What would happen to cryptocurrencies if WW3 broke out? How could crypto exist during the nuclear war? Maybe it is better to invest in gold until it is too late?
Bitcoin and other cryptocurrencies are often seen as the best long term investment.
Crypto enthusiasts have no doubt about that.
No matter what happens to the world economy, the US dollar or gold and silver, the cryptocurrency will be valuable because of all those digital technologies rising. Because of the Metaverse emerging as the new era of the global economy.
That’s what crypto fans often say.
And since the beginning of the Russian invasion to Ukraine crypto seems to be nothing but the savior of the economy. Crypto is used to finance the Ukrainian army. Crypto helps Russians to avoid Western sanctions. NFTs auctions gain enormous amounts of money for charity. Crypto is evidently rising as a way to transfer assets without borders and limitations.
But what could happen to Bitcoin and other crypto if the most terrible nightmare of our time comes true?
What if the Russian-Ukrainian conflict only precedes the infamous World War III?
What if things go terribly wrong and NATO will be engaged in a full scale conflict with Russia including mutual nuclear attacks and mass destruction of entire cities and possibly countries?
What assets would we rely on then? Previous global wars have shown that paper money emitted by the sides of the conflict become obsolete and depreciates rather quickly.
Hm, is it the time for Bitcoin and other cryptocurrencies to shine?
Or will we get back to gold and silver as the most reliable assets?
Is WW3 actually possible?
Mad Vladimir Putin is holding his finger over the red button. That’s the only thing that makes him so terrifying. Otherwise his days would be over.
The West is not ready to fully confront the bloody tyrant. It is easier and safer to fight with Putin somewhere in the steppes of the Ukrainian East. Just give those Ukrainians more and more weapons and hopefully they will withstand the invasion, the war will be over and that’s the end of the story. That’s what they think.
It seems though that Putin has already crossed the line. Russia is in exile, cornered and hopeless. Things are never going to be the same again.
Putin is to be overthrown by some forces inside the country. Or his bloody reign is going to be accompanied by all kinds of military conflicts till his last days.
That’s all because Putin has built Russia around the ‘us vs them’ idea.
No war, no Russia any more. It is that simple.
So World War III is definitely on the table. Probably a nuclear war with massive devastation of both military and civilian infrastructure.
What would be the fate of Bitcoin and other cryptocurrencies then?
What would happen to Bitcoin in WW3?
The question is rather complicated as it might be divided into a few separate questions.
So it would be fair to answer them separately.
How would Bitcoin and other crypto be treated during war depends on the overall economy situation. But technical issues might be a serious problem. Crypto requires electricity and mining to function properly. Both are rather questionable during hypothetical WW3 when nuclear weapons are presumably used left and right.
So the big questions are: could crypto be still accessible during WW3 and if it was would it be able to compete with gold as the way to preserve your wealth?
Let’s try to answer both questions.
Would there be a need for crypto in WW3?
We have already seen what happens to fiat money during war. Banks with all their ATMs and officts might stop functioning leaving you cashless and making your gold and platinum card useless.
Governments can easily prevent banks from giving out cash, selling different currencies or accepting payments of different kinds.
Government might simply block all the banks. If the territory is captured by another belligerent, your old money might become obsolete as well.
It is a common practice for military regimes to implement temporary money or payment methods during war. Like, for example, grocery or fuel cards. Yes, there were cases when the population in the military zones had to ditch money at all being able to buy food and other commodities only with some kind of money surrogates.
And even if we take a much less pessimistic scenario we could see great uncertainty rising and high inflation risks. Just look at what happened in Ukraine in the first few weeks of the Russian invasion. The prices for all kinds of commodities went skyrocketing, with fuel and even bread becoming a sort of luxury.
Bitcoin is here to save
Well, crypto seems to be a kind of savior in such a situation. If you are able to make peer-to-peer payments with no third party required, no state or military organization could prevent the crypto economy from existing. Bitcoin was born for this, to say the least.
A decentralized payment method, secure and stable, could theoretically withstand any political regime.
So it is fairly easy to conclude that Bitcoin and other cryptocurrencies could have their finest hour amidst the hypothetical WW3.
The price of Bitcoin might rapidly increase as it appears to be the best way to transfer assets. Crypto might soon become the main financial instrument used by ordinary people. With no banks required and fiat money becoming useless the role of the government in the financial sector might degrade.
That’s a great scenario for Bitcoin holders, right? And also Bitcoin seems a much more flexible and valuable asset than gold.
Because you can’t use gold for everyday payments. Gold is a little hard to carry around. There is no way you can pay for a piece of bread or a gallon of fuel with a gold bar. What would you do, slice it a bit in a grocery store?
With BTC you can easily ‘slice’ it even to a few satoshis and thus pay for something small and rather cheap.
But what about long term savings?
Let’s say you are trying to preserve your assets in light of the coming WW3. What should you invest in - Bitcoin or gold? Well, gold seems fairly good as a long-term asset. All you have to do is keep your gold somewhere safe. As soon as the war is over your precious metal will be there to help you get through hard times.
Bitcoin and crypto is also a great asset to keep for a long time. It is even easier and somehow safer to keep in the times of uncertainty. Because all you need is a smartphone or a small hardware wallet (it is about the size of a flash drive). In some cases you don’t even have to own a smartphone, all you need is just a key phrase from your non-custodial wallet. Or a username and a password for your account on the crypto exchange.
If you need to flee or cross the borders with your family and children carrying gold is not the best decision. You might be required to declare it, the customs might not let you bring it to the country, it might be taken from you or simply stolen.
A smartphone or a small flash drive in your pocket gives you better chances to get away with all your crypto to a safe place. If your wealth is stored in the cloud, chances are you might successfully access it from any place in the world. Millions of those who escaped from war know how important that could be.
What could happen to Bitcoin technology during WW3?
Up to this point, everything has indicated that in 21 century Bitcoin is a more preferable way to store your wealth than gold.
But here comes the most interesting part.
All the advantages of Bitcoin disappear when it is time to discuss the potential technology issues during a full scale war. And we have to assume that WW3 might be terribly destructive. Massive missile hits from both sides, widespread use of means of jamming radio signals, cyberwar, hacking and presumably nuclear strikes.
That’s a very probable scenario. And while it looks dreadful from any point of view, within the framework of this article, it is necessary to emphasize that crypto will be extremely vulnerable.
Simply put, Bitcoin might be absolutely useless during WW3 simply because there would be no electricity to mine crypto and no internet to carry out transactions.
Of course, huge data centers of the biggest cloud platforms like Amazon or Microsoft might survive even quite harsh times. But it is difficult to imagine how you would use Bitcoin for transactions while there is no network available and no mining is being done.
And we must not neglect the worst scenario in which massive nuclear strikes destroy most parts of civilization and all the crucial infrastructure. Nuclear explosions are accompanied by electromagnetic waves of immense power. Those are able to interfere with electronic equipment just as solar flares often do.
Terrible consequences of such events include power shortages, malfunctions of the miscellaneous equipment etc. If a nuclear explosion happens not far from a data center all its equipment might fail irrevocably. The data will be lost.
Of course, multiple crypto network’s nodes might survive WW3. So the data on the blockchain will be restored once the war is over. But what would be the price of Bitcoin afterwards assuming it proved to be of no use in the times when people needed it the most?
All of that tells us that cryptocurrency might not survive WW3 or become almost useless afterwards up until the internet and its infrastructure aren't recovered.
Bitcoin vs Gold in WW3
To sum up, both Bitcoin and gold have their pros and cons in the hypothetical World War III.
Bitcoin pros
Bitcoin as well as other cryptos might fight inflation Bitcoin will allow for peer-to-peer payments in times of uncertainty Crypto can be stored in the cloud so that you don’t need to carry anything with you while crossing international borders etc. Crypto makes instant payments abroad very easy and invisible to governments, banks and other third-party structures
Bitcoin cons
All cryptos heavily rely on technologies (data centers, internet etc) that might be partially or fully unavailable during war In the worst-case scenario of the large-scale war the crypto infrastructure can be destroyed to such an extent that it will be impossible to restore it. All the crypto wealth will be lost forever.
Gold pros
Gold is gold, it has been the most valuable asset since ancient times, it will be such an asset forever. Even with the most terrible development of events, the fragments of civilization after the war will value gold. Everybody knows what gold is, it has traditional value, it known internationally No technology is needed to store gold or transfer it besides human hands, pockets or bags.
Gold cons
Gold is not suitable for small transactions and payments Gold is hard to carry and you need a safe place to store it Gold can be easily stolen or taken from you So if you are seriously thinking about preserving your wealth in the light of hypothetical WW3 take all the above into consideration.
If you do not believe full scale nuclear war is possible - or if you just refuse to believe in the worst-case scenario - you might better stick to crypto. Bitcoin is easy to handle and reliable. It might become the mainstream payment means of the future. It’s a good investment in the light of an upcoming hypothetical war.
If you tend to think that worse comes to worse and what we have now in Ukraine is something like Germany occupying Czech Republic in 1938 (the WW2 followed just after that) then you should consider investing in gold.
Gold is a more troublesome tool. But chances are it will survive the nuclear holocaust better that cryptocurrencies. Gold requires nothing but simply a place for storage, while Bitcoin and other crypto is built on top of a complex digital industry that is very vulnerable to severe shocks that WW3 would inevitably bring.