Can the $86 Million "Pineapple Fund" Save the Soul of Bitcoin?

On Wednesday morning, bitcoin enthusiasts on Reddit woke up to an intriguing thread in r/bitcoin: a user by the name of @PineappleFund had posted, “I’m donating 5057 BTC to charitable causes! Introducing the Pineapple Fund.”

For anyone following the meteoric rise in bitcoin prices, that figure - 5057 BTC - might have the same effect as an extra shot of espresso: it converts to an estimated $86 million.

@PineappleFund continued:

Hello!

I remember starting at bitcoin a few years ago. When bitcoin broke single digits for the first time, I thought that was a triumphant moment for bitcoin. I watched and admired the price jump to $15.. $20.. $30.. wow!*

Today, I see $17,539 per BTC. I still don’t believe reality sometimes. bitcoin has changed my life, and I have far more money than I can ever spend. My aims, goals, and motivations in life have nothing to do with having XX million or being the mega rich. So I’m doing something else: donating the majority of my bitcoins to charitable causes. I’m calling it 🍍 The Pineapple Fund.

Yes, donating ~$86 million worth of bitcoins to charities :)

“Pine”, as the person responsible for the post calls himself, told Inverse in a Reddit private message that the fund’s priority focus areas are “medical research, wildlife conservation, human necessities, defending against sexual abuse, and digital advocacy.”

Anyone interested in receiving funding from the Pineapple Fund can apply via its website. The fund, currently made up of just Pine and a friend, judges applicants based on “the charity’s history, capacity, and transparency. The big question is, ‘do we trust this charity, to make use of the funds efficiently?’”

When it launched publicly on December 13, it had already pledged $3.5 million worth of bitcoin to four organizations: one million each to Watsi, a non-profit building technology for universal healthcare; The Water Project, which implements clean-water projects in Africa; and the Electronic Freedom Foundation, an organization that defends the rights and privacy of internet users. It also pledged to half a million to the BitGive Foundation, which builds projects that use blockchain for global philanthropy.

(In case you’re wondering if this is legit, all of the transactions are recorded and publicly visible here.)

By Friday, the Pineapple Fund had also donated an additional million to the Multidisciplinary Association for Psychedelic Studies (MAPS), a non-profit that researches and advocates for the legalization of psychedelic drugs and marijuana, after Reddit users recommended the organization.

“Our development manager worked all [Wednesday] afternoon to complete all three pages”, Brad Burge, MAPS’ director of communications told Inverse. “We submitted the application around 5:30 p.m… and saw that they had posted the logo to their website this [Thursday] morning.” By noon on Friday, the funds were in MAPS’ bitcoin wallet.

At time of publication, an additional three organizations have received pledges - and all but one grant has been received: SENS Research Foundation ($1 million), Charity: Water ($1 million), and OpenBSD ($50k).

The Crypto Wealth Will be Reddited (Kind Of)

Pine made his announcement at 8 a.m. Eastern on Wednesday, and by Friday morning, his original post had received nearly three thousand comments — and counting.

Many of these were recommendations for organizations that the fund should support. One Reddit user by the name of “EpicMoustacheMan” identified himself as a staff member of Save The Children — an international non-profit and an early adopter of cryptocurrency within the world of international development — and shared that they had already filled out an application.

Pine quickly responded. “We will be in touch, might be a few days, but I promise you we will be in touch : )”

Brad Burge, the director of communications at MAPS, sounded shell-shocked — in the best possible way — when he spoke with Inverse hours after finding out that his organization would soon be receiving a million dollars.

Everything had moved so quickly — and so easily. A three-page application for a million dollars is far from the norm in the world of charitable giving, where it’s typical that even a grant for $50,000 could require a twenty-page application, Burge said.

Before the Pineapple Fund’s donation, MAPS was already in a multi-year fundraising campaign to raise $26 million for the third phase of clinical trials on the effect of MDMA for PTSD treatment. The trials were scheduled to start next year, for approval (hopefully) in 2021. They had $9.7 million still to raise before getting the grant from The Pineapple Fund. That they’ve received a tenth of that in a single day is remarkable.

