Can Bitcoin become a weapon of war in the ongoing Israeli Palestinian conflict?

Dec 08,2022
Can Bitcoin become a weapon of war in the ongoing Israeli Palestinian conflict?

Can Bitcoin become a weapon of war? First, Russia Ukraine, and now the Palestinians in the Gaza Strip are showing interest in Bitcoin and other cryptocurrencies. Although the answer may become obvious, there are still some practical problems in the use of passwords before and after the war. How does a war affect cryptocurrencies, whether at the state or national level? Geopolitical tensions have risen unprecedentedly, while the threat of potential war continues. The latest trigger is the unfortunate conflict between Russia and Ukraine. These examples show that cryptocurrencies such as Bitcoin play a vital role in the struggle for survival.

The Struggle between Russia and Ukraine

As the war continued, Russia's invasion of Ukraine shocked the world. These digital assets have been headlines since the invasion. The following is the performance of cryptos in the most terrible attacks since World War II.

Bitcoin prices fell after Russia launched its first attack on Ukraine as investors sold off riskier assets.

Although as Russian soldiers marched on Ukrainian territory, cryptos generally saw a sense of unity. This is evident in the figure above, considering the inclination.

A key reason behind the growth of digital assets is crypto donation, because there is no boundary limit to this approach. Ukraine managed to raise millions of dollars through these funding initiatives alone, according to Reuters.

Noor, a resident of Gaza, had nothing to do with Bitcoin until her cosmetics boutique was destroyed in the war with Israel in 2021. Later, she began to invest in cryptocurrencies to survive.

"When I learned to invest in Bitcoin and started selling cosmetics online, my fate changed," she said.

Dr. Tariq Dana, policy adviser of the Palestinian Policy Network Shabqa, believes that more and more local people have joined the ranks of encryption, because it is a way to get rid of Israel's financial regulation.

"I believe that Crypto's decentralized bank status is enough to encourage us (Palestinians) to earn income through a secure freelance platform," said Kareem, a Gaza resident who also invests in Bitcoin.

In addition, the survey also incorporated the views of Hesem Zuhail, a Palestinian businessman and a secret investor. When talking about this matter, he said: "I am sure that the fall in the price of Bitcoin has cost many traders in Gaza a lot, because their initial investment and capital are not as high as people think.

"Education and experience are critical to continuing to use crypto as a symbolic tool for online revenue space and Palestinian economic stability. A wrong call will result in a large loss of crypto profits." Despite these encouraging visions and data, there are always concerns.

Urgent problems

Mohammed Khaled, a business journalist in Gaza City, warned that although cryptocurrency opened the door for many Palestinians to profit from global trade, it was not a viable way for the Palestinian Authority.

"It is impossible to use Bitcoin for national procedures... The Palestinian crypto exchange system is centralized, which means that Israel can suspend deposits and withdrawals," he added.

These concerns may be true. The Israeli authorities seized $7.7 million of Bitcoin (BTC) and Dogecoin, which are believed to be used by Hamas, a Gaza based organization.

physical truth

During the war, fiat money was always hit. The ATM stopped working, and the government prohibited banks from allowing easy withdrawals, selling international currency or accepting different kinds of payments, resulting in no cash and no transactions for individuals.

In extreme cases such as invasions, local banks holding currency will become inaccessible. Money substitutes like grocery stores or gas cards are likely to be used to buy all necessities. The expected result is an increase in uncertainty and high inflation risk. As happened in Ukraine, basic commodities such as bread have become luxury goods. Encryption may be seen as a solution to these problems. Point to point payment without the participation of a third party can be regarded as an independent, uncontrolled solution. It cannot be controlled or prevented by any military organization or state government. A stable and secure decentralized payment method can resist any regime theoretically.

In general, encryption and other digital assets have begun to show signs of hope in the conflict between Ukraine and Russia, and millions of dollars of anonymous donations have been made using the borderless power of blockchain. Therefore, if this conflict is the beginning of the Third World War, it is reasonable to imagine that they will play an important role. Cryptocurrency may become a global currency in the post era, but it will also attract the attention of hackers. Therefore, even after the war, network security will still be the top priority.