Wikipedia Begins Taking Donations in Bitcoin

Photo
The Wikimedia Foundation allows people to make donations using Bitcoin.Credit

Bitcoin has found another taker.

On Wednesday, the Wikimedia Foundation, the nonprofit organization that operates Wikipedia, announced that it would allow people to make donations using Bitcoin, becoming the latest adopter of the virtual currency as a payment option.

“It has always been important to the foundation to make sure donating is as simple and inclusive as possible,” Lisa Gruwell, the chief revenue officer of Wikimedia, wrote in a blog post announcing the move. The foundation said that it had been asked to accept Bitcoin and that those requests, as well as recent guidelines from the Internal Revenue Service, persuaded it to accept the virtual currency.

Like many merchants that have adopted Bitcoin, Wikimedia has teamed up with Coinbase, a third-party payment processor that converts customers’ Bitcoins into dollars. Coinbase, which began with $25 million from the investment firm Andreessen Horowitz, is also working with Overstock, the online travel booking website Expedia and the satellite television provider Dish Network to help them accept the virtual currency. About two weeks ago, Dell announced that customers would be able to make purchases on its website using Bitcoin, claiming to be the biggest retailer yet to do so. In all, about 35,000 merchants use Coinbase’s payment tools, according to the company’s website.

Video

Bitcoin Believers

While regulators debate the pros and cons of bitcoins, this volatile digital currency inspires the question: What makes money, money?

By Channon Hodge, David Gillen, Kimberly Moy and Aaron Byrd on Publish Date November 24, 2013.

In a blog post announcing its partnership with Wikimedia, Coinbase said it would waive the processing fees for all registered nonprofit groups. Typically, companies working with Coinbase pay it a 1 percent processing fee after the first $1 million in sales.

“The Internet has made it easier for nonprofits to operate by enabling them to increase geographic reach and reduce the overhead required to fund-raise,” the company said. “Adding Bitcoin as a donation option is a natural next step for nonprofits.”

Since it was first introduced by a programmer, or group of programmers, in 2009, Bitcoin has gained popularity, particularly among investment firms and venture capitalists. Two weeks ago, New York became the first state to propose regulations for virtual currency companies.

And while an increasing number of well-known companies are also beginning to embrace Bitcoin, in part to lower processing fees, how many customers are using the currency to pay for goods and services is not clear.

“The volume of Bitcoin purchases on these websites is still a relatively small proportion to the overall volume on these sites,” said Gil Luria, an analyst with Wedbush Securities. “But the rate at which they are growing and the rate of spending out of a relatively small consumer base is becoming meaningful.”