The 180 BTC donation in question took place in January 2013. At that time, the total value was under $3000, but it would be closer to $150,000 at today’s rates.
Murashchik, better known as ‘Rassah’ on the BitcoinTalk forums, has operated Bitcoin100 since 2011 as a means to promote more widespread bitcoin use and demonstrate its effectiveness at fundraising without processing fees or chargebacks.
However, bitcoin’s other selling points, such as relative anonymity and non-refundable nature, could cause headaches for those with good intentions.
Charities often receive funds from stolen credit cards, but those transactions can be reversed – with the charity in question usually having to pay a $20-$100 processing fee for its troubles. A large, anonymous bitcoin donation, though, would be like leaving a bag of cash on a charity’s doorstep after hours.
Even now, Rassah has seen no proof that the donation came from the proceeds of a theft, but can only wonder if it did, since the transaction occurred at around the same time as a few early bitcoin exchanges were hacked and relieved of funds. It's hard to be sure, though:
Bitcoin100's procedure, in cases of large, anonymous donations, is to ask someone to come forward and take credit, even if anonymously. However, if someone donates money and doesn’t come forward, he said, there is absolutely no way to find out who they were.
Bitcoin100 eventually kept the money in question. The organization has always been transparent about its operations, publishing its vanity address online for anyone to examine on Blockchain.info or similar explorers. Promoting transparency via the public ledger is actually another of Rassah’s motivations for pushing bitcoin charity.
Charities in most countries are legally required to report any suspicious donations. However, with bitcoin not officially recognized as a currency in any country, and having legal status as an asset in only a few places, large scale thefts usually go unpunished, if they are investigated at all.
According to its homepage, Bitcoin100 “donates the bitcoin equivalent of $1000 to non-political, secular charities that prominently display an option for supporters to contribute via bitcoin on their website.”
Unlike another more recent high-profile entrant into the bitcoin charity sphere, the BitGive Foundation, Bitcoin100 does not convert its donations into local currency before passing them on to recipients. Instead, the organisation encourages them to continue collecting digitally.
Rassah is a big believer in bitcoin’s ability to help the poor, both through donations and remittances, which incur often-unreasonable fees of up to 11% when sent through an established money transfer business. This hits senders of small amounts the hardest.
The situation is made even worse because Paypal and credit cards often block access to some countries altogether, and, even if they didn't, those who need money the most often don’t have sufficient cash to open bank accounts.
Bitcoin and other cryptocurrencies, however, largely solve these problems.
When asked if he would consider using a block chain or other investigation service to dig into donors’ backgrounds, Rassah was quite adamant that he did not support such services.
Breaking privacy on a massive scale or blacklisting addresses is “highly unethical”, he said, and “doesn’t prevent crime that has already happened, either”. He indicated that he would rather deal with anonymously donated, potentially stolen coins himself, and even pay out of his own pocket if he made the wrong call.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.