Is Crypto Worth a Christian’s Time?

Crypto evangelists want to make you a believer. Here’s how to decide.

There are good reasons to be skeptical about cryptocurrency. For one, it’s debatable whether “currency” is even accurate. And in fact, consensus seems to be leaning more towards calling it a financial “security,” or more generally a “digital asset.” But it depends on who you ask, and probably on how you define “money.” None of which is as simple as it seems.

In reality, crypto is a “currency” much like a postage stamp is “currency.” You can use cash to buy stamps and then use those stamps to send packages. Thus, stamps do have real value. They can be used to do real work.

And the parallels don’t end there. Using that stamp gives you access to a network. In fact, to send a package, you must use their stamps. Stamps are both currency and your ticket to join the network. The stamp is your login to the postal network, so that you can send a package to wherever you choose. Meanwhile, to receive a package, you don’t even need a stamp — all you need is a valid address.

This whole postal network, with stamps and addresses, is one of the better analogies I’ve heard for understanding blockchain, with its cryptocurrencies and wallets, respectively. It’s an image that has continued to guide me as I’ve wrestled to understand what is an otherwise baffling new system of digital transactions.

One would think that crypto evangelists, for all their religious fervor, would make crypto and blockchain easier for us neophytes to understand, but they haven’t. Take any sort of deep dive into the world of cryptocurrency, and the jargon alone is enough to make your head spin: blockchain, protocol, DAOs, tokens, non-fungible, permissionless, trustless, smart contracts, distributed ledger, decentralized, gas fees, proof of stake, fiat currency. Any one of these words by itself seems understandable. Except “fungible.” No one understands what “fungible” means. But taken together, this host of words not only boggles the mind, but each word seems to get redefined in the world of crypto.

Fortunately, you don’t need to know all the crypto-jargon to evaluate it. Keep that picture of stamps and the postal network in your mind’s eye, and it will help steer you right as you determine the value of crypto. You’ll also need a scorecard. You’ll need to decide what crypto is for, and how well it achieves that goal. For Christians, let me suggest a couple goals to score it against.

What is Worth A Christian’s Time?

There are many ways we might determine what is “worth” a Christians time. But for the sake of argument, let’s narrow it to three prominent values of the Christian life. First, crypto would be worth our time if it can help us love God and love others better. Such improvements could mean helping us care for widows and orphans, for the marginalized, the sick, or the incarcerated. It could mean doing justly, loving mercy, and walking humbly. It could also mean creating communities that are more just, truthful, and loving. If crypto could do any of these things, and not create obstacles to them, then it might be worth a Christian’s time.

Second, crypto would be worth Christian’s time if it enables people to become more like Jesus. Christlikeness could mean people who are far from God begin to turn toward God in some way and begin to love him and others. It could involve people who regularly seek God’s will for themselves and for the good of others. When asked whether to pay taxes, Jesus looked at the face of the Roman coin, and likened that to the face of a human being. Give to Caesar that which bears his image. And to God, that which bears his. If crypto could help us bear Christ’s image more and more, then by all means let’s use it.

Third, crypto would be worth Christian’s time if it helps people better steward their time, money, or other resources. Creation is a gift God has given us to be enjoyed gratefully, opened up creatively, and given back to him for his glory. The same with our time and money. If crypto can help Christians steward these things better than before, then it would be worth our investment.

With these three criteria in mind, we can evaluate three case studies in crypto and see how they score. You might think of additional criteria you would apply. That’s great. You can score these case studies using your own criteria as well. (If you do have other criteria, share them in the comments. We’d love to add that to our thinking!)

Crypto Case Studies

The number of blockchain-driven projects is diverse and too numerous to count. Here are three that have hit our radar.

