Warning: The Cryptocoin Charity Craze is Hiding Something

In the 11th century Pope Urban II issued the earliest known “Indulgence” — a document certifying that a petitioner’s good actions in life would shorten the required penance beyond the grave for offenses they had committed. In short — you were paying the church for forgiveness of your sins. These penances allowed the Catholic church to increase its treasury and relieve its believers of much guilt. It became a pretty robust market and shakedown frankly.

1000 years later we find ourselves in a similar moral quandary: many upstart cryptocurrencies compensate for lack of any real world use case by giving to charity.

The hype-coin scene has given birth to a new slate of exciting “investment” vehicles. Some of these have distinct utility and other can be categorized as “meme coins” — coins which require a following to remain alive. This trend has also seen a host of tokens dedicate funds to charitable giving as a means to garner praise and support — but also, we assume, to truly give back.

ElonGate, Orfano, Happy, Save Planet Earth, Yummy, Word of Waves… the list goes on. Some coins choose charity as a side project others marry the coin directly to activist causes.

Don’t get me wrong, the strategy to give back can be a very positive thing. ElonGate — which launched off of a tweet from Elon Musk has since partnered with Elon’s brother Kimbal to support his philanthropic cause “Big Green” distributing gardening kits to families across the world.

However, as the adage goes, “the road to hell is paved with good intentions.”

It’s revealing that some of the first bullet points out of the gate for these coins center around the charity strategy they’ve implemented. I have some cautionary advice.

First, having worked in an out of the private sector I can tell you that many organized charities are not terribly good at using the monies they’re given. Big donations tend to support staff and overhead and don’t trickle down immediately to the people they’re supposed to help. Charities that are linked to political ideologies and causes tend to line the pocket of consultants and PR firms. I would urge the owners of these coins to look for more established — perhaps even boring charities to throw in with.

Second, there is a distinct generational gap for all of this. Saving the planet is well and good but from a GenX-er point of view — we’ve been trying to save the planet for decades and the harbingers of doom have never come. Many of these “green” projects go belly up and have little to show for their efforts. The predictions of Chicken Little haven’t come about and billions of dollars have gone to give Al Gore some pretty nice mansions. (Go Google “Solyndra” for another green tech failure.) In short, the green planet angle is warm and fuzzy but its ability to deliver is rare.

Third, the charity strategies of these new alt-coin seem to be compensating for lack of actual use or value. When someone pitches me an alt-coin it’s in the framework of “to the moon!” or “what color lambo do you want?” coupled with “and they’re giving back to charity!” Almost like the charitable tactic will compensate for your obvious get-rick-quick motivations. Don’t get me wrong — I love building wealth through alt-coins and I own some of the coins above but don’t be blind to your true intentions and don’t let charity angle cloud your judgement of why we are here.

Now — like fiat currencies — the only thing which truly is needed for a coin is to succeed is trust. Popularity will dictate the direction of the market in many instances. The crypto “purists” however want to see some utility in the coin. “How is the dev team?” “Show me the roadmap.” They have a point. The true mantra of Bitcoin was/is to replace fiat and have some transactional utility. They look down on Doge coin for these same short-failings.

SafeMoon CEO and the Ambassador from Gambia discuss using SafeMoon as a distributed currency for the country and beyond.

Alt-coins desperately want to be take seriously by crypto purists and even financial institutions but with names like DogeFather and even the fairly prosperous ElonGate (the 5th more popular coin with reserves on Pancake Swap) we have some branding hurdles to overcome. This is not a new critique and you can see coins like SafeMoon shooting for big goals — like complimenting or even supplanting the currency of Gambia. You can see these coins and their teams searching and scraping over things to try and understand their true purpose in life.

My suggestion: own the intention of your coin — to generate wealth for its holders. If you’re going to go down the charity route make sure it’s not your main purpose and make sure you’re giving to charities which will actually succeed in their goals. As a buyer you should be asking: if I take away the charity aspect of this coin… is there anything really of value to it?

CMO at large. I live at the intersection of AI, machine learning and marketing. It’s a busy corner! (I need to model that).

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