Nonprofits are experimenting with mining cryptocurrency, but what does that even look like?


One of the biggest issues faced by arts and culture nonprofit organizations is how to generate revenue to cover operational costs and support programming. Traditional solutions include contributions, fundraising campaigns, program services and earned income opportunities. One new, albiet controversial, fundraising solution organizations such as UNIESCO have begun experimenting with is cryptomining fundraising campaigns. Cryptomining, also referred to as cryptojacking, as a web traffic monetization technique involves embed software on your website. The Web mining then runs on users’ browsers to generate cryptocurrencies. Typically the back end is provided by an outside service provider such as Coinhive (now closed). Site visitors are mine a cryptocurrency directly from their browsers in exchange for an ad-free environment or any other rewards or incentives you want to come up with. When a nonprofit utilizes this software these coins are then donated to the charity. The legal issues and ethical of such initiative are hotly debated and challenging. Primarily, the problem occurs when the website automatically engages its users into a mining process without explicitly asking a permission to do so.

Creative Application, a website dedicated to arts, media, and technology, was innovative and transparent enough to provide its audience with a blog about a web mining experimental mode for non-members. The initiative was launched in 2017 to discover and try an alternative to ad-driven revenue streams for websites. In order to perform an experiment, the official website of Creative Applications likewise used the service Coinhive to trade visitors’ CPU (Central Processing Unit) in return for an ad-free experience. Their blog updates detail how the experiment was working and its progress. The amount of XMR (a type of cryptocurrency) generated through web mining was highly dependent on the market and its value varied depending on the value of the cryptocurrency itself. The mining software is disabled for mobile devices due to its significant negative effect on the battery. There further there is a chance a smartphone could overheat from heavy processing. In addition, it was decided to disable the miner for computers that operate on battery power. Creative Applications also played with the percentage of throttling, an intentional speeding or slowing of Internet services, to reach the best possible compromise between users’ experience and generated revenue.

Cryptojacking mining for charity schemes are still a very new concept that has unresolved legal issues. Most concerns were expressed by users who have very little trust in the idea of exploiting huge amounts of computer resources and processing power in the background to monetize it. Further, while charitable mining pages, such as UNICEF’s the Hope Page, require the user to opt in to the mining, not all do. Thus there may be privacy and consent issues when there is no explicit agreement digitally signed by a website visitor. However, Creative Applications’ blog points out that technically this process is not much different from how ad networkings collect visitors’ data. The future of this kind of experiments and new ways of generating revenues with the assistance of blockchain technology is unclear. Earlier this year, Google announced its decision to ban all crypto-currency apps from its Play Store. One of the reasons is a financial damage for Google AdSense by crypto-mining substitutes.

Fundraising by charitable mining is an emerging area, and presents a host of potential opportunities and concerns. Look for further research on charitable donations and cryptocurrencies coming soon!

[1] Hay, Steven. ‘‘Web Mining – Monetize Your Website through User Browsers.’’ 99 Bitcoins. February 22, 2018. Accessed December 10, 2018.