El Salvador’s Bitcoin Beach

One of the most notable cases of Bitcoin adoption has been “Bitcoin Beach” in El Salvador. Forbes reported how El Zonte, an economically stagnant town, was revitalized in 2019 when an early Bitcoin adopter rediscovered his Bitcoin wallet, now worth hundreds of thousands of dollars. The newly minted philanthropist partnered with Mike Peterson, an American expat living much of the year in the surfside town of 3,000. Most El Zonte residents didn’t even have their own bank account, and with Peterson’s help they opened Bitcoin wallets and began using the Bitcoin as a liquid asset. Using the blockchain ecosystem, a Bitcoin economy developed, enabling residents to more easily pay other residents for goods and services. The Bitcoin Beach initiative has helped fund youth work programs, educational grants, community construction projects, utilities, food and basic needs, and more.

For the country of El Salvador, plagued with crime, the positive news coming out of El Zonte (and later Punta Mango) compelled the country’s president Nayib Bukele to adopt Bitcoin as a national currency. Within a month, 46% of El Salvador’s population had opened a Bitcoin wallet. “By contrast, as of 2017, only 29 percent of Salvadorans had bank accounts” (Forbes). Meanwhile, while the President’s decision injected liquidity into El Salvador’s economy, Bitcoin’s own fluctuating prices have resulted in a roller coaster for the country’s citizens, driving the IMF to plead with President Bukele to cash out on the country’s Bitcoin bet. (Critics of fiat currency may argue that the IMF is simply seeking to retain its influence over global finance.)

Bitcoin Beach, and El Salvador more broadly, is certainly a compelling story of the good Bitcoin can do in a depressed economy, but is it more than a heart-warming human interest story? The role of the anonymous donor is worth reflecting on. As is Mike Peterson’s role, who is himself a follower of Jesus. We can credit both these men with being agents of redemption and restoration in the country. And we can praise God for it. Their good work certainly depicts how Christians might leverage a Bitcoin economy for good. But that good outcome might not happen without them. After all, the donor injected hundreds of thousands of dollars into the local economy. This shouldn’t be overlooked, and Bitcoin shouldn’t get credit for this generosity.

What Bitcoin can take credit for is how it enabled Peterson and the donor to easily transfer the value across national borders into El Zonte and jumpstart the local economy. This ease of transfer is one of the major arguments enthusiasts often make in favor of crypto. Bitcoin can also take credit for creating a more liquid economy and enabling more regular value exchanges among the residents. Is this liquidity inherently good? More on that later. Let’s look at our second case study.

Nepal’s Sikka Blockchain for Aid

Numerous humanitarian aid efforts have popped up around the globe that are using blockchain technology, from Kenya to Jordan to Vanuatu. In Nepal in 2017, World Vision’s Nepal Innovation Lab built “Sikka,” a blockchain-based system to distribute aid to people who are often financially excluded.

In April the following year, 105 locals from Balefi, Phulpingkot, were rebuilding and improving an existing irrigation canal. They’d been hired as part of a cash-for-work program, and World Vision used Sikka to distribute their cash payments. On pay day, the locals were oriented in how to use the system with their own feature phones and SMS messaging. Seventy-three workers had their own phone, and the remaining 32 used the phone number of a friend or family member. After receiving text messages confirming the number of “Sikkas” (meaning “coin” in Nepali) they were to receive, they headed over to the local cooperative and, with another exchange of texts, received their cash payments.

This pilot program securely distributed $5,500 USD. Between the SMS fees and the costs of using the Ethereum platform, the transactions cost $0.50 per beneficiary, just over $50. Meanwhile, a “post pilot analysis of time and costs clearly showed reduction of operational costs by over 78% compared to conventional distribution process” (source).

After this initial pilot program, the Nepal Innovation Lab expanded Sikka onto Hyperledger so that other aid agencies would have options that complied to country-specific regulations. Meanwhile, in Nepal, a ban on cryptocurrencies left the Sikka project in limbo. However, the team never presented Sikka as a currency, but as a digital voucher — once a Sikka token was used, it was destroyed. Ultimately, this strategy proved successful and allowed the pilot to expand from $5,500 in 2018 to about $600,000 in 2020. Those 105 pioneering locals paved the way for more than 100,000 beneficiaries in Nepal who sought aid after major flooding and the global COVID pandemic hit the country .

