FACC-400 | The Turret

Thanks very much to Antoine Bissonnette & Faiza Ambreen Chowdhury for submitting their FACC 400 assignment to post on The Turret. This guest post looks at the use of cryptocurrency for philanthropy and economic management.

Cryptocurrency: Defying the Norms of Financial Institutions

by Antoine Bissonnette & Faiza Ambreen Chowdhury

In the landscape of global finance, a significant transformation is underway, particularly certain markets where the relevancy of traditional banking institutions is being challenged. Cryptocurrency, once regarded as a niche or speculative asset, is steadily becoming a cornerstone in many industries where traditional banking systems have either failed or cannot adequately meet the needs of the industry. This blog post delves into the pivotal role of cryptocurrency in such industries and emerging markets.

The Rise of Crypto Philanthropy

A growing number of charitable organizations are starting to embrace cryptocurrency donations. While there are organizations dedicated to accepting only crypto-donations like The Giving Block, nowadays even major charity funds such as UNICEF, Greenpeace and the Human Rights Foundation, all offer it as an option to potential donors [4].

There are multiple advantages this offers to both donors and recipients. Firstly, the use of cryptocurrency ensures transparency between donors and organizations, facilitated by the public logging of transactions inherent to cryptocurrency. So donors, recipients and the public can track where the money is going and witness the real-time impact of donations [1]. Digital currency also offers significant tax advantages for donors, the amount donated would not be subject to capital gains taxes, therefore deducted from the donor’s overall gross income [2].

For organizations, providing the choice for crypto donations helps broaden their funding sources. With the rise in popularity of bitcoin, there are more and more people who want to donate, but only have access to cryptocurrency. Another feature that can work in organizations’ favor is the price volatility of the digital currency market. Some organizations have been known to hold donations for some amount of time, to increase the value of donations with time [3].

While cryptocurrency philanthropy showcases the transformative potential of digital assets, its influence extends far beyond charitable donations. In emerging markets, cryptocurrencies are reshaping entire economies, offering financial inclusion and economic empowerment to those who have been left behind by traditional banking systems.

Countries like Venezuela and Argentina, facing hyperinflation and economic instability, have turned to cryptocurrencies not just as an investment but as a means to preserve wealth, transact, and participate in the global economy. In fact, cryptocurrency has become a beacon of hope in emerging markets, offering financial inclusion and economic empowerment to those who have been left behind by traditional banking systems.

Case Study: Cryptocurrency Adoption in Venezuela

In Venezuela, cryptocurrencies serve as a crucial tool against hyperinflation and government control. The country ranks high in global crypto adoption, driven by the necessity to preserve savings in a stable asset and the ease of conducting transactions even during power and internet outages [5] [6]. Moreover, Venezuela’s engagement with cryptocurrencies extends beyond just transactions; it has a significant presence in the crypto mining world, thanks to the country’s low electricity costs. This has led to the creation of a legal framework to support and regulate the mining industry, further solidifying the role of digital currencies in its economy [7].

Influence on Economic Stability in Argentina

Argentina presents another compelling case of crypto’s impact, where the devaluation of the local currency has pushed individuals and businesses towards cryptocurrencies. Stablecoins, in particular, have become popular for preserving the value of earnings and savings, acting as a digital stand-in for the much-sought-after US dollar. The adaptability of cryptocurrencies has allowed for innovative solutions like crypto debit cards, enabling Argentinians to make everyday purchases directly from their crypto wallets, thus circumventing the volatile local currency [8].

These case studies shed light on a broader trend within the financial system, where cryptocurrencies are not just speculative assets but vital financial tools. They offer a way to mitigate the impacts of economic volatility, and enable businesses to operate smoothly despite fluctuating local currencies. As new markets continue to evolve, the role of cryptocurrencies is likely to expand, potentially transforming the global financial landscape and making financial inclusion a tangible reality for millions.

In summary, cryptocurrency is revolutionizing global finance by challenging traditional banking norms. From transforming philanthropy to providing economic stability in emerging markets, its impact is undeniable. Cryptocurrency’s journey is just beginning, promising a dynamic future for finance worldwide.

References:

[1] “Is Cryptophilanthropy The Future Of Giving? | Altoo AG,” Jan. 12, 2024. https://altoo.io/crypto-philanthropy-and-the-future-of-future-of-giving/ (accessed Mar. 28, 2024).

[2] “Tax Deductions for Crypto Donations,” TokenTax. https://tokentax.co/blog/tax-deductions-for-crypto-donations (accessed Mar. 28, 2024).

[3] R. Stevens, “Crypto for Good: How to Donate Crypto and Who Accepts It,” www.coindesk.com, Oct. 12, 2022. https://www.coindesk.com/learn/crypto-for-good-how-to-donate-crypto-and-who-accepts-it/ (accessed Mar. 28, 2024).

