(Bloomberg) -- In recent years, a number of startups have tried to latch onto a social good angle. Robo advisors have added socially responsible investing options, insurance startup Lemonade will donate money not paid out in claims to charity, and Uber has a community impact initiative. And now, CryptoKitties are being auctioned off for charity.

You read that right. The CryptoKitties game, sometimes referred to as the digital version of collecting Beanie Babies, is holding a charitable auction for a computerized cat. The game took off in 2017 along with the surging interest in crypto assets, and the team raised a slew of funding from investors like Andreessen Horowitz and Union Square Ventures as users rushed to collect the “collectible cats.” The company uses Ethereum blockchain technology to create digital cats that users then buy, sometimes for more than $100,000, and then use them to breed and create more cats. The new cat being auctioned, named Honu, will raise funds for charities related to oceans and wildlife.

“I am excited by the potential of cryptocurrencies and cryptogoods to change, and hopefully improve, the way we raise funds for charity,” Fred Wilson, partner at Union Square Ventures and early crypto investor, wrote in a blog post.

Honu is hardly the industry's first charitable gesture. Late last month, Coinbase Inc. CEO Brian Armstrong launched GiveCrypto.org, a platform to raise funds in cryptocurrency and then distribute them to people in need around the world. Consumers have thus far been willing to make donations through crypto assets. It's helped that, as the value of many currencies rose dramatically near the end of 2017, they could use the donations as a tax deduction. The charitable giving arm of Fidelity has been accepting bitcoin on its platform since 2015, and last year alone it received $69 million in cryptocurrency donations, up from just $7 million the year before. At the same time, an anonymous individual created a website called Pineapple Fund and donated more than $55 million worth of Bitcoin to 60 charities.

Beyond simple donations, several other projects hope to increase charity accountability with blockchain technology. And some efforts don’t even require a monetary contribution. For example, UNICEF allows you donate to its Australian branch by giving away part of your computing power to let it mine cryptocurrency.

Is this a preview of the future of charitable giving? The idea is being taken seriously. “Blockchain will be one of the most important revolutions of international relief efforts, without any question,” said Larry Lieberman, the chief operating officer of Charity Navigator, an independent charity watchdog. “The efforts will be completely updated because of the blockchain technology.”

But while a digital ledger might make sense for some non-profits, the industry still has some kinks to work out—particularly when it comes to giving what's essentially a speculative asset to organizations tasked with poor relief. Even if many of them just turn around and sell the coins for cash to fund their programs, it adds an extra layer of difficulty for charities. To say nothing of the volatility: What if someone picks up a pricey CryptoKitty at a charity auction, but the dollar value of the ether currency they bought it with falls by 20 percent by the time the auction closes?

“The biggest head scratcher is that organizations may not know what to do with it,” Lieberman said. “Right now they are handling it in the same way they handle stock donations, selling them just like they sell stocks through a third party." This also means incurring transaction costs, though Lieberman says that places like Coinbase and BitPay typically discount the commissions for non-profits.

For some charities, this feels like a moment to own a stake of a burgeoning digital economy, populated with highly priced cartoon creatures, and a turning point in how charitable dollars are tracked. Others, surely, would prefer to stick with cold hard cash.

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To contact the editor responsible for this story: Anne Vandermey at avandermey@bloomberg.net

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