It’s hard to miss all the talk about cryptocurrency, NFTs, Bitcoin, blockchain, etc.

Reactions to the new blockchain technology seems to range from “next best thing since …” from those who’ve eagerly embraced it to “too risky and untrustworthy” from those wary of this new (and often volatile) digital landscape. The reality is no doubt somewhere in the middle.

First, let’s look at the terminology involved and what it could mean for nonprofit organizations.

Most of what we’ve been hearing about so far involves cryptocurrency, or digital currency. The oldest and most familiar cryptocurrency, Bitcoin, dates to January 3, 2009. A term that might be more appropriate for cryptocurrency is “token”. For example, gamers already earn tokens while playing online games (similar to the arcades of old) that they can then use in-game to purchase items to help them further their experience. These tokens are often based on a particular cryptocurrency that’s incorporated into the game.

The recently popularized NFT is a unit of data stored on a blockchain and generally equates to a digital asset such as a photo, video or audio file. But there are still plenty of questions surrounding what legal rights, if any, are conveyed with an NFT, such as copyright, so this area of blockchain technology remains fairly volatile.

The underpinning technology of cryptocurrencies and NFTs is the aforementioned blockchain. So, what is it, exactly?

Blockchain is, on a basic level, a database, or a digital ledger of transactions between individual entities that once recorded cannot be altered. These lists of records, or blocks, can then be linked together to create a growing chain of data. Transactions are transparent because they are recorded on a computer network with the transaction history of cryptocurrency wallets, or crypto wallet, being available to the public; however, the owner of the wallet remains anonymous.

Beyond cryptocurrencies, we’re just starting to get a grasp on the possibilities around blockchain technology. Seth Godin called it an “agent of change” because of where the technology can take us, including new ways to track and process legal documents, real estate transactions, medical records, supply chains and so on.

That brings us back to what nonprofits should do when receiving a crypto donation. There are two key steps:

1. Be prepared to accept crypto donations.
2. Say yes!

Nonprofits have tackled other new technologies, such as websites, e-commerce, and mobile apps for fundraising, in order to meet their constituents where they are and how they want to give. Blockchain, via cryptocurrency and NFTs, is the latest iteration. And as those other digital technologies evolved and nonprofits learned to evolve with them, the same holds true for blockchain.

For now, you want to put your organization in a position to say yes. At a basic level, that looks like establishing a crypto wallet so you can accept crypto transactions. Reach out to your technology partners for assistance if you’re not sure how to start.

Beyond donations, blockchain offers several tantalizing uses for nonprofits. For instance, nonprofits could use blockchain technology to track and manage volunteers for large, multiple site events. Or for checking event resources in and out in real time so staff always know who has what and where.

This is a new technology looking for a problem to solve, so let’s say yes to the possibilities.