Will Cryptocurrencies Prove Useful During a War?

The countries of the world right now are perched precariously when it comes to military aggression. Leaders and governments are teasing the idea of war from time to time, at the tiniest of provocations.

With escalating feuds between nations like India and Pakistan, USA and China and North Korea’s nuclear stockpiling, we can no longer ignore the dark times that are slowly engulfing the idea of peace around us.

When we had previously discussed how Sanctions Had Forced Hamas To Beg For Cryptocurrency Donations, we clearly outlined the kind of power that cryptocurrencies have in circumventing government sanctions, or proving useful in times of crisis, albeit for immoral causes too.

Cryptocurrencies have previously been accused of facilitating terrorism by allowing the terrorists to secure funding. They have also been lauded for proving useful in conflict zones, and helping out with charity. So where exactly does it stand in times of war?

War-Time Economy

When a country is waging a full-blown war, its economy takes a massive hit. Just pick up any history textbook and study the impacts of the World War on the erstwhile wealthy nations. By the end of the war, most countries who had played a part in it, were ravaged.

The economy was in shambles, industry and commerce had become stagnant and people were dying out of poverty and starvation. Additionally, the devaluation of the national currency does not make life any easier for the residents of the country.

Participating countries sought out massive financial aid and loans from other countries, to administer repairs to their national economy. It is thus evident that any country’s financial position will be greatly undermined in times of a war.

Does cryptocurrency help salvage the economy?

This is a very pertinent question, one that I will try to answer while keeping in mind the ground realities of our times.

While it is true that countries like Iran and Venezuela have come up with their national cryptocurrency in order to keep their economy afloat amidst sanctions levied against them, it is difficult to say whether cryptocurrencies will be useful during times of war.

To look at it practically, Bitcoin and any other cryptocurrency trading takes place completely virtually. In times of war, network is usually turned off to limit exchange of any problematic and panic-inducing messages. Often heavy bombing can devastate connectivity, which will render any and all devices useless.

If there is no internet, then cryptocurrencies will become redundant, since it will not be possible to carry out any transactions without the internet.

The crypto community will diminish in size due to connectivity issues and restriction of resources. Governments will monitor all exchanges closely, and an environment of fear and uncertainty will overshadow any ideas of investing in digital assets.

Which is why cryptocurrencies might not be an ideal investment when it comes to war, but we all hope it does not come to that.