On 24 February 2022, the Russians invaded Ukraine, and what we now know as the Russo-Ukrainian War began. A war that affects the rest of the world directly or indirectly has considerably affected cryptocurrency.
Introduction to crypto and Blockchain tech
Cryptocurrency is a digital currency, first founded in 2009 and has risen over the years to become of immense value. It is still predicted to evolve for more uses in the future. The digital currency is protected by cryptography; derived from Kryptos, which means hidden in greek, allows the layman to understand how secure this communication technique is, making it very difficult to fake.
Mining farms can mine cryptocurrency (a process that confirms transactions) to the blockchain or can be purchased. It does not rely on any third party (for example, banks) to confirm transactions.
There are several cryptocurrencies in today’s market like Bitcoin, Ethereum, Litecoin, and Ripple. Coins other than bitcoin are called altcoin to differentiate them from the original. A lot of currencies are built on blockchain technology.
The Blockchain is a shared ledger shared amongst other network members, called nodes. . It is a ledger that stores data to prevent historical data from being changed because of a chain of trust. One of the most influential blockchain trends is Decentralised Finance(DeFi).
What is DeFi
Among the most transformative breakthroughs of blockchain technology is the DeFi system peer-to-peer payments. It uses a blockchain technology network structure to run its technology.
With DeFi, classic financial products such as loans and investing are reimagined by removing the intermediary.
Governments and banking firms regulate traditional finance services, while DeFi is a fully decentralized and international form of payment.
It is common for funds to be held in a savings account under such a controlled or centralized monetary system, which financial firms manage. Whenever you use a card to make a purchase, a 3rd party intermediary charges a fee. An institution’s cost for keeping your money and conducting a money transfer is also charged.
It can take many months to get a loan under a controlled monetary system, which is a major drawback. In addition, the credit is only guaranteed once your credit rating and record have been approved.
Centralization of the monetary sector makes it more difficult, time-consuming, and costly to transfer funds. This is why there are several benefits to DeFi.
As of today, the value of bitcoin is about $42,690. The crypto market has a volatile nature and is unpredictable, and it is known to fluctuate; therefore, investors are advised to research and get acquainted with the market.
Other coins such as Ethereum run closely in value to bitcoin at a market value of $3,232 today. All cryptocurrencies attest to have varying purposes and specifications.
A brief history of the Russia Ukraine conflict
After the Ukrainian Revolution of Dignity, the conflict between Russia and Ukraine goes as far back as February 2014. It originally centered on a fraction of the Donbas and the status of Crimea.
Navy skirmishes, privacy violations, and political upheavals have all occurred within the previous two years of fighting between Ukrainian and Russian-supported separatists in Donbas. The crisis grew significantly due to the Russian army’s increased activity toward the end of 2021.
The President of Ukraine, Viktor Yanukovych, was ousted in February 2014. This was after the Ukrainian government rallies and uprising, which led to Russian agitation breaking out in regions of Ukraine.
By seizing ownership of key places and facilities, Russian soldiers captured the Ukrainian Legislature in Crimea without emblems. Russia held a heavily condemned national vote that resulted in Crimea becoming a part of the Russian Federation.
After that, Crimea was invaded and occupied. When Russian protests in Ukraine’s Donbas geographical area turned violent in April 2014, the Ukrainian army was forced to go to battle with separatists in Donetsk and Luhansk republics, which Russia supported.
Unlabeled Russian military automobiles entered the Donetsk republic in August 2014. While Russia attempted to conceal its