DOWNTOWN ‚Äî Nonprofits are known for taking just about any donation. That now includes money that only exists in the digital world.
Boys & Girls Clubs of Santa Monica is the first arm of the national nonprofit to take donations in the revolutionary peer-to-peer digital currency known as Bitcoin, officials with the organization dedicated to serving youth announced this week.
Generous donors can use a Santa Monica-based company known as GoCoin to make Bitcoin donations to the Boys & Girls Clubs of Santa Monica that will benefit at-risk youth and under-privileged families. The Bitcoin donations are instantly and securely converted into U.S. dollars using GoCoin‚Äôs payment platform.
“We are thrilled to be the first of the Boys & Girls Clubs of America, and one of the first non-profits in Los Angeles to welcome Bitcoin users,” said Aaron Young, CEO of Boys & Girls Clubs of Santa Monica. “Not only is our goal to stay on the cutting edge of technology, but to also provide as many options as possible for our community to support and contribute to our efforts to help those in need.”
Bitcoins are an unregulated, virtual currency that is stored in password-protected electronic “wallets” and used to make purchases on the Internet and at some brick-and-mortar businesses, mainly those catering to customers working in the technology field. On the website bitcoinshop.us, people can use Bitcoins to buy coffee, smartphones, a life-size bust of Batman and a Cuisinart five-speed hand mixer.
The currency also is traded in online exchanges, where its value fluctuates widely. Since Jan. 1, Bitcoin has realized an 8,900 percent rally that has taken the virtual currency to a peak of $1,200 per unit. Much of the gain is attributed to speculators snapping up the currency as it gains wider acceptance. Just last month law enforcement and securities agencies said in U.S. Senate hearings that Bitcoin could be a legitimate means of exchange.
Bitcoins are currently not regulated by any country or banking authority.
Introduced in 2008 by a programmer or group of programmers going under the name of Satoshi Nakamoto, Bitcoins exist as software, which contain the rules governing their supply. New Bitcoins can only be created by solving complex problems embedded in the currency, keeping total growth limited. There are more than 12 million Bitcoins in circulation, according to Bitcoincharts, a website that tracks activity across various exchanges.
“Some of the most progressive retail brands are joining the Bitcoin revolution,” said Steve Beauregard, GoCoin‚Äôs founder and CEO. “We are opening the playing field for charitable and political campaign contributions as well. Giving has never fully recovered from the financial crisis of 2008, but people want to give, and that‚Äôs especially true for Bitcoin investors.”
Beauregard started noticing the power of Bitcoins and their potential in the spring. He analyzed the market and saw a “sweet spot,” which was processing and securing transactions using the new currency. With $550,000 in funding from angel investors, GoCoin looks to corner the market.
“Think of us as PayPal for Bitcoin,” he said of GoCoin. “When you check out [of a retailer‚Äôs website] there are different ways to pay for things, like Visa, Mastercard, and PayPal. Now there‚Äôs Bitcoin.”
GoCoin, which is internationally based in Singapore, earns a 1 percent transaction fee if the merchant wishes to keep the Bitcoins. If they wish to be paid in hard cash, GoCoin takes the Bitcoins and trades them on the open market for more value ‚Äî that is if the Bitcoin bubble doesn‚Äôt burst.
“It‚Äôs going to be interesting going forward to see how this all unfolds,” said Young, who has a background in technology. “It could turn out to be the next big thing or it could turn out to be nothing.”
Beauregard is betting big on Bitcoin.
“We have about 20 merchants signed up as early adopters,” he said. “We are just starting to roll out those.”
Beauregard is confident larger cities like Los Angeles, San Francisco and New York will be hubs of Bitcoin activity in the next few years as the currency becomes more widely used by merchants. Those that begin to accept the currency first will benefit the most.
As a sign of good faith, and as a way to promote his business, Beauregard, who is a long-standing council member at the Boys & Girls Clubs of Santa Monica and a volunteer basketball coach, and his business partner have offered to match Bitcoin donations to the nonprofit up to $10,000 throughout the month of December and will donate another $10 for every tweet that uses the hashtag #GO4Good.
To learn more about GoCoin, visit www.gocoin.com.