[4] T. G. Block, “List of Nonprofits Accepting Bitcoin & Crypto Donations,” The Giving Block. https://thegivingblock.com/resources/nonprofits-accepting-crypto-donations/

[5] Al Jazeera. (2021, June 22). With Venezuela’s economy in crisis, cryptocurrency fills the gaps. https://www.aljazeera.com/news/2021/6/22/with-venezuelas-economy-in-crisis-cryptocurrency-fills-the-gaps

[6] Goschenko, S. (2021, May 28). A look at why Venezuela is the third country with the most crypto adoption – emerging markets bitcoin news. Bitcoin News. https://news.bitcoin.com/venezuela-numbers-cryptocurrency-adoption-factors/

[7] Abad, J. (2022, February 12). P2P payments spurred crypto adoption across Venezuela in 2021. Cointelegraph. https://cointelegraph.com/news/p2p-payments-spurred-crypto-adoption-across-venezuela-in-2021

[8] The Chainalysis Team. (2023, October 23). Latin America cryptocurrency adoption: Data and analysis. Chainalysis. https://www.chainalysis.com/blog/latin-america-cryptocurrency-adoption/

Image from Wikipedia

Welcome back to Aleiah who posted for the Turret while she was a student in Communication in Engineering (CCOM 206). Here is a post she wrote with her fellow student, Kevin Xie, for a class assignment for Engineering Professional Practice (FACC 400).

The Ethics of Colonization on Mars

Humanity is on the verge of technological advancement which will make possible the colonization of Mars, the red planet. According to SpaceX the first human is planned to land on Mars by the year 2024¹. However, this calls into question: Should humanity colonize Mars?

The colonization of Mars is a complex issue with many underlying aspects. There are also many technical challenges such as, overcoming cosmic radiation, bone demineralization and the psychological stress of a journey to Mars. For Mars to be habitable by humans, it must first be terraformed. Terraforming is a process in which the environment of a planet is modified to emulate the earth. It involves the modification of the atmosphere, topography, temperature and ecology. Doing this will help scientists on Earth understand Earth’s own environment as well as facilitate human life on mars. Any technological advancements made will help all of humanity. An example of this is climate change on Earth. Understanding how to control the temperature of a planet can help solve climate change on Earth.

Whether or not the Mars colonization project is a success, humanity can benefit from this project as the technology required to successfully colonize Mars can be useful on Earth as well. For example, here are three industries that would be greatly advanced thanks to the Mars project, to the benefit of humans on Earth:

Agriculture:

The World Bank reported in 2015² that approximately 11% of Earth is arable, meaning capable of being ploughed and used for crops. As human population grows and food security becomes a greater issue, the agricultural industry would benefit from technology that allowed them to farm on unforgiving land. The Mars project faces this exact design problem as humans would need to start growing their own food on Mars in order to successfully colonize there.

Medical:

Astronauts face a number of health issues in space, such as loss of bone density and muscular atrophy due to the lower gravity. In particular, Mars only has 38% of Earth’s gravity. Under prolonged circumstances, astronauts could find themselves facing skeletal damage. Although the circumstances are unique to the astronauts, these health concerns are not. Osteoporosis is a common public health problem whose patients tend to neglect their medication as they don’t believe in the effectiveness of the treatment. Solving this problem for astronauts will also help these patients.

Nuclear Power:

Mars offers very little radiation protection and shielding compared to Earth, due to having no magnetosphere and a very thin atmosphere. Whereas humans on Earth are naturally protected from solar radiation and galactic cosmic rays, as Earth explores more sources of energy including nuclear power, it will soon become increasingly important to create technology that would protect humans from radiation.

Additionally, it is important to think of the colonization of Mars not as a transfer, but an expansion. Creating a colony on Mars does not mean that the earth will be abandoned. It can be compared to the first European settlers arriving in America. America was simply an expansion. In order for humanity to continue to progress, Mars must be colonized.

The colonization of Mars is also a stepping stone for humans to move beyond the solar system. The knowledge gained from colonizing mars will not only pave the way to going to other planets, but also building permanently habitable space stations in which humans can live.

Citations

Arable land (% of land area). (n.d.). Retrieved November 09, 2018, from https://data.worldbank.org/indicator/AG.LND.ARBL.ZS?end=2015&start=2015&view=bar

This is how SpaceX will get humans to Mars by 2024 | CBC News. (2017, September 29). Retrieved November 09, 2018, from https://www.cbc.ca/news/technology/spacex-mars-rocket-elon-musk-1.4312878

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Tag Archives: FACC-400

Cryptocurrency: Defying the Norms of Financial Institutions

The Ethics of Colonization on Mars