Can bitcoin become a weapon of war? Russians, Ukrainians and Palestinians in the Gaza Strip are increasingly interested in Bitcoin. Crypto can actually prove very useful in such situations, but it also comes with risks that should not be overlooked.
While the Russian-Ukrainian conflict has posed the threat of a third world war, geopolitical tensions are in full swing. In such situations, cryptocurrencies like Bitcoin can play a key role in everyday life for ordinary people.
Crypto: a lifeline for Ukraine
Russia’s invasion of Ukraine shook all financial markets, including the crypto market. This is how cryptocurrencies reacted to the worst attack since World War II.
First, Bitcoin fell significantly in the days following the invasion. Something that can be explained by investor panic and massive liquidation of risky assets. A few days later, crypto assets rallied strongly.
Crypto donations, which know no limits or limits, have been one of the main reasons for the market rally. To ReutersUkraine has managed to raise millions of dollars through crypto donation platforms alone.
Crypto serving charity
Data from blockchain analytics platform Elliptic shows that around $19.80 million in crypto donations were made during the first quarter. In fact, donations started pouring in when the Ukrainian government officially asked for help for Bitcoin (Bitcoin), ether (ETH) and tether (USDT).
These donations went directly to the Ukrainian government and charities that support Ukraine, such as the hacking group Anonymous. Funding came from individuals, organizations andcrypto company. Even crypto exchange FTX, which recently filed for bankruptcy, joined in.
Crypto donations are not only fast, but also completely transparent. So instead of falling into the wrong hands, they get paid directly purses in danger.
Since the beginning of the Russian-Ukrainian conflict, crypto has proven itself as a means of payment and support. So, can crypto donations be a weapon of war in the Israeli-Palestinian conflict?
A short story
Over the years, violent clashes between Israelis and Palestinians have turned into a deadly war. This is a conflict that has lasted for generations.
Jerusalem is one of the holiest lands for Christians, Jews and Muslims. Israel claims this city as its capital, but Palestine declares East Jerusalem the capital of its future state. Over the past 50 years, Israel has built several settlements in Jerusalem.
More than 600,000 Israelis currently live there, which the Palestinians deny. There have been many attempts at peace since 1979, but tensions in East Jerusalem, Gaza and the West Bank persist.
Bitcoin: a weapon of war?
Thousands of innocent people, particularly Palestinians in the Gaza Strip, have been hard hit by the conflict. Of course, the disruption to daily life also affects the financial network.
To National NewsPalestinians are increasingly turning to crypto assets. “While the Israeli authorities are restricting trade and access [à la bande de Gaza], more and more residents are turning to cryptocurrencies for a living. This despite all the risks,” reports the newspaper.
Gaza-based Noor was unaware of Bitcoin before her makeup shop was destroyed in an Israeli attack in 2021. From there she started invest in cryptocurrencies to survive.
“My life changed when I learned it invest in bitcoin and started selling makeup online,” she said.
dr Tariq Dana, an advisor at Al-Shabaka, a Palestinian political network, believes many Palestinians have turned to crypto as a way to escape Israel’s restrictive measures.
“I think the decentralized nature of crypto encourages us to generate income through secure and independent platforms,” said Kareem, a Gaza resident who also invests in bitcoin.
For his part, Haitham Zuhair, a Palestinian crypto investor and businessman, said: “I am sure that Bitcoin’s price drop has caused losses to many traders in Gaza because their initial investments and capital are not as important as we think.”
“Education and experience are key to being able to use crypto as a tool for income generation and economic stability in Palestine. It only takes one misstep to lose a fortune in crypto.”
Bitcoin: a handy tool, but not without its risks
Although cryptocurrencies have enabled many Palestinians to take advantage of the global financial market, they are not a viable solution for the Palestinian authorities, warns Mohammed Khaled, a Gaza-based business journalist.
“It’s impossible for government transactions to be conducted using bitcoin…the crypto transaction system in Palestine is centralized, which means Israel can suspend deposits and withdrawals,” he added.
Mr Khaled’s concerns are not unfounded. In fact, the Israeli authorities have already done so $7.7 million seized of Bitcoin (BTC) and Dogecoin (DOGE) owned by Hamas, a group that supports Gaza.
Conclusion
Fiat currencies have always been manipulated in times of war. ATMs are no longer working and governments are banning banks from selling international currencies or accepting certain types of payments. Result: Many citizens are unable to conduct transactions.
Under extreme circumstances like war, local banks holding foreign currency become inaccessible. Governments are therefore offering alternatives such as meal and fuel vouchers. As seen in Ukraine, these conditions create uncertainty and increase inflation rates.
Crypto can solve many of these problems very well. For example, P2P payments cannot be regulated or banned by any military organization or government. It is therefore a decentralized and secure payment method that can theoretically withstand any political regime.
Finally, it is worth remembering that crypto has already proven itself. Since the beginning of the Russian-Ukrainian conflict, millions of dollars in anonymous donations have flowed across blockchain borders. It is therefore reasonable to assume that crypto could play a key role in the event of a third world war.
However, Bitcoin and other crypto assets also have disadvantages, especially when it comes to security. This is why cybersecurity should be a top priority for crypto project developers.
Disclaimer
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