Biggest military conflict in Europe since World War II rages in Ukraine, and Bitcoin may decide the outcome. So today we will discuss what does Ukraine have to do with Bitcoin and the ‘World’s First Crypto War’. Let’s find out by reading the article below.
What does Ukraine have to do with Bitcoin?
The Russia-Ukraine conflict has shown that cryptocurrencies can be used for fundraising in military conflicts. Notably, the Ukrainian government began accepting crypto donations at the beginning of the year to increase donor inclusivity, which led to the creation of the Ukrainian Crypto Fund.
The 'World's First Crypto War'
The battle between Russia and Ukraine is, in the words of The Washington Post, “the world’s first cryptocurrency war,” as both sides discover the advantages of a borderless, permissionless currency.
People around the world have donated millions of dollars to NGOs trying to defend Ukraine from a brutal Russian invasion. Meanwhile, some in Ukraine are turning to bitcoin as war fears drain the country’s ATMs. In one reported case, a Danish journalist used Satoshi’s currency to buy a car and fled the country. Twenty years ago, gold might have been used to barter in conflict zones today it is bitcoin.
Meanwhile, leading cryptocurrency figures many of whom are as wealthy as Russia’s loathsome oligarchs are wielding influence over the conflict. Ethereum founder Vitalik Buterin condemned the hack on Twitter in his native Russian. Sam Bankman-Fried tweeted that FTX gave away $25 to every Ukrainian on the platform. The point is, cryptocurrencies have become a tool for financing violent conflict or other conflicts. For Ukraine, the moral case is clear, but that was not always the case. There is a risk that the crypto community -- out of conviction or just for the fun of posting shit -- will use its wealth to interfere in political or military conflicts it doesn't understand.
This risk is even greater given how crypto itself has become politicized. As Coin Center's Jerry Brito pointed out in an astute article, cryptocurrencies once had a minority of supporters in both the Democratic and Republican parties, while most politicians didn't know or care about it. But in today's highly polarized environment, cryptocurrencies have become yet another partisan issue, causing opinions to be formed based on what party leaders think even if they know nothing about Bitcoin.
As for people and governments using cryptocurrencies to fund conflict, this is here to stay. Just as the internet is now part of the war -- think of the Russian cyberattacks and the recent push back by the Anonymous hacker group -- so is encryption. The battle between Russia and Ukraine may be "the world's first crypto war," but it definitely won't be the last.
I hope this article will help you to learn what does Ukraine have to do with Bitcoin and the ‘World’s First Crypto War’. For every 1% increase in the Russo-Ukraine war, Bitcoin transaction volume decreased by 0.2%. The findings also showed that the effect was more pronounced in the post-invasion period, especially one week after the invasion.
