Enter bitcoin, the decentralized digital currency and payment network that continues to receive a great deal of media attention. Given its ease of efficiency in facilitating monetary transactions as well as its strong security and privacy properties, the bitcoin processing system is one that every political candidate should strongly consider as an alternative option for raising funds.
In a bit of surprising news, the Federal Election Commission in 2014 voted 6-0 to allow bitcoin contributions to political committees. Here it was ruled that SuperPAC’s can accept bitcoins as donations, up to a voluntary limit of $100. This is consistent with limits set on cash contributions for individual candidates in federal elections.
While political candidates are have been slow to jump into the game, growing numbers of political organizations are now embracing its fundraising benefits. By way of example, the national Libertarian Party has an online link for accepting bitcoin through a collaborative relationship with the digital currency payment processor BitPay. The Institute for Justice, a non-profit libertarian public interest law firm also accepts bitcoin donations. And Libertarian presidential candidate Gary Johnson is raising bitcoins in support of the “Fair Debates” lawsuit, an initiative challenging two-party monopoly in presidential debates.
As a result, prevailing notions about bitcoin as an investment vehicle or strategy to end the Federal Reserve are now being set-aside in favor of promoting its benefits in attracting political campaign funds. Given this milestone, the value of the bitcoin payment system in cultivating additional streams of funding holds great promise. Here are five potential benefits of integrating it into a campaign fund raising strategy.
1. Donor Convenience: Setting up an account to accept bitcoin can be done in 15 minutes or less. Once this step has been completed, donors can then conveniently direct contributions from their bitcoin mobile phone app by scanning the QR code attached to the candidates bitcoin account. Once the currency is deposited into a digital wallet, it can then be converted to cash and transferred into the campaign bank account.
2. Speed of Transaction: Often one of the downsides of accepting contributions by credit cards, debit cards or check ACH transactions is a delay in receiving the funds. In some cases, these funds can take 4-5 days before they actually settle into your account. With bitcoin, funds typically arrive within 4 hours or less. And with political cash contributions limited to $100 or less, the monies will likely arrive even sooner.
3.Lower Transaction Costs: Another disadvantage of contributor credit and debit card use is that the political candidate can be stuck with fees of anywhere from 2-5% per contribution. With bitcoin, transactions are either free or 0.5% at the most. In fact, political organization that are registered with the IRS as a 501(c)(3), can have their transactions processed completely free by the bitcoin processor BitPay. This can be huge savings at a time when every dollar counts.
4. Security: When donors give, they want to know that their contribution is being processed in a fully secure manner. Here bitcoin offers a strong modicum of protection over the all too common breaches and identity theft that can occur when debit and credit cards are used. Moreover, no personally identifiable information like a credit card number or billing addresses is revealed when the bitcoin transaction occurs.
5. Intrigue: In today’s competitive political campaign environments the use of bitcoin can demonstrate state-of-the-art, innovative campaign approach. This speaks volumes particular to younger voters who appreciate candidates that are tech savvy and forward thinking.
Every dollar is important to the success of a political race. It’s here where the bitcoin payment system offers a differentiator from the sole use of old school, legacy approaches to capturing funding that are no longer in touch with the times. Bitcoin on the other hand offers a “bit by bit” approaching leading to small flows of contributions that can be invaluable in propelling a candidate to victory.