But this disruption of the cumbersome grant-making process is exactly what technologists like to brag about.

A Return to Bitcoin’s Techno-Utopian Roots

Bitcoin is often described by its evangelists as “the greatest wealth transfer in the history of mankind”, a way for an entrepreneurial, younger generation to bypass the traditional financial structures that govern the world and, supposedly, keep them out.

Invented in 2008 as a decentralized and denationalized currency that was not tied to the whims of any government, cryptocurrency represented a techno-utopian, libertarian ideal for many of its early adopters. “Money without government” meant “money without politics” was the common assumption, as noted independent researcher Bret Scott, who authored a United Nations working paper on blockchain’s potential in international development in 2016.

But it was not just its denationalization that excited its early adopters. A key attribute of bitcoin, the original cryptocurrency, hard-wired into its creation was that once 21 million bitcoins came into circulation, no more coins could be created. This would create a natural buffer against inflation.

But on a more practical level, cryptocurrency also offers both privacy and transparency. Because it operates on the blockchain, a distributed ledger that automatically and verifiably records transactions between different parties, it protects real identities — while protecting against fraud.

These very characteristics made bitcoin irresistible, in its early days, to anyone conducting illicit activity on the darknet. (Fun fact: the FBI was once one of the largest holders of bitcoin, after it shut down and confiscated the coins of the Silk Road, the largest and most infamous black market dark web destination for all things unscrupulous.)

As cryptocurrencies have gone mainstream, their values have climbed exponentially, minting a new generation of crypto-millionaires and even crypto-billionaires — not all of whom need wealth redistribution. Case in point: the Winklevoss twins, best known as the preppy villains that accused Mark Zuckerburg of stealing the idea of Facebook, are now the world’s first crypto-billionaires.

“I am actually quite sad to see the current state of the cryptocurrency community,” Pine shared on HackerNews. “When I first got into bitcoin, most people were there because they were fascinated in building a decentralized currency. Profit seeking was always a part, but not the predominant part. I’m a little sad to see where crypto is today. But I think the original faction is still alive.”

And so, for this bitcoin-multi-millionaire, the fund has become a way of returning to bitcoin’s original values. ”It’s my hope that the Pineapple Fund will inspire generosity in the community saturated with profit-seeking,” he told Inverse.

Of course, not everyone appreciates the digital currency’s libertarianism. “Escaping weak local institutions might help individual people, but does little to empower the broader social majority who remain reliant on the existing systems,” wrote Scott for the UN in 2016. In fact, he concluded that bitcoin was ultimately not the solution for international development precisely because it was too libertarian.

Get It While You Can

It’s still too early to tell how — or if — The Pineapple Fund’s generosity will impact the bitcoin and wider cryptocurrency communities. Does the donation represent a broader trend among crypto-millionaires? Could it mobilize the faction of the bitcoin riche that Pine believes are still committed to the original utopian vision?

And, perhaps the key question: can the soul of bitcoin still be saved?

Cryptocurrency certainly has its limitations. MAPS will be converting its bitcoins into U.S. dollars as soon as it is able, Burge told Inverse. While holding it could result in a bigger payoff, he acknowledged, “there’s significant risk, and that’s an understatement.”

Besides, actually spending bitcoin is still difficult, and converting it into dollars is slow. “We’ve never received a BTC contribution of this size, so we don’t know yet how long it will take to convert,” said Burge.

Coinbase, one of the largest payment wallets, says on its website that sells or withdrawals typically take 4-6 days within the United States, but delays are common.

Bitcoin’s unpredictability is something that The Pineapple Fund itself is keeping in mind. “We’d like to distribute most of the funds in one to two months due to bitcoin volatility,” Pine told Inverse, though the fund will hold onto some bitcoins for the future. And, of course, Pine hasn’t given away all of his bitcoin fortune, just “the majority”, as he said in his original Reddit post.

Many investors and analysts are warning of a bitcoin bubble — one that looks increasingly likely to burst — so non-profits in the Pineapple Fund’s focus areas might want to complete an application while values are still high…and while at least some of Pine’s 5057 BTC are still available.