What would you do if you had $86m? It’s a welcome dilemma for some of bitcoin’s early adopters thanks to the cryptocurrency’s meteoric rise, from less than $1,000 last year to a peak of almost $20,000 in December.
One generous bitcoiner has decided to follow the lead of Bill Gates and establish a philanthropic purse, the Pineapple Fund, because “once you have enough money, money doesn’t matter,” they say.
The founder, known only as Pine, declared in mid December “I’m donating 5,057 BTC to charitable causes!” and since then has given away $7,550,000 in bitcoin to charities and causes around the world, with a view to dispersing the remaining bitcoin over the next several months.
“I’m happy that I can help change the world for the better,” Pine says in a phone conversation on condition of anonymity. “I have a great deal of faith in humanity, but I wish more people could live with love and respect for each other.”
Q&AWhat is bitcoin?
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Bitcoin is a 'cryptocurrency' – a decentralised tradeable digital asset. Invented in 2008, you store your bitcoins in a digital wallet, and transactions are stored in a public ledger known as the bitcoin blockchain, which prevents the digital currency being double-spent.
Cryptocurrencies can be used to send transactions between two parties via the use of private and public keys. These transfers can be done with minimal processing cost, allowing users to avoid the fees charged by traditional financial institutions - as well as the oversight and regulation that entails. The lack of any central authority oversight is one of the attractions.
This means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person.
The exchange rate has been volatile, with some deeming it a risky investment. In January 2021 the UK's Financial Conduct Authority warned consumers they should be prepared to lose all their money if they invest in schemes promising high returns from digital currencies such as bitcoin.
In practice it has been far more important for the dark economy than it has for most legitimate uses. In November 2021 it hit a record high of more than $68,000, as a growing number of investors backed it as an alternative to other assets during the Covid crisis.
Bitcoin has been criticised for the vast energy reserves and associated carbon footprint of the system. New bitcoins are created by “mining” coins, which is done by using computers to carry out complex calculations. The more bitcoins that have been "mined", the longer it takes to mine new coin, and the more electricity is used in the process.
Early adopters of the currency who had the foresight to hold on to their coins, are now reaping the rewards. In a world where most high net-worth individuals are hoarding their wealth as inequalities widen, Pine is bucking the trend.
Pine explains that they look for three things when choosing who to donate to: “How impactful their work is (especially on an international scale), what new innovative skills they are bringing to the table, and how efficient and sustainable they are.”
“But to be honest, the biggest factor is my gut. I only fund charities that I trust, and with trust, I believe they are best posed to answer the more micro questions and do good in this world,” Pine adds.
The nine recipients of the largest bitcoin charitable donations are a collection of nonprofits including medical researchers, those providing poverty-stricken communities with basic necessities, and technology-related causes such as advocacy and open-source projects. Naturally, they are all delighted with the new influx of funds.
“It was a wonderful surprise,” says Karen Gullo, a spokesperson for the Electronic Frontier Foundation, an organisation that defends people’s rights online. “The $1m donation will support the work we do standing up for user privacy and free expression, and defending civil rights in the digital world — work that is critically important during these challenging times.”
The collection of charities also includes Watsi, a platform committed to taking the US towards universal healthcare, the SENS Research Foundation that works to develop cures for degenerative diseases, and the Water Project which helps to establish safe water sources in Sub-Saharan Africa.
Another $1m gift will help fund advanced clinical trials of MDMA-assisted psychotherapy for post-traumatic stress disorder in an upcoming study sponsored by the Multidisciplinary Association for Psychedelic Studies (Maps).
“The Pineapple Fund’s outstanding generosity exemplifies how the growth of cryptocurrency can be leveraged for profound social change,” said Rick Doblin, the founder of Maps that applied to the fund at 5.30pm one day last week to wake up to almost 60BTC in their wallet.
“The blockchain community is helping to lead the way, not only in decentralised technologies and currencies, but in giving the gift of MDMA-assisted psychotherapy to the world in order to heal trauma and bring greater compassion to psychiatry and medicine.”
After making news of the Pineapple Fund donation public, Maps recieved a further anonymous donation of almost $1m in bitcoin, Doblin said.
Another recipient is the BitGive Foundation, a charity building projects that leverage bitcoin and blockchain technology for global philanthropy, a similar venture to their own.
“This gift is a game changer for us. This single contribution is more than the total amount of funding BitGive raised in the past 4.5 years,” says Connie Gallippi, founder of BitGive. “We did our due diligence on the funds, and they were legitimate and clean, so it was happily welcomed.”
The continuing Christmas presents are likely to challenge the already-shifting narrative that Bitcoin is only a currency used by criminals. However, it does little to convince doubters that the bubble isn’t going to burst one day.
“I think we are overvalued right now and due for a crash,” says Pine, although they are not surprised at bitcoin’s valuation today. “However, I think in the very long term it will continue to rise in value as a deflationary currency [since there is a fixed supply of around 21m bitcoin, 4m of which are yet to be mined].”
With the vast majority of the fund still up for grabs, Pine is inviting applications from other worthwhile causes for consideration. They say their other main areas of focus are mental health, environmental conservation and combating domestic violence and sexual abuse.
But why is the war-chest coined the Pineapple Fund? “I’ve always liked Pineapple but since it contains bromelain [an enzyme that digests protein] your mouth becomes tender if you eat too much of it,” they say, referring to an occasion where overindulgence caused a temporary allergy. “Then, like now, is a good time to share the pineapple. I have too many bitcoins for the life I would like to live, so I am sharing them.”