Lodge Letter #33: On Crypto & War
What role will crypto play in wartime? It’s complicated. Plus: The start of Farming Round 11
Greetings Elks,
The world changed this past week.
Russian President Vladimir Putin’s invasion into Ukraine this past week marks the largest military engagement in Europe since World War II, upending global geopolitics in a way most of us have not experienced in our lifetimes. As news filters in across social media and traditional outlets, most of us are still in a state of shock, but one thing is clear: the world is now a different, more dangerous place, even for those of us fortunate enough to be observing from a relatively safe distance at present.
Crypto’s role in this emerging conflict has already been a topic of widespread discussion. The conflict has roiled global financial markets, which include cryptocurrency. U.S. and European countries have imposed sweeping sanctions designed to cripple Russia’s economy–a move that is expected to impact markets the world over.
Still, the question of how recent events will affect crypto prices feels somewhat crude and inappropriate at this moment when the lives and basic safety of our friends and community are at risk. What is more worthy of consideration, however, is how cryptocurrencies will factor into the unfolding conflict.
As of this morning, the Russian ruble collapsed by 40% following the move to cut off Russia from the SWIFT international banking system. The debasing of the Russian currency and its decoupling from USD as a global reserve currency has led to speculation about an acceleration toward new blockchain-backed currencies, with Russia hinting at plans of rolling out a “one world” digital currency.
More immediately, however, there is a question of how cryptocurrencies will shape wartime strategy. On this front, opinions are sharply divided on whether or not it will be a force for good. Similar to what we observed with the Crypto Relief Fund during the height of the COVID-19 pandemic in India, multiple platforms (including the Ukrainian government) have already raised millions in crypto donations to provide defense and humanitarian support for Ukraine. Many commentators have also pointed to cryptocurrencies as a lifeline for everyday citizens in Russia, Ukraine, and elsewhere in the face of bank runs or blocked accounts.
[Editor’s Note: If you are interested in helping with an initiative to collect donations that would be donated for humanitarian aid purposes to Ukraine and other countries in need, please let us know by pinging @hapukoor in Elk Telegram].
On the other extreme, some commentators have cautioned that cryptocurrencies can be used to circumvent sanctions, in some cases even going so far as to suggest that “Bitcoin incentivizes war.” In a nutshell, the argument here is that economic sanctions are the primary means by which international conflicts are resolved without bloodshed, and cryptocurrencies limit their effectiveness, either through rerouting funds or ransomware attacks.
So which is it? Does crypto promote peace through economic liberation, or does it fuel war by providing a workaround for sanctions? The very existence of both arguments suggests that the answer is more complicated. Here we might follow technology historian Melvin Kranzberg’s first law of technology:
Technology is neither good nor bad; nor is it neutral.
To claim that crypto makes war worse is akin to saying that video games cause violence. On the other hand, it cannot be denied that cryptocurrencies have and will continue to be used by bad actors to evade consequences. In the end, technology is created by humans, so the operative question is not whether crypto is good or bad but how we use it. The final part — that technology is not neutral — is equally important.
With that in mind, you might consider this week how to use it for good.
In case you missed it, Farming Round 11 started this past Friday. Review the linked medium post for changes to farms and emissions. This will be the last round before the launch of the ElkNet v.2 upgrade.
On the partnership front, we hosted Teddy Cash, an Avalanche lending and stablecoin protocol, for a first-ever AMA on Twitter Spaces in advance of launching a brand new dual-token TEDDY-ELK farm. There are also 3 days left to enter the Elk Finance x MetacosmiX Giveaway for tokens and MetabeastZ TCG booster packs.
Stay safe out there.
