Merchants have an incentive to accept the digital currency because fees are lower than the 2–3% typically imposed by credit card processors. However bitcoins can be subject to wide price swings, can be stolen, and lack consumer protections.
Along with the growing popularity of Bitcoin, the number of charitable organizations that accept virtual currencies has been growing. At the same time, so has government scrutiny, creating uncertainty about the continuing value of Bitcoin, Ripple, Litecoin, and other, smaller currencies. In March, the Internal Revenue Service issued its long awaited opinion on the taxation of virtual currencies, ruling they should be treated as property, not currency. That creates administrative and paperwork problems for those using Bitcoin, but also allows donors to obtain generous charitable income tax deductions for donating Bitcoin that is worth more than they paid for it, just as they do for giving appreciated stock to charity.
Some Links on Virtual Currency
How to Donate Bitcoin to Charity and Get a Big Tax Deduction
Bitcoin: How the Charity RNLI is Using the Virtual Currency
Fidelity Charitable Now Accepts Bitcoins
Fidelity Charitable, the second-largest nonprofit fund-raiser in the country, is allowing its donors to contribute bitcoins to their giving accounts.
How Bitcoin is Used in Combatting Ebola
An Advocate Article: "Bitcoin: It's Time for Canadian Nonprofits to Take Notice"
A History of Bitcoin's Ups and Downs
A Detailed Bitcoin Primer