If a Bitcoin falls in the forest, does it make a sound?

Brother, can you spare a Bitcoin?

For those of us of a certain age – for whom “The Jetsons” scooting through the clouds in their flying cars was can’t-miss Saturday morning viewing – cryptocurrencies such as Bitcoin and Ethereum are currencies about as solid, tangible and measurable as as the breeze created by the wings of hummingbirds sipping on sweet nectar deep in the woods.

If a Bitcoin falls in the forest, does it make a sound?

Well, yes.

Back in the old days – around 2009 or so – a pseudonymous computer nerd (or nerds) with a libertarian streak and a healthy disrespect for the systems that led to a global financial collapse in 2008 created a digital structure for “cryptocurrency” that could be used as a means of exchange.

Give unto Caesar

In a nutshell that for digital non-natives is difficult to crack, the idea was to create 21 million “Bitcoins” that could be exchanged for goods and services. There was no gold Bitcoin minted with Caesar’s image. Instead, the coin’s value rested on a decentralized computer network called the “blockchain,” which essentially was an accounting system, open to the world, that could easily and quickly verify each transaction and would need millions of co-conspirators to effectively hack.

The bottom line is this: Each Bitcoin that in 2009 sold for fractions of a penny is now (which, according to Einstein’s theory of relativity, is really old news) worth more than $67,000.

Forgetting the explanations for why something that can’t be touched but can be digitally stored (please don’t forget your password or make the mistake of giving it to a trusted friend who has a financial interest in your demise), cryptocurrency is here, probably to stay.

Acceptance growing

El Salvador recently approved cryptocurrency as legal tender, and certain automobile manufacturers are accepting it as payment for vehicles. There are now 8,000 separate cryptocurrencies across the globe.

The growing acceptance of cryptocurrency is the reason Cory Howat, executive director of The Catholic Community Foundation of the Archdiocese of New Orleans, has a goal in the coming months of connecting with donors who would like to make cryptocurrency donations to further the mission and ministries of the Catholic Church.

“It’s like anything involved with the church, we’re often slow to react,” Howat said. “The church, in general, has some pretty deep hesitations of getting into this world. What I’m trying to figure out is how the church can at least be in the crypto acceptance business. That’s the million-dollar question for the church: ‘Can we do it?’”

Howat oversees the “iGiveCatholic” and “iGiveCatholicTogether” online giving platforms that encompass Catholic entities across the U.S. Last year, the one-day “iGiveCatholic” platform on the Tuesday after Thanksgiving raised more than $13 million for thousands of Catholic entities in more than 40 dioceses.

“iGiveCatholic Together” is an auxiliary platform that has become a clearinghouse for year-round Catholic stewardship. The United States Conference of Catholic Bishops is working with “iGiveCatholicTogether” to place its annual national collections on that platform, allowing anyone to donate at any time.

Set up crypto platform

Howat’s goal for 2021 is to create a portal on “iGiveCatholicTogether” that would accept cryptocurrency donations, which would then be immediately converted into cash.

“The idea is how can we put this at the service of the church – not engaging in this as a currency but more as a way to be able to foster generosity,” Howat said. “The idea would be that ‘iGiveCatholicTogether’ would be the clearinghouse nationwide for crypto. What I would do is have a policy that within 12 hours, the cryptocurrency donation would be liquidated. That very much mirrors what we do when someone gives us stock. We sell it. We don’t hold on to it.”

There are vendors who work with church denominations and other nonprofits to do exactly that. Many of the early adopters include evangelical churches, the Assemblies of God and the Salvation Army, said Ryan Fox, chief marketing officer of Engiven, Inc.

“Less than 4% of nonprofits right now are even set up to receive cryptocurrency,” Fox said. “Not only is it still in its infancy, it’s also that donors don’t fully realize this is available. It’s not mainstream yet, but it’s a substantial benefit to the donor because they get to write off all those capital gains.”

Concerns about cryptocurrency being used to fund illegal activities on the dark market – such as drugs, prostitution and human trafficking – are miniscule because of the open-transaction platform and more government regulation on the way, said Dr. Shael Wolfson, associate professor of economics at Xavier University of Louisiana.

“It took hold in the black markets at first as a way to exchange value basically over the internet,” Wolfson said. “So things like the eBay of drugs popped up, but I think things have gotten drastically different in the past eight or nine years. By far and away magnitudes more than cryptocurrency, the U.S. dollar is used for black market dealings such as illegal drugs and trafficking and money laundering.”

The $20 bill and the banana

Another Xavier University economics professor, Dr. Jose Bautista, is a member of the board of directors of the Catholic Community Foundation. While he says accepting cryptocurrency donations and converting them quickly into cash is a definite benefit to church ministries, he’s still a bit old school and needs to see cryptocurrency be accepted universally as a medium of exchange.

“It doesn’t become a good medium of exchange, in my opinion, until it is accepted everywhere,” Bautista said.

The three prerequisites for any valid currency, Bautista said, are that it is recognized as a medium of exchange (to eliminate the bartering of goods); as a unit of account (merchandise is valued in a common language such as dollars); and as a store of value (is relatively stable).

“Say you have a $20 bill and you put it in your jeans pocket and it sits in the corner of your room for three weeks,” Bautista said. “Then you rediscover it. Over those three weeks, the $20 bill has stored its value. If we used food as currency and stuck a banana in your jeans, over three weeks, it’s not going to be very good. The reason why we use paper money is because it’s able to store its value.”

Howat said he hopes adding a portal for cryptocurrency donations will allow the church “to meet donors where their generosity is” – and without having to rely on a third-party vendor to convert the cryptocurrency donations into cash.

As far as paying for the construction of a parish hall using cryptocurrency, however, Howat laughed and said, “Give us another 20 years.”

“The first step for the church is just to be a conduit (for the donations), not to use it as a true currency,” Howat said. “We need to get past the myths of cryptocurrency, and the first step of wading into that pool is just being able to accept it and then sell it.”

pfinney@clarionherald.org