The Sikka system seems to update an already existing cash-for-work program that World Vision had in place. Does it better enable that program to continue? The Sikka system does deserve some credit for simplifying the operational costs accrued to World Vision and its partners. We’ll discuss this more in the final section.

Additionally the Sikka system provided the local workers with a degree of security that paper vouchers could not. Since the vouchers were tied to the worker’s identity and possession of their phone, they no longer had to worry about keeping track of a paper voucher that could easily be stolen and redeemed without verification.

The Sikka project uses crypto assets in a very different way than Bitcoin Beach does, treating them as digital vouchers that expire rather than perpetual currency. This highlights a way that the stamp analogy breaks down too, since stamps, like the Sikkas, are destroyed after they are used. (Their cash value ends up going to the postal service provider.) The case of Bitcoin Beach on the other hand creates an ongoing microeconomy of exchange. However, the Sikka project demonstrates how blockchains can have multiple types of assets, including crypto, e-vouchers, and NFTs, which we haven’t mentioned at all. In this way, blockchains provide marketplaces for transactions, but what gets exchanged can vary. This flexibility is worth remembering because blockchains could be used in ways other than exchanging something like cash.

Riot Blockchain’s Energy Consumption

We’ve looked at two positive stories related to crypto and blockchain-enabled systems, but it’s worth looking at other players within the crypto ecosystem as well. Their system includes crypto miners like Riot Blockchain, based in Texas. In July 2021, the company mined 443 Bitcoin (“BTC”). One year later, in July 2022, the company’s production decreased to 318 BTC, a drop of about 28%. At July’s average BTC price of $21,643, Riot netted about $6.88 million. That’s no small amount, but why the decrease?

Because the company realized it could earn $9.5 million in power credits by not straining the regional power grid. The company’s press release did the math: “Riot curtailed a total of 11,717 megawatt hours in July, enough to power 13,121 average homes for one month.” Let that sink in for a moment. Riot’s mining operation is so energy intensive that it requires the energy of tens of thousands of homes.

Compare Riot’s value-creation to the value created by the average US household in July. Given the median monthly household income in the US was $5,626 (as of 2020), that means those 13,121 households produced at least $73.8 million in value while working in July 2022. By contrast, if Riot Blockchain had used those 11,717 megawatts of energy, they would have produced about $1.5 million in value. In other words, the dollars-to-megawatts ratio is 6,300:1 for households versus 128:1 for Bitcoin mining.

$73.8 million versus $1.5 million for the same amount of energy? For every 1 megawatt hour, households produce at least 49x more value than Bitcoin. From an energy standpoint, bitcoin just doesn’t measure up. Even if one considers the liquidity that Bitcoin injects into struggling economies like El Zonte, can that make up for the costs involved in making such liquidity possible?

Aside from this dollar-for-dollar comparison, Bitcoin’s energy consumption alone should be screaming at us when it comes to climate change. Riot estimates they cut BTC production by 21% in July. If they cut their energy consumption by a similar margin, that means they use somewhere around 60,000 megawatt hours every month, equivalent to providing power to the entire population of Fort Collins, Colorado, or Oxford, England. Can this rate of energy consumption be morally justified?

Evaluating Crypto As Christians

With these stories in mind, we return to the Christian values we laid out at the top. No doubt, myriad other stories could be told about blockchain and crypto. And they should be. Telling coherent stories about these systems is a major challenge. It’s also necessary. In truth, distilling even these three case studies into coherent narratives was challenging. The hype and controversy around these systems is thick. The jargon is maddening at times. Even so, Christians must continue striving to see crypto clearly. Once the stories are told, we can then determine crypto’s true value. For that reason, we return to our scorecard.

First, does the crypto in these stories help us love God and love others better? The story of Bitcoin Beach and the empowerment of the El Salvadoran people certainly sounds like one of serving people who have been largely excluded from financial markets even within their own country. An increase from 29% to 46% sounds like a win for helping the marginalized gain access to financial markets. It started with the generosity of a philanthropist and a Jesus-follower. Bitcoin contributed by making the money transfer a bit easier and less costly. It made the generosity easier, and so made something happen that might not have otherwise. Bitcoin didn’t create that generous spirit, but it made that spirit easier to enact.

