How Crypto Is Helping People Affected by The Ukraine-Russia War

“War, what is it good for? Absolutely nothing.” The lyrics to the Edwin Starr song stand the test of time, and today ring true as the world looks on to the Russian invasion of Ukraine.

What does crypto have to do with the conflict in Ukraine? Quite a bit. 

In the first week of the invasion, Bitcoin and other cryptocurrencies have been donated in support of the Ukrainian people. If there was a use case for cryptocurrency providing a benefit outside of finances, it is now on full display.

Crypto is being used to support the Ukrainian government and people on the ground. While Russians civilians are looking to crypto to hedge against the devaluation of the Russian Ruble. Crypto is fulfilling its intended purpose – it is giving people opportunities outside of the traditional financial markets.

In this edition of Netcoins Progressive Investor, we’ll explore the the role cryptocurrencies are playing in helping Ukraine fight for its sovereignty, and in helping Russian civilians trying to live their everyday lives without being at the mercy of hyperinflation and devaluation. 

Let’s dive into the intersection of cryptocurrency and the real humanitarian use case of cryptocurrency helping people on both sides of a devastating conflict.

How Crypto Is Funding Ukraine Relief Efforts

In conflict, lines are drawn in the sand and sides are chosen. The global community has come out to support Ukrainian sovereignty and peace. Several artists, companies and celebrities have been at the forefront in raising funds for relief efforts. Roughly $60 million has been raised in cryptocurrency alone in a short period.

The invasion of Ukraine by Russian forces is furthering crypto adoption as traditional financial instruments have been rendered less than helpful. Ethereum based NFTs are being used as the preferred vehicle for raising funds.

RELI3F is a web 3.0 crowdfunding initiative led by artists within and outside Ukraine. The NFT sale sold out in 30 seconds, raising over $2 million. RELI3F is committed to transparency with 100% of funds going towards humanitarian relief.

Several other crypto-based crowdfunding initiatives are getting into the mix, and in some cases, the funds will purchase arms.

UkraineDAO, led by the Russian Art Collective and dissidents of the Kremlin (a rockband who’s name is not safe for work), sold and purchased a single Ukrainian flag NFT. Over 3,000 donors made it possible for the DAO to purchase the NFT from itself using the platform Partybid. 

Ukrainian brothers and former heavyweight boxing champions Wladimir and Vitaly Klitschko (Vitaly also the Mayor of Kyiv),  are raising funds with an NFT collection.

With over $65 million raised to support Ukraine via cryptocurrency, the use case for crypto in times of crisis is genuine. It is helping both Ukrainians living in a warzone and regular Russian civilians trying to make ends meet in a country filled with political and social censorship where the economy is quickly plummeting due to global economic sanctions.

Russians Civilians Turn to Crypto Amid Global Sanctions

As the conflict continues for weeks, it is vital to separate the actions of the Russian government from regular, peaceful Russian citizens. Worldwide, governments have been quick to impose sanctions on the Russian economy to pressure President Vladimir Putin and Russian oligarchs to reverse course.

Economic sanctions have been and continue to be used as a tool in warfare. Indiscriminate violence and indiscriminate economic policies impact regular people. One can argue the utility (or futility) of sanctions in pushing state actors to buckle under pressure.

There are fears Russian authorities are looking to crypto to sidestep sanctions and find ways to fund the military. With this rhetoric, crypto is an easy target to try to limit. For example, the Ukrainian Vice Prime Minister and Minister of Digital Transformation, Mykhailo Fedorov, calls for cryptocurrency exchanges to ban wallets held by Russians, which has not been very successful compared to traditional financial sanctions and restrictions. Although some exchanges can identify the wallet addresses of some individuals close to the Kremlin, they will not ban all Russian wallet addresses.

The collapse of the Russian Ruble in recent days demonstrates the effectiveness of halting demand for a specific currency. It should come as no surprise Russian civilians are turning to crypto to hedge against currency devaluation, as Russia accounts for 11% of the global Bitcoin mining hash rate.

Crypto investors need not pick sides in the conflict. Just as cryptocurrency will ultimately supersede traditional finance, peace and love will always win over violence.

Economic Sanctions Are The Tool of Modern Warfare

Historically, economic sanctions are primarily a disappointment. They don’t necessarily achieve their intended aim but instead promote the unintended consequences of hurting civilians. 

