Can Cryptocurrency Save Your Country? Crypto-Based National Security

Cryptocurrency

CryptocurrencyCryptocurrency might be a current concern for the government, but it can help with national security

Social changes like globalization, global economy, technological development, and Industry 4.0 presuppose a holistic approach to the issues of national security. Numerous scientists and researchers are investigating technologies that are going to change our industries. Cryptocurrency is a social-technological phenomenon, which determines many contradictory conclusions in the field of national security. First, the legal environment of this phenomenon is not regulated in many states; second, there are increasing trends in its turnover all over the world; third, it is identifiable as part of the critical infrastructure; fourth, cryptocurrency as a phenomenon causes problematic issues in the field of national security. 

Blockchain and crypto have proven themselves to be perhaps the most disruptive technology since the development of the internet, with applications and use cases still being discovered daily. With such fundamental disruption, there will invariably be some dislocations and changes to the status quo, but that is not the equivalent of being a national security risk. Rather, the continued development and proliferation of crypto assets brings with it the potential for new and innovative applications across virtually every economic sector.

An additional strategic asset and benefit of blockchain-based transactions is the security and encryption that conducting business in such a manner provides. High-quality data is the lifeblood of every organization, and every decision requires high-quality, reliable, and comparable information to make well-informed decisions. Framed in that light and context the case for supporting the adoption and implementation of blockchain and crypto applications should be an easy one to make.

National security is a term often used (and misused) to justify policies of surveillance, military deployments, technologies, or other legal implementations. In its most benign form, national security is a defensive stance aimed at ensuring the safety, stability, and sovereignty of a given jurisdiction, and is a stepping stone towards a more equitable global power distribution and possibly peace.

As the Bitcoin network grows from an internet curiosity to a global settlement layer that’s open to all – potentially even sanctions evaders like Russia or North Korea – nation-states may come to realize they want a greater say in the direction and overall operations of the network. To this end, having a stake in the global hash rate is key. By fostering, rather than banning domestic mining industries, nations can also ensure that control over the network does not fall into the hands of their enemies.

Crypto assets and the underlying blockchain technology certainly are tools and applications that are reshaping, as we speak, how individuals and institutions do business and interact with each other. That said, it is critical to not view these disruptions as a threat or risk, but as an opportunity that should be supported and nurtured. Crypto certainly is a national security issue, but it’s an asset and not a threat.

Nonetheless, while Bitcoin’s decentralized nature affords it its status as the most secure network in the world, its security would be severely compromised if, say, a given miner – perhaps acting on behalf of a state actor – were to gain the majority hash rate (i.e., 51%). Technically this would open the network up to the potential for censorship of other miners and transactions and similar forms of overreach.

As the global community of investors in bitcoin continues to expand, the significance of having hash power grows daily. As do the risks of not having it. That makes mining bitcoin a matter of national security.