Meanwhile, the El Salvadoran people had to adopt new tech to benefit from that generosity. Those who didn’t have cell phones or computers — a third of the world still doesn’t — had to get them. Those who didn’t have crypto wallets — only about 3% of the globe does — had to create accounts and learn the new systems. Learning these new systems may destabilize the influence that the country’s central banks have over the value of the national currency. And it does expose the country to the risks of riding Bitcoin’s roller coaster of value.

The tech adoption may have been a hurdle, but with the carrot of cryptocurrency enticing them, El Salvadorans strived to obtain it. Those who didn’t have bank accounts now had potential liquid assets for the first time. The long-term impact of easier transactions will probably be both good and bad — people will buy things that both help and hurt them. So while the generosity certainly deserves our praise, how the people use the currency will certainly be more varied in its outcomes.

The Sikka story in Nepal may have a similarly variegated result, with workers able to use the money as they wish. This freedom to choose is praiseworthy, nonetheless. As regards the broader voucher system that it implemented, Sikka has done some good, notably in reducing operational costs. It also ensures that those workers will receive the pay to which they are entitled, without risk of losing paper vouchers or having them stolen. In this regard, those who work and deserve to be paid, can be relatively confident they will be. This confidence is motivating, and the work itself is dignifying. And to the degree that the work contributes to the community, the community benefits from this new level of security too. That’s something Sikka delivers.

World Vision and its partners deserve a good amount of credit here too, for setting up the system, creating the incentives, and working with local organizations to establish this payment system. What the blockchain can perhaps take credit for is the ability to secure those payments and ensure they go to the right people, something that it seems was much harder to do prior to the blockchain.

As for Riot Blockchain, there seems little to commend it in terms of helping people love God or others, except insofar as mining Bitcoins adds more liquidity to markets like El Salvador’s. But as we said, liquidity can be both good and bad, so the value of Riot’s contribution remains inconclusive at best.

Second, does the crypto in these stories enable people to become more like Jesus? At Bitcoin Beach, the work of Mike Peterson and the donor certainly does contain echoes of Jesus’s generosity. Did Bitcoin and blockchain make this possible? To some degree, yes. As we said above, it didn’t create the generous spirit, but it did make it easier to act on that generosity. Could this have been done in other ways? Yes. Would it have been as easy, or easier? Perhaps. Some enthusiasts claim that transaction fees are much lower with Bitcoin than with fiat currencies and exchanges, meaning that more money would end up in El Zonte’s microeconomy. This may be true in many cases, but crypto fees (called “gas” fees) seem unpredictable and should probably be taken on a case-by-case basis. Regardless, Bitcoin certainly did afford Peterson and the donor to image Christ in good ways.

Another person reflecting Jesus might be El Salvador’s President Bukele, who adopted the currency and made it possible for more citizens to join their local, national, and international economies. Bitcoin truly did make this an easy move for the President. It incentivized him to do something seemingly very good for his people. Here, Bitcoin itself does seem to deserve credit for motivating a politician to act for real benefit on behalf of his country. Of course, the benefit comes in the forms of participation and market liquidity, but that benefit must be tempered by Bitcoin’s fluctuations in global value.

What about for the El Salvadorans themselves who are participating in this new microeconomy? The simple ease of transacting business probably doesn’t generate a clear reflection of Jesus. However, the ability for participants to easily pay their peers is a good step toward encouraging greater justice and equity among them. If in the past, they couldn’t pay a peer because they didn’t have liquid assets, now they can. Of course, it may diminish the prospect of a gift economy, or managing business and personal exchanges on a longer time horizon. All in all, there seems to be some true benefit for El Salvadorans, but the outcome can’t be deemed unequivocally good.

In the case of Sikka, one could argue that World Vision is encouraging more just labor practices in Nepal by ensuring that workers are paid. The greater benefit of becoming more like Jesus does seem to go to the workers themselves who are incentivized toward dignifying work and honorable pay. The Sikka system does deserve some credit for securing that confidence and so incentivizing that work.

And as regards Riot Blockchain, the system seems to actively distort the Christlikeness of everyone affected. This deformation affects the households who are paying higher energy bills to keep their lights on (as well as the household that can no longer can afford to). It also deforms the executives and investors at Riot Blockchain who are benefitting from and justifying the thousands of Bitcoin mining rigs that are drawing down that energy. The households are unknowingly victimized by having to compete for more expensive energy. The second group knowingly engages those practices for their own benefit — their own souls bending inward on themselves. In this case, crypto itself may not be directly to blame, but the larger system it’s embedded in, whether that’s blockchain or the Internet’s energy-dependent economy, certainly is.

Third, does the crypto in these stories help people better steward their time, money, or other resources? For Peterson and the donor of Bitcoin Beach, the prospect of lower transaction fees might be one way that money is better stewarded, but lower fees seems like only a slight improvement. Most crypto advocates would highlight the ability to avoid paying powerful financial institutions, and while this might be a point for justice, it’s not necessarily a credit towards stewardship.

What about El Zonte’s and El Salvador’s citizens? Does Bitcoin enable them to better steward their resources? Again, the liquidity of the market may make the entire microeconomy more efficient, enabling more goods and services to change hands among the people there. That said, the transactions themselves require the mining that Riot Blockchain is doing, and so Bitcoin Beach is in some ways complicit in Riot’s extreme energy consumption. Consider, in one month alone, Riot consumes enough energy to power the town of El Zonte for almost 5 years. We can argue whether El Zonte’s citizens are culpable for Riot’s energy consumption, but the more salient point is that Bitcoin’s system implicates both parties in these environmental misdeeds. We can’t ultimately evaluate Bitcoin Beach without also taking Riot Blockchain into account.

Sikka, because it runs on the Ethereum blockchain, has been using the same energy-draining method as Bitcoin, but is said to be moving away from that in late 2022, early 2023. That will be to Ethereum’s credit over Bitcoin, but it remains to be seen whether its new energy consumption will be more efficient than traditional financial institutions. Which, speaking of, brings up another valid consideration: traditional banks use all sorts of energy to power not just computers, but their offices around the globe and the cars their employees use to get to and from those offices. We digress, but the point is clear: comparing energy consumption between blockchains and Big Banking is easier said than done.

Meanwhile Sikka’s creators found that the system enabled them to cut operational costs by 78%. However, they are quick to demur: “this cost reduction is not a blanket figure” and was only measured for the small pilot with 105 participants. Nonetheless, they also expressed hope for “the potential of how Sikka can reduce costs for aid agencies to a significant extent” (source). Indeed 78% is significant. Even if the reduction, when Sikka was scaled up to serve 100,000 beneficiaries, ended up being 50% or 25%, that number is still a significant operational savings, making aid agencies better stewards of their time and money.

Value Beyond Market Caps

As you can see, market cap valuation is but the narrowest of ways to determine the value and cost of Bitcoin and Ether. These blockchain systems can profoundly rearrange how the social fabric is woven together. While crypto may decentralize traditional banking, a huge motive for Bitcoin enthusiasts, it increasingly centralizes energy companies. Crypto can provide liquid assets that create microeconomies for marginalized people, but it does so by centralizing digital devices and data plans that, for many families, have become “another mouth to feed.”

Whether trading one center for another will produce a more just future is anyone’s guess. In all likelihood, the systems will continue to accrue wealth to the rich at the expense of the poor. Instead, we will need innovators like Mike Peterson and El Zonte’s Bitcoin patron and the people at World Vision’s Nepal Innovation Lab to continue seeking ways to bless others — through these systems where possible, and outside these systems as necessary. No doubt these systems will continue to transform how people do business. But just as assuredly, innovative Christians will continue working to transform these systems, creating economies — both big and small — that promote good stewardship, Christlikeness, and love.

Adam Graber co-hosts the Device & Virtue podcast. He consults on Digital Theology for FaithTech and Leadership Network, and is a coach at Wheaton College’s Center for Faith and Innovation. Connect with him on Twitter @AdamGraber.

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