The cryptocurrency business by its virtue bears the imprint of decentralization, which is determined by the technological essence of the crypto coins. Even hints of centralization with the likes of Ether, Ripple, and EOS, whip up a flurry of criticism. Meanwhile, there is one aspect of business activities that can be implemented only by a group of people, often on the basis of some centralized plan, rather than a chaotic one. And that is the social responsibility of business.
As the Americans say, a company must be community-like, that is, "involved" in the life of the area, the city where its headquarters are located or where its activities take place. The cryptocurrency business, most often, develops in some form of reservations. For example, in the free economic zone of Cagayan in the Philippines or in the High Technology Park, which is located on the outskirts of Minsk. Even Malta, where the head offices of Binance and OKEx have recently been opened, also gives the impression that the activities of these companies have been enclosed in an island state.
Yes, modern communications allow users to be in touch with the whole world, however, these methods of interaction cannot replace the personal communication of representatives of the cryptocurrency business, not only with those who are already "in the business" but also with newcomers who are suspicious of blockchain and cryptocurrencies, just as in the 90s, the older generation did not understand what the Internet and mobile communications were. This analogy was drawn by Tom Lee at the ChainXChange conference.
Cryptocurrency Charity and Its Mistakes
Charity is one of the important areas of social responsibility for businesses. The head of Binance Changpeng Zhao announced the allocation of $1 million, partly in Bitcoins, Binance Coin, and also in Japanese yen to help flood victims in the West of Japan. It is noteworthy that this was a one-off deed, as Zhao appealed to his own "crypto world" to organize the entire "logistics" of such charity, that is, he did not take the opportunity to come out with this initiative in cooperation with international organizations, such as the International Red Cross, or with companies that are not related to the technology. This was a mistake.
Vitalik Buterin's donations also look like one-off actions and like personal initiatives, and not as a desire of the entire Ethereum investor community. Buterin also cooperated only with "his own" this time, or with representatives of the OmiseGO team to support refugee families in Uganda. It also raises the question of why the idea of such assistance did not become the main social trump card for Binance when it came to Uganda this summer, although the Binance Charity fund was opened in Malta.
The support of the representatives of the Dash cryptocurrency team seemed more effective when they appeared in Venezuela, as 1,450 different outlets in the country started working with cryptocoins (this is more than in the U.S.), thereby demonstrating that cryptocurrencies help buy goods where de facto local Bolivars are being refused. The representatives of NANO acted in a similar fashion, although their downside was that they did not actively develop cooperation with local retailers and focused only on buying free food for the poor. The same error is also observed in the charity project of the Bitcoin Cash team. This is expedient from the point of view of business when it works for its purpose. In the case of cryptocurrencies, it is for their recognition as a means of payment equal to fiat.
Free Distribution of Cryptocurrencies: How to Do It Right
Another option of social responsibility is the free distribution of cryptocurrencies to representatives of socially unprotected strata of society. Within the 18 months of GiveCrypto, which was created by the CEO of the American Coinbase exchange, Brian Armstrong, it was possible to distribute cryptos to 10,000 people. And that is not a lot. On the one hand, $1,000 worth of Ether for each person is a lot, and on the other hand, more coverage of operations is needed in order for this initiative to be noticed.
Jonathan Wheeler, who intends to allocate $300 million worth of Bitcoins, is right as he is convinced that in order to achieve a significant effect in charity, "it is necessary to do it for the masses." He correctly sets two goals: to help the poor inhabitants of a particular country, Venezuela, and at the same time, "teach them to leverage Bitcoins."
It is possible to encounter deception in the distribution of cryptocurrencies. Even if this happens, however, it is still a pitfall even for those who start such a charitable project as it happened, for example, with the proposal to distribute free Dash coins. It turned out that there were many suspicious applications for such support among the more than 100,000 signatories. A defunct website is all that remains of that initiative, as well as an awkward statement by Mark Mason, the representative of Dash, that they are planning to reach one million applications.
It is noteworthy that the topic of cryptocurrency charity as a breakthrough way of "reaching out to people" came under the close attention of the Chinese authorities. Beijing authorities see this as competition and a threat to their functions, so they intend to transfer charity to a state-controlled and patented blockchain. Patents, as mentioned earlier, are not used for promoting the development of cryptocurrencies.
The Social Responsibility of the Cryptocurrency Business: Being Closer to People’s Needs
Charity can become more than a manifestation of the social responsibility of the cryptocurrency business. It also includes the existing support for various educational programs in schools and universities, but it is very important that they be accompanied by the practical implementation of cryptos with the obligatory ability to them, for example, to pay in a student café.
Salary payments in cryptocurrencies are also the social responsibility of the cryptocurrency business, which confirms the reality of the belief in the fundamental principles of the crypto world for society. The fact that the majority of employees working in such companies are ready to receive salaries in cryptocurrencies is logical, but it is necessary to extend this practice to those who join companies, and also when working with business partners. In addition, the cryptocurrency business can manifest itself more clearly if it launches cryptocurrency non-state pension plans for its employees. Given the acute perception of the question of the planned increase of the retirement age in Russia, a demonstration that the crypto business is ready to take over part of the social responsibility of the state in the form of crypto pensions would have found a big response among a significant number of friends and acquaintances of those who work in the crypto industry.
An important aspect that the cryptocurrency business often misses out on is the contribution it gives to the economy. This is what needs to be talked about with society and the representatives of state authorities, thus defending the interests of the entire industry. The share of Bitcoin in the Russian economy at the beginning of the year was estimated at no less than five percent of the GDP, according to Citigroup. The GDP growth rate, which, according to the IMF is estimated at 1.7 percent this year, means that Russia's cryptocurrency sector is key to its development. It creates jobs, and also supports the energy sector of the economy by creating additional demand for its products. In addition, the cryptocurrency sector is the main point of innovation activities in Russia, as it is launching modernization processes in many sectors.
By working with social responsibility, crypto businesses can become serious competition for traditional companies, and not only in technological terms. For example, Sarah Calverley, a human resources specialist at Microsoft, is skeptical about cryptocurrencies, but admitted that the ban on buying Bitcoins with credit cards introduced by the Commonwealth Bank of Australia is "guessing it's not a social responsibility move and rather they fear losing dollars to Bitcoin and crypto." Thus, this credit organization has started losing points in the eyes of even crypto skeptics, and the crypto world has started earning them.
Social responsibility is a more important factor for the distribution of cryptocurrencies than custodian services and cryptocurrency ETFs. Social responsibility makes cryptocurrencies closer and more understandable to millions of potential retail investors. This is the best advertising focused on them. As the investor Sean Biggs correctly noted, "every #ICO project should try to give something back to those less fortunate. Crypto corporate and social responsibility should be a thing."
The slow distribution of cryptocurrencies is not a sign that regulation in most countries "does not push for" investing and using cryptos, but the fact that a large number of people do not sense a "soul" in the crypto world. Therefore, it is necessary that each ICO project should not only have a white paper, but also a Social Responsibility Report. And this, of course, should not be a formal attitude, but a mass undertaking with thousands and millions of people, and a "door-to-door" approach. It is necessary to go into the community, get closer to people, and achieve recognition at the level of regulators through that.