War, What Is It Good For?
Mar 4, 2022
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The idea we would see another conventional war in our lifetime was a low probability event. Global interdependence and as Thomas Freidman described it, a “flattening of the world,” all but seemed to have removed the threat of another large scale war. But here we are. And there are few things man does better than create new instruments of death which makes the horrors of the current situation all the more devastating.
However, commenting on the politics of what’s happening isn’t what we’re here to discuss. Rather, in this forest fire of destruction, we’re looking for the green chutes that will inevitably grow. Specifically, we’re looking at what we believe could be a defining moment for DeFi.
The idea of decentralized finance was mainly an abstract, theoretical concept at best just as recently as a week ago. We knew it somehow involved utilizing blockchain technology in a way that would remove middlemen to conduct financial transactions and the fees they collect along the way. We knew it could speed up the process of getting money from one side of the world to the other. But how the practical application of the theoretical concept would actually play out was anyone’s guess.
Over the course of the last week, we’ve seen a spike in many crypto assets. Despite being well off their highs of last year, crypto assets became a “safe haven” investment when equity prices began tumbling. Until now, crypto was largely seen as an asset for speculation and not much more. But now we’re seeing a number of fundraising campaigns using crypto to purchase “guns and butter” for Ukrainians.
One of the biggest questions plaguing crypto has been, “what does it solve for?” We’re getting that answer in real time. With ATMs largely non-functional in Ukraine and Russia; banks closed or destroyed; and all access to fiat currency severely limited at the moment, crypto has been given its moment. It has been able to act as a currency for those in need. And while the circumstances under which it has been given its moment are horrific, it’s difficult to imagine when all this ends anyone wanting to go back to more traditional fiat currencies and the numerous encumbrances that come with them.
At a humanitarian level, war is heartbreaking. It is devastating. There are no winners, there are just those who lose less. At an economic level, war often does have winners. In the more traditional sense, natural resources and goods that can be sold to markets have been the spoils. But in the first conventional European war of the 21st century, the biggest winner may prove to be cryptocurrency.
Written by Dylan Ratigan and Josh Fabian
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