Cryptocurrencies are underrated. Since the creation of Bitcoin, millions of people around the world and even billions have been offered new choices. These choices represent freedom not only financially but from the inner conflicts which many economies have faced.
Pesos, Bitcoin, and War
Venezuela serves as an example of how cryptocurrency can provide a lifeline from economic turmoil in a nation. High demand for Bitcoin in Venezuela was highly correlated with the nation’s internal conflict. More people saw Bitcoin as an alternative to a significantly devalued national currency.
In the event of an economic downturn and even turmoil, one’s cryptocurrency holdings would most likely be safer than their holdings in bank accounts. There are, however, exceptions to this. Providing a cryptocurrency is not backed by the state or a private entity that is under the disproportionate influence of the state or their opposition, one’s cryptocurrency should be safe.
A civil war, for example, requires one to take into consideration how they transfer their cryptocurrency and who made it. A state-backed stablecoin could be disproportionately affected by civil war while a cryptocurrency like Bitcoin, with no central authority behind its operation, offers more flexibility. There are also war-related events such as blackouts and internet shutdowns that could affect how one is able to carry out transactions in different markets. In a civil war where it becomes harder to carry out transactions using traditional finance, cryptocurrencies like Bitcoin offer alternative offline mediums (e.g. USB, radio signals) for transfer although those mediums are rarely used under normal circumstances.
Politics Stretches to Crypto Dominance
As time progresses, more political groups and nations will deepen their engagement with cryptocurrencies, making it harder to distinguish between cryptocurrencies that are made with the interest of the users in mind and those made with political interests at the forefront. This will reduce the quality of cryptocurrencies available in some ways. However, in the case of the apex cryptocurrency, Bitcoin, users are on a pedestal, with their rights to property and liberty protected from government and non-government authorities.
Source: Thomson Reuters
One of the most underrated and highly valuable features of good cryptocurrencies is how secure they can be from an owner’s perspective. Among other security features, the passwords required to transfer cryptocurrencies are almost impossible to crack. That adds layers of security that few storages of wealth have.
There are privacy coins that make it next to impossible for anyone to associate coins with an owner. This means that as long as one does not disclose their identity and ownership to anyone, no one will come after their cryptocurrencies.
Privacy Coins or Bitcoin?
Cryptocurrencies (good cryptocurrencies) can serve as a good way to preserve wealth, provided that they are not subject to central oversight and also, provided that the infrastructure they depend on is not under significant influence of some authority. The channels used to access cryptocurrencies must still be operational during times of economic turmoil and internal conflict for people to use their cryptocurrencies during such a period.
Even if channels to cryptocurrency are not operational, the cryptocurrencies can still preserve wealth but access to use such storages of wealth may be difficult. For example, Ethereum depends on a lot of Amazon’s cloud technology to operate. Amazon is highly centralised and like a growing number of technology companies, can easily be subject to directions from the government with respect to their support of an alternative financial ecosystem like ethereum. Also, China reportedly accounts for a significant proportion of the mining power required to keep Bitcoin’s blockchain secure. This brings to light the potential weaknesses in the infrastructure of cryptocurrencies that could render them unuseful for conflict such as a civil war.
Cryptocurrencies fluctuate in value. The degree to which they fluctuate depends on the type of cryptocurrency they are as well as other factors. There are stable coins that do not fluctuate in value like most cryptocurrencies. They are usually backed by fiat or some other asset.
Unlike a bank account or other medium of monetary value transfer, cryptocurrencies are not tied down by a central authority, cannot be easily controlled, and may not even be known to exist to authorities unless one discloses ownership.