globally.” Waltman tells me that it first began its work by doing a bunch of experiments around the world. “It could be refugees, or a war-torn situation. We’ve also dealt with victims of domestic abuse. But hyperinflation, or broken money, appears to be the most compelling use case where we can have the most short-term impact,” Waltman says.

To that end, GiveCrypto has turned all of its attention to Venezuela, where the country’s hyperinflation rate recently hit 10 million percent. As the country’s economic crisis has worsened, so too have the challenges Venezuelans face—including hunger, lack of medical care, rising unemployment, and violent crime. “We’re focusing on Venezuela for now, where money is broken in many ways, aiming to improve food security and psychological well-being amongst the few thousand people we’ve helped. And from there, we’ll scale up,” Waltman says.

Similar to the GiveDirectly model, GiveCrypto aims to place funds right into the hands of people in struggling economies, where they can convert crypto into their local currency, carry out crypto-transactions, or hold it (“hodl” in crypto-slang) over the long term. Armstrong has donated $1 million himself to the organization, which has now raised $4 million in total. Other donors include Chris Larsen of Ripple, angel investor Ron Conway, and Arthur Hayes, co-founder of BitMEX.

“Last year’s fundraiser brought out the usual crypto suspects. We raised about $4 million, and spent very little of that, so far. We’re a lean and mean operation,” Waltman says. He runs the organization with two engineers on site. Before coming to GiveCrypto, he worked as an engineer for Qualcomm and co-founded several tech companies.

On the ground in Venezuela, GiveCrypto relies on field operations managers—trusted locals who can help those most in need. These ambassadors are scored based on their work, gaining or losing responsibility. “We don’t know a lot about what’s going on on the ground. We’re North Americans in tech. So we find it’s important to leverage this local knowledge and willingness to help,” Waltman adds.

What’s Next?

In the coming year, Waltman hopes that GiveCrypto will continue to scale up, impacting tens of thousands to hundreds of thousands of Venezuelans. He knows, though, that this also implies a certain amount of funds raised. Ultimately, Waltman hopes that he isn’t just providing liquidity and basic cash transfers, but also something more sustainable. “Maybe we can provide small business loans in the form of crypto and decentralized finance services, and potentially leapfrog certain financial institutions with some of these. But that might be a little too ambitious for just 12 months,” he adds with a laugh.

To be sure, this is just the beginning for the young billionaire Brian Armstrong, who is also still very much engaged in business. However, it appears that he’s poised to start turning to philanthropy sooner rather than later, and so his work through GiveCrypto and beyond should be watched carefully going forward.

Related: Brave New World: How Cryptocurrencies and the Blockchain Are Changing Philanthropy