If a nuclear war or deadly pandemic suddenly rocked the globe, would we suddenly all flock to Bitcoin? To put the matter simply, it is hard to say. But decentralized non-fiat currencies are adaptable in ways that others are not.

Imagine it. An event of seismic proportions suddenly rocks the globe. It could be a new financial crisis that makes the crash of 2008 look like a brief market correction. It could be a catastrophic invasion of a country that ruptures the global economy. (An invasion of Taiwan by China, for example.) Or it might be a pandemic many times deadlier than COVID-19. Or even a nuclear war. Regardless of what causes it, let’s picture a world that is profoundly destabilized. Perhaps unrecognizably so.

Could we use the world’s most famous cryptocurrency in the event of an apocalypse? Well, that depends on your definition of an apocalypse. But the short answer is probably, yes.

The Bitcoin network is made up of a series of nodes. (You can actually see a list of the world’s reachable nodes here. Although this is only a conservative estimate of the actual number.) The job of each node is to verify each transaction and block. As Bitcoin is built on an immutable blockchain, it requires each transaction or block to be in line with the rules of the Bitcoin protocol. 

If a transaction or block does not follow the rules, the node will reject it, preventing it from being added to the blockchain.

The good news is that the Bitcoin network needs relatively few nodes to operate effectively. Essentially, any apocalyptic scenario would have to wipe out virtually every single node to render the network unusable. In the unthinkable event of a nuclear war, where large parts of the planet become uninhabitable, there is a strong likelihood that many Bitcoin nodes will go permanently offline. (Especially once you consider very few of us keep our computers in a nuclear-proof bunker.)

An event like this may make it harder to validate transactions and blocks. Fewer nodes would also make the network less decentralized and more prone to manipulation. But, fundamentally, the network would survive, and new nodes would inevitably follow.

Bitcoin is a digital currency that was born on the internet. It would not have been invented without it. But would it survive without it?

Put succinctly, yes. 

As of 2018, there is a solution should the internet suddenly become unavailable. Blockstream operates a network of communication satellites that broadcasts the Bitcoin blockchain globally. It allows people without internet access to receive validated transactions and blocks. The network is completely free to use, although you do need a computer and an antenna to gain access.

There are also some other drawbacks. At the time of writing, it does not provide universal coverage. There are some notable dark spots, including much of Siberia, Iran, the Arabian peninsula, the Caucauses, much of western Russia, parts of Central Asia, and the island of Madagascar. 

You can also send your Bitcoin over a mobile network. Last year, South African developer Kgothatso Ngako launched a new SMS-based service called Machankura that allows users to access Bitcoin using their feature phones without internet access. 

The service uses the GSM network to allow users to send and receive Bitcoin by dialing a number and entering a five-digit pin, thereby effectively creating a Lightning address. However, Machankura is a custodial service, which goes against the Bitcoin ethos of “not your keys, not your coins.”

So we’ve established fairly concretely that Bitcoin could survive an apocalypse. But would we use Bitcoin? That is a much harder question to answer.

The first barrier to Bitcoin becoming a de facto world currency in the event of a cataclysm is the current state of Bitcoin adoption. Glassnode puts the number of active Bitcoin addresses (i.e., those that have recently sent or received funds in BTC) at approximately 1 million as of March 17, 2023. That is approximately 0.0125% of the world population and far too low of a number for a fair analysis.

TripleA estimates that crypto ownership is at roughly 4.2%, which is a much better figure. (I am assuming that all crypto owners are familiar with Bitcoin.) That still leaves 95.8% of the world population that does not own any cryptocurrency. Even if we assume that 20% of the global population has used crypto at some point in the past, that still leaves 80% who have essentially no familiarity with this technology. 

That lack of familiarity will affect how many people use crypto as a store of value or to transact. It will also severely limit the number of vendors accepting it as payment. In Vietnam, where nearly 20% of the population owns crypto, this might be a hurdle that can be overcome. In the UK, a country where 6% own crypto and that has its own reputable, widely-used fiat currency, the prospectus is less convincing. 

Of course, this analysis assumes that a cataclysm would not completely eradicate people’s trust in fiat currency. (A big assumption, but not wholly unbelievable.) 

However, there are reasons why Bitcoin might win out in the end. Bitcoin is considered highly secure because of its hashing algorithm, SHA-256. The algorithm creates an enormous number of possible hashes, with the odds of manipulation or duplicate hashes being less than one in 115 quattuorvigintillion. More than the number of atoms in the known universe, making Bitcoin virtually unhackable.

It also operates on a decentralized network, not controlled by any central authority or government. If traditional institutions no longer command trust, this would be a huge boon for the currency. It is also censorship-proof and will remain open and accessible, even in the event of a global dictatorship.

Unlike currencies issued by a central bank, Bitcoin has a limited supply of 21 million coins, which means that it cannot be inflated or devalued. In a post-apocalyptic world where traditional fiat currencies may become worthless due to hyperinflation, Bitcoin could start to look like a much safer bet.

The post Can Bitcoin Serve as a Global Currency After the Apocalypse? appeared first on BeInCrypto.

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