How Useful are Bitcoin and Other Cryptocurrencies During War?
The extreme point of clarifying relationship between countries is war. For either sides, military actions are accompanied by heavy casualties and terrible events. But, even during a ruthless war, the price of money did, does and will exist, always and everywhere. So, what about the value of Bitcoin and other cryptocurrencies during military activities? The Coin Shark will tell more about that. The value of currency at war During military actions, the economy of the feuding states is, to put it mildly, go through difficult period. At the same time, there is a high probability, that the currency of the losing side will depreciate all over the world. In this case, people are moving towards gold and other precious metals. The value of Bitcoin at war All advantages of the cryptocurrency are still not open. Therefore, it is difficult to define clearly the value of Bitcoin during war. Also, due to number of military restrictions, it is completely unclear whether it is realistic to use cryptocurrency at “cold period”. Probably for the best, that it is not known and not verified by anyone yet. Obviously, it is not time yet, to come to change checked up for centuries gold for innovative Bitcoin. Why Bitcoin isn’t gold? Gold is the most effective and the safest means which it’s worth transferring your capital into when the nation currency depreciates, which is normal during and after war. Even with inflation, the value of gold do not decrease, but even grow. Which cannot be said regarding Bitcoin. After all, the value of cryptocurrency is increased by investments, which during war is inappropriate and futile. Of course, people chose Bitcoin as an investment object where peace and stability reign. Since this is the best tool for quick cash. But when the economy begins to “totter” or martial law is in the country, investors return to traditional assets, as their reliability has been verified by history. Among crypto investors, it is trend to call Bitcoin as digital gold. However, this option is not supported by all. Charlie Morris, Chief Investment Officer of Newscape Capital, said in the interview with The London Bullion Market Association (LBMA) that it’s not appropriate to compare gold with cryptocurrency:
«Gold is a store of value that will last forever. Bitcoin, on the other hand, is something that is young and speculative. [Bitcoin] is very exciting, but the comparison with gold has been overdone».Morris explained, why people often compare two oppositely different currencies:
«The bitcoin network was designed around the idea of gold. That is why they are so similar».During the interview, the investor told, in which cases the community prefered Bitcoin and in which gold:
«In a strong growth environment, where all is well and speculation is rife, no doubt the audience will be voting for bitcoin. However, in the adverse scenarios, such as inflation, nuclear war, or even socialism, I suspect most of the audience will favor gold over bitcoin».Digital currency loses to gold, as people are not using it so actively yet, which will increase the value:
«If people stop using bitcoin, then its value will decline. And therefore, in an environment, which is suppressive or disrupting, it is less likely that network will be so strong,» – said Morris.