Risk Assessment – Cryptocurrency’s Vulnerability to Nuclear War

 

This article is provided for information and education purposes only and is not intended as investment advice. Readers are encouraged to do their own research and consult a professional before making any investment decisions.

 

 

Based on the findings of leading news outlets that have historically acted as an early warning mechanism for the public, global nuclear tensions appear to be at an all-time high and people are woefully underprepared. All-out nuclear war would instantly set civilization back 100 years. The initial blasts could kill billions. Those who survived would face food shortages, famine, infertile crops, and billions of tons of dusty smoke that would block out the sun. When coupled with an irradiated, uninhabitable environment, this recipe for chaos will all but entirely halt productivity. No productivity means no goods are produced, eliminating the need for any currency, let alone a digital one. The systems that support society would crumble, leaving only the arduous task of rebuilding while simultaneously tending to victims and trying to provide basic survival for oneself.

But what will happen to cryptocurrencies? Most will fail; this is undeniable. EMP's from nuclear blasts will render advanced electronics within its radius useless, and the circuitry of any device plugged into the grid will be destroyed quite literally at the speed of light. Surge protectors that are designed only to handle a lightning strike will do nothing to resist the much faster electromagnetic pulse as it makes its way through the power grid. In this event, most people will be too focused on basic survival to take on a task as grand as maintaining a cryptocurrency. The blockchains of these cryptocurrencies will stop when there are not enough nodes remaining, or if the miners stop hashing, as would be the case for proof of work cryptocurrencies.

 

Cryptocurrency's Risk vs Fiat

Surprisingly, the most vital portion of cryptocurrency's network infrastructure stands a good chance of survival if adequately prepared to withstand such an event. In the event of thermonuclear war, cryptocurrency's blockchain-based ledger stands a much better chance than traditional financial institution's ledgers, which are stored in a fractalized manner at various data servers, or even on paper in many cases. Compiling these records after a widespread nuclear incident could take weeks, years, or even decades depending on the amount of manpower available. Cryptocurrency's centralized ledger is more widely-distributed due to the nature of decentralized networks, making that data readily salvageable.

The US Federal Reserve maintains a backup failsafe in a nuclear proof underground bunker. However most of the banks they service have not taken similar precautions, and the US Federal Reserve system relies on their participation to continue functioning. So even though the Federal Reserve computers could survive a nuclear war, there is a good chance The Fed would fail due to lack of participation. Paper money and coins would also be destroyed en masse, as some of the most attractive targets aside from military installments will be large concentrations of commercial and industrial wealth.

Cryptocurrency on the other hand would rely on its users to maintain the network through such a disaster. A well-decentralized cryptocurrency can offer thousands of failsafes for a fraction of the price. Since every node operator must download the entire blockchain, they each have a copy of every transaction that occurred on the network, and knowledge of every balance of every address.  Cryptocurrency users will likely be storing their keys on CD's and DVD's, which are durable, water resistant, and slightly more heat resistant than paper keys when stored in fireproof containers. Hard drives, USB drives, or hardware wallets are all susceptible to electromagnetic pulse if not protected by a faraday cage (See - 10 Faraday Cages you can Build at Home). With that said, however, it never hurts to maintain the same keys in a wide variety of physical forms to mitigate risk, so long as they are secure from theft.

Current banking data protection standards are inadequate, and information is highly fractalized. You might even say they are centralized in all the wrong places and decentralized in all the wrong places. Cryptocurrency will prove to be the exact opposite. Since cryptocurrency's ledgers are more widely distributed, it is exponentially easier to restore network infrastructure once telecommunications are back up.  Fractional reserve banking and overly complex markets may be unrecoverable due to their immense reliance on data processing and storage. Allocating human capital to restoring such systems would be a low priority when faced with a widespread mass casualty incident. It should be noted that these systems are so hyperconnected, that even some experts are unsure if they would continue to function at all should a sizeable portion of that market be wiped out in a short timeframe.

Aside from other items of value that are readily tradable in times of financial crisis such as food, alcohol, basic healthcare provisions, ammo, and precious metals; cryptocurrency will likely be one of the first mediums of exchange to resume operations after disaster (providing restoration of communications). Some people will likely continue to rely on their local paper money, but only cryptocurrency's decentralized nature will allow for rapid global capital distribution. Meanwhile, traditional banks would likely still be working on satiating outraged customers and salvaging what they could of their complex infrastructure.

 

Minimizing Damage to Economies in One Word - Blockchain

The most important factors to maintaining a successful blockchain after a nuclear incident are alternative power generation, decentralization of node software, knowledge of maintenance, restoring communications, as well as knowing how to protect vital hardware by using scaled up faraday cages for your server room to ensure it is intrinsically safe and well isolated. Unless you are the Federal Reserve or James Bond, and can afford an underground bunker, an improvised faraday cage will have to do.

Anyone can implement a blockchain to fulfill a wide variety of functions. Although many people will argue that the blockchain is lousy at functioning as a database, there is no arguing in its ability to preserve data. Any corporation, government agency, financial institution, or medical service provider, can back up their records and decentralize them using the blockchain. This can help act as a cost-effective failsafe, which will make it much easier to recover these systems in the event of disaster, and much more likely to survive the disaster itself. If the network fails altogether but the blockchain database file is kept intact, and there is still a working version of the software, another genesis block can be hashed and the blockchain can continue as normal.

 

Disclaimer

Although cryptocurrency does mitigate risk of losing transaction history, and makes global financial network restoration much simpler, it is no magic bullet. The estimated effects of a global nuclear war are grim to say the least, and rebuilding the infrastructure that society relies on will depend largely upon determination and ingenuity of the people. Food will need to be distributed, hospitals staffed, public works maintained, and work efforts well-coordinated. Level of coordination will depend on damage to communication infrastructure. If communications are totally wiped out, people will coordinate on a community level - dividing and conquering essential tasks. If people are unwilling to cooperate with one another, the economy may never recover, and the life of convenience we once knew will cease to exist.

 

Tips on Surviving A Nuclear Explosion and Fallout

https://www.ready.gov/nuclear-explosion

www.survival-spot.com/survival-blog/11-steps-to-nuclear-war-fallout-survival/

 

 

Reference - https://www.ncbi.nlm.nih.gov/books/NBK219185/

Author: Brandon Williamson

Education Director for DNotes and co-founder of DNotesEDU

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