As the news stream is filled with images of warfare and destruction, less attention is paid to the impact sanctions have on regular people. Everyday banking is not accessible in the way people are used to in Ukraine due to the siege. Russians are also limited from accessing traditional markets due to sanctions that have left the Ruble virtually useless.

As warfare has evolved from swords to gunpowder, and horses to planes, it is now moving to the stage of economic and cyberwarfare. Modern wars will be less about militaristic might and more about economic destruction and collapse. If a warring nation has to choose to fund its military or feed its citizens, it can put a state leader in a position to select empire or state preservation.

Cryptocurrency will be a tool for this new battleground. Russian banks are being banned from the global payment system, SWIFT, which will push financial institutions to find new, innovative means to maintain business as usual. Nothing spurs innovation and adoption more than a crisis. Russia likely planned for this type of scenario and attempted to create a different bank payment system outside of SWIFT. 

In the context of the current violence in Ukraine, while nefarious actors may use crypto to further their causes, onlookers can remain hopeful that some good tech will come out of it.

Crypto Opens Up Opportunities for Innovation in Times of Conflict

Cryptocurrencies are as numerous as their use cases. A cryptocurrency can only be as valuable as its uses. 

If cryptocurrencies continue to show utility by helping those in need, we can expect adoption to increase in 2022. Although in times of crisis, most people do not have the time to sit down and learn new tech, especially those individuals who are traditionally excluded from early adoption cycles.

The learning curve to effectively and efficiently use crypto may be too daunting of a task for those trying to shield themselves from bombs and bullets. As conflicts move more towards cyber warfare, the inexperienced crypto holder “may risk becoming a target,” according to Giulio Coppi, a digital specialist from the Norwegian Refugee Council.

Coppi’s opinion underlines many questions the blockchain might be able to answer in these unprecedented times.

What if those fleeing a conflict possessed an NFT that served as the deed to their property, land or other possessions that make it through times of war? 

How can conflict and climate refugees maintain their wealth when forced to flee overnight? Holding crypto may provide the avenue to keep wealth while crossing borders.

Logistically, it may be much easier to cross borders with value in a digital wallet than trying to smuggle 100lbs of gold. During times of crisis, refugees can often become victims while attempting to flee to safety. Investors cannot maintain their investments in a collapsed economy or state. If individuals can be their own bank, they can keep more of their financial well-being if all they have is the clothes on their backs.

Hopefully, there will be a peaceful resolution without further violence so the world can go back to being positively disrupted by crypto.

The Future of Crypto Post-War

Crypto enthusiasts who follow the ethos of equitable prosperity can remain hopeful that a better world will be possible from this conflict. Neil deGrasse Tyson’s 2018 book, Accessory to War: The Unspoken Alliance Between Astrophysics and the Military, presents examples where imperialism and war bring about innovation that ultimatelyl helps humankind.

Necessity is often the vehicle for change. In nature, the species that evolves first (and most effectively) survives and passes on the genes to thrive in their environment.

In terms of cryptocurrency, the Ukrainian government is ahead of the game as it has been funding and supporting cryptocurrency innovation at a national level. Ukraine has positioned itself as a global hub for tech, blockchain and crypto innovation. Although the destruction of infrastructure may temporarily halt these plans, Ukraine, like crypto, is showing to be innovative and resilient.

NFTs may prove the best tool for providing aid to provide relief in humanitarian crises. Crypto is the vehicle for exchange, and the coding is the underlying mechanism that makes NFTs possible. When the fighting stops and people can begin to rebuild their lives, investors can expect crypto to be a part of that journey.

Netcoins Keeps Your Crypto Safe, Even in Times of Conflict

We are currently witnessing more and more investors looking to Bitcoin and other cryptocurrencies to hedge wealth preservation from inflation and conflict. Most people do not look to crypto as a valuable tool during war and peace times. For better or worse, cryptocurrency and cyberwarfare are the future of our interconnected, digital lives.

If you’re interested in supporting humanitarian efforts via crypto, an excellent place to make your initial crypto purchase is Netcoins. If you have not already done so, sign up today for your free account.

You can fund your account via e-transfers. And you can transfer your existing crypto directly to your Netcoin wallet if you already own crypto.

Keep checking back to Netcoins to read more of the latest in crypto.