{"id":1541,"date":"2022-05-06T23:26:07","date_gmt":"2022-05-07T03:26:07","guid":{"rendered":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/?p=1541"},"modified":"2022-05-06T23:34:44","modified_gmt":"2022-05-07T03:34:44","slug":"the-future-of-fundraising-through-nfts","status":"publish","type":"post","link":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/?p=1541","title":{"rendered":"The Future of Fundraising through NFTs"},"content":{"rendered":"\n

Cryptocurrency\u2019s popularity has increased dramatically within the last decade. In addition, to some raising millions, many have used it to donate to charities. For example, The American Red Cross started accepting bitcoin<\/a> in 2014. That outlet became even more popular when in-person fundraising methods declined during the pandemic; cryptocurrency was a creative outlet to entice worldwide donations without the restrictions of completing transactions internationally. However, recently, the Non Fungible Tokens, or NFTs, have been on the rise and disrupted the fundraising field. They are suspected to be a significant player in the field in the years to come. Alex Wilson, the co-founder of The Giving Block<\/a>, a nonprofit crypto fundraising platform, said that the rise of NFT philanthropy has mirrored general growth across the NFT sector and that over 30% of its donation volume comes from NFT-giving initiatives. Hope for Haiti<\/a> a Virtual Reality Experience<\/a> to raise $50k for earthquake relief in Haiti and Save the Chimps, who made NFTs out of handprints of their chimps. <\/p>\n\n\n\n

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BitCoin on a $100 bill<\/figcaption><\/figure>\n\n\n\n

How do NFTs work? <\/h2>\n\n\n\n

According to Investopedia<\/a>, Non Fungible Tokens (NFTs) are cryptographic representations of assets with unique identification codes that distinguish them from each other, kind of like digital passports. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. NFTs are assets on a blockchain, a distributed database shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. The innovation of a blockchain<\/a> is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party. When someone buys an NFT, for example, on the trading platform Open Sea<\/a>, they engage in a smart contract on the Blockchain. Smart contracts<\/a> are simply programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate an agreement’s execution so that all participants can be immediately sure of the outcome without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the following action when conditions are met. According to The Economist<\/a>, the inventors of NFTs Anil Dash, an entrepreneur, and Kevin McCoy, a digital artist say that the value comes from providing proof that the holder owns that specific token, even if it does not give them copyright or exclusive use of that work. <\/p>\n\n\n\n

\u201cPutting artworks on the blockchain is like listing them in an auction catalogue. It adds a measure of certainty about the work being considered.<\/em>\u201d<\/p>Anil Dash<\/cite><\/blockquote>\n\n\n\n

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A blockchain transaction<\/figcaption><\/figure>\n\n\n\n

In addition to the advantages of the blockchain transaction, NFTs are more than just a pretty digital picture, because blockchains are programmable<\/a>, it\u2019s possible to endow NFTs with features that enable them to expand their purpose over time. NFTs can function like membership cards that provide access to exclusivity, be that yacht parties merchandise, and special discounts \u2014 as well as serving as digital keys to online spaces where holders can engage with each other. Moreover, because the blockchain is public, it\u2019s even possible to send additional products directly to anyone who owns a given token.<\/p>\n\n\n\n

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