Crypto to the Rescue: Cryptocurrencies Role in the Russia-Ukraine Crisis

How blockchain technology proved its worth during the Russia-Ukraine Conflict

Cryptocurrency is a divisive asset class. Crypto proponents love it to death and think it’s going to the moon. Haters call it a scam and a bubble that is waiting to be burst. Whichever side of the fence you’re on, it's hard to argue that the use case of a crypto project plays a key role in its success.

One of the main criticisms of crypto is its lack of real world application. People do not see how they can use it in real life. Given the complexity of blockchain technology, it’s easy to see why people are dismissing it.

Many people have expressed their dislike for crypto due to a lack of understanding. These people are not your man on the street, but some of the smartest people in the world. Warren Buffett, Charlie Munger, and Jamie Dimon (CEO of JP Morgan Chase) to name a few.

Here’s what they had to say about cryptocurrency:

Warren Buffett

During Berkshire Hathaway’s 2018 annual shareholder meeting, Warren Buffett said this:

Bitcoin is “probably rat poison squared”’

What happened later?

Warren Buffett’s Berkshire invests $1 billion in crypto-friendly Nubank

Jamie Dimon

The CEO of JP Morgan called Bitcoin a fraud in September 2017, and even threatened to fire employees caught trading it.

“I don’t really give a shit about Bitcoin”

What happened later?

JPMorgan Doubles Down on Crypto by Investing in Blockchain Firm TRM Labs

Changing Our Mind Does Not Make Us A Flip Flopper

Most people have the perception that it’s bad to change your mind. It makes you seem like a flip flopper or a wishy washy kind of person. This is why they stick to their old ways, even when there are clear facts showing that they are wrong. An example is holding onto a stock which used to have sound fundamentals, but no longer have.

It’s okay to change our opinions, when facts present themselves to prove us wrong. Amazon founder Jeff Bezos believes that the more the people change their minds, the better they are at making decisions.

People who were right a lot of the time were people who often change their minds. According to Bezos, consistency of thought is NOT a particularly positive trait.

The smartest people are open to new pieces of information, different points of view that challenges their own thinking.

With that, let’s look at some real world applications of crypto.

How Ukraine Raised Money in the Form of Crypto During Russia Invasion

Example 1:

Kyiv-born photographer Vitaliy Raskalov sold his photographs as nonfungible tokens (NFT) on OpenSea. Over 6 months, he raised 4 ETH (more than $10,000). He used this to buy equipment like helmets, flashlights and bulletproof vests. 

Example 2:

Mykhailo Fedorov is Ukraine's minister for digital transformation. He tweeted out wallet addresses for people to directly donate Bitcoin, Ether and Tether to. Ukraine's official Twitter account posted the same addresses.

Example 3:

NFT trader Andrew Wang sent a tweet to his followers. In his tweet, he proposed raising funds with an NFT collection to support the people of Ukraine. Within 24 hours, 37 artists had agreed to contribute one piece each.

Wang collaborated with this group of NFT artists to create a Web 3 initiative called Reli3f. Reli3f sent three organizations 61 Ether each:

• Military support group Come Back Alive

• Local media vetted by the Kyiv Independent publication

• Medical assistance charity Hospitallers

What Does This Mean for Crypto and Blockchain Technology?

The use of cryptocurrency and blockchain technology is evidence of its use case in real life. Huge sums of money can be raised across borders, without any intervention.

Having said that, it is not without its own drawbacks. The ability to bypass regulations is a double-edged sword. Russia is exploring the use of cryptocurrencies to trade with international partners. This way, they can evade the sanctions imposed on them.

Concluding Thoughts

I don’t begrudge people who do not believe in blockchain technology. The technology is incredibly complex to understand.

Truth is you do not have to fully understand something to invest in it. This might sound controversial but let me explain. TCP and IP forms the foundation of the internet. We use the internet everyday, but do we know how TCP/IP works? People can access the internet without understanding how TCP/IP works. In a similar vein, we can invest in crypto without understanding the technology behind it.