Can Crypto Help in Rebuilding a War-torn Nation?

  • March 24, 2022
  • Jennifer Moore

The Russia-Ukraine conflict is a painful reminder of geopolitical instability and failing relations leading to widespread destruction of human lives on a scale unprecedented in modern times. The Ukrainian army is putting a spirited opposition against Russian forces as the Zelenskyy-led government opened up to digital asset donations for humanitarian relief and sustaining the resistance. Global crypto donations for the Ukraine cause have scaled over $52 million. This gives rise to an interesting thought- How much can cryptocurrencies contribute to the rebuilding development of a nation that has witnessed the horrors of war?

Is Cryptocurrency the Solution for Post-War Revival?

The global crypto community expressed solidarity with the people of Ukraine, offering support in multiple ways. The government accepted around $34 million in Bitcoins, Ethereum, Shiba Inu, Polkadot, and TRON. 

A national economy comprises countless factors for consideration. From manufacturing and productivity, banking and finance, purchasing power parity, human resource development, technology, infrastructure, healthcare- the list goes on and on. 

The motive behind the genesis of Bitcoin, the world’s cryptocurrency, was to develop an efficient alternative to fluctuating fiat valuations following the Great Depression in 2008-09. The subsequent progress has been exponential with global crypto trading market capitalization scaling past $1.8 trillion and daily trade volumes standing at $87.28 billion. Multiple nations are racing towards becoming the global crypto capital investing billions of dollars in research, development, and incorporation. 

Traders can now invest in highly volatile assets as well as relatively secure USD-backed stablecoins. Nations with poor banking infrastructure utilize crypto payment processing options to payment transfer at fractional costs. Crypto remittance options are ideal for expatriates to transfer hard-earned money to families in their homeland, allowing them to skip processing charges as high as 25%. The payment option is already popular across nations in Africa, Asia, Latin America, and the Middle East.

The global crypto landscape has also opened the doors to decentralized finance(DeFi) and upcoming innovations like Metaverse and HyFi(Hyper Finance) reducing the need for intermediaries between transactions. All the aforementioned crypto features can contribute to the revival of a nation’s economy. Ukraine’s high crypto adoption also helps matters. However, it is blockchain i.e. the underlying architecture behind cryptocurrencies that plays a more significant role in the effective implementation of decentralized economies.  

Also Read: Crypto Donations for Ukraine Aid Increase Each Day, Crosses $52 Million

Blockchain’s Role in Rebuilding a Nation

Over 100 government-based blockchain projects are currently in operation or development. Contrary to other disruptive technologies, Blockchain is similar to social organization highlighting the need for consensus. The consensus part is generally reserved for human decision-making. Decisions once finalized by the majority are permanent and irrefutable upon entering the blockchain network.. As Lessig’s proposition states, “Code Is Law.”

Also Read: Role of Blockchain in Providing Efficiency and Transparency in Supply Chain Management

Blockchain Governance

The absence of a central authority allows blockchain to deliver services much more efficiently than conventional bureaucracy. Both feature prewritten frameworks of regulation. Both validate and attest data only after validation, promoting transparency and trustworthiness.

Research suggests 5 laws to be adhered by for blockchain governance:

  1. Drafting and enacting Blockchain Statute Legislation.
  2. Transparency in source code and data disclosure.
  3. Incorporation of autonomous executive administration.
  4. Developing a governance system around direct democracy.
  5. Creating Distributed Autonomous Government(DAG).

Applications

Multiple nations have already implemented blockchain frameworks for government projects. Estonia has incorporated blockchain for the issuance of e-ID citizen identity verification. Electronic voting systems powered by blockchain are currently in the development stage across nations such as Australia, Estonia, and Ukraine. Blockchain is being considered for the management of land registers in Georgia and Honduras. The US utilizes blockchain for secure sharing for confidential medical records, while the UK is conducting R&D for blockchain-powered public services. China announced plans for the construction of a Blockchain City. The Indian government announced building a National Blockchain Framework and incorporating the technology in multiple official processes.  

DAOs & NFTs: Crypto Crowdfunding for Philanthropy

There are countless ways blockchain contributes to the overall improvement of not only business operations but also society as a whole. Decentralized Autonomous Organizations(DAOs) built using blockchain smart contracts are often used for philanthropic purposes generating crypto donations for people in need. Russian punk-performance collective Pussy Riot co-founded the UkraineDAO and donated US$ 6.5 million generated through NFT sales. Peer-to-peer decentralization features of the blockchain DAO facilitate collaboration for completing utility projects and platforms for freelance job platforms, cancer research, and environmental protection. Trippy Bunny, a non-profit NFT built on the Solana platform, donated $220,886 for suicide prevention in the US. 

Wrapping Up

Cryptocurrencies in combination with rapidly expanding blockchain technology can make a significant contribution and alleviate failing economies. War-torn nations can utilize both technologies to collect resources and set up infrastructure for future revival in addition to optimizing governance.

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