The biggest European military conflict since World War II is brewing in Ukraine, and bitcoin could shape the outcome. in the words of Washington PostThe battle between Russia and Ukraine is the “world’s first crypto war” as both sides discover the benefits of a borderless, permissionless currency.
People around the world have already donated millions to NGOs trying to defend Ukraine from the barbaric Russian invasion. Meanwhile, some in Ukraine are turning to bitcoin as panic of war is ravaging the country’s ATMs. In one case, Danish journalists allegedly used Satoshi’s currency to buy a car and flee the country. Twenty years ago, gold could be used to barter in conflict zones – today it is bitcoin.
Meanwhile, prominent crypto figures—many of whom are as affluent as Russia’s hateful oligarchs—are lending their influence to the conflict. Ethereum founder Vitalik Buterin took to Twitter in his native Russian to block the attack. Sam Banksman-Fried tweeted That FTX gave $25 to every Ukrainian on the platform.
These are inspiring stories of how crypto is helping Ukrainians who are clearly good people in this struggle. But the open nature of crypto is a two-way street: Experts predict that Russia and its leaders will turn to crypto as a way of circumventing the economic sanctions that have accumulated on them. Bitcoin can help good people, but it can also help bad people. As many people like to say crypto is tech agnostic.
In some ways, none of this is new. Rogue states such as Iran and North Korea have long turned to alternative forms of finance when they have been shut out of the global banking system. And expatriate communities have always found a way to support their side in a foreign conflict. Imagine an IRA collecting money at Boston taverns, or Sri Lankan Tamils collecting money at temples in Toronto.
What’s new and different is how easy it is with crypto to fund such activities almost instantly. The latest example, in addition to Ukraine, is protests from Canadian truckers, which were continued by bitcoin donations. Many on Crypto Twitter rejoiced at these activities, but I heard a very different perspective from my family and friends in Canada. Like most of his countrymen, he was angered by a radical minority blocking the border, and outraged that foreign money was funding much of the chaos.
The point is that crypto continues to play a significant role in the financing of conflict, violent or otherwise. The moral issue with Ukraine is clear, but it will not always be the case. There is a risk that the crypto community—out of trust or just for the pleasure of posting nonsense—will use its money to intervene in political or military conflicts it doesn’t understand.
This risk is high because crypto itself is being politicized. As noted in a clever essay by Coin Center’s Jerry Brito, crypto used to have a handful of supporters in the Democratic and Republican parties, while most politicians didn’t know or care about it. But in today’s highly polarized environment, crypto has become yet another partisan issue that has led people to form opinions based on what party leaders think—even if they don’t understand bitcoin at first.
This mix of favoritism and crypto is a dangerous brew to fund conflicts. Fortunately, the former is something we can control: level-headed people, such as those at Coin Center, can help convince our politicians that crypto is first and foremost a technology that can be used for good or for bad. can be done for. Blockchain doesn’t care about politics. as Vitalik tweeted This week, “Ethereum is neutral, but I am not.” The sooner people realize that crypto itself is not biased, the better it will be for crypto and society.
For the people and the government to use crypto to fund the struggle, he is here to stay. Just as the internet is now part of the war—think of Russia’s cyber attacks and the recent retaliatory attacks by Anonymous Hacker Collective—crypto is too. The battle between Russia and Ukraine may be the “world’s first crypto war” but it is certainly not the last.
this is Roberts on crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt’s Executive Editor Jeff John Roberts. Sign up for the Decrypt Debrief email newsletter to get it delivered to your inbox every Saturday. And read last weekend’s column: How to get over a $100 million fine and call it a win.
Top 5 crypto news and features delivered to your inbox each day.
Get Daily Digest for the best decrypt. News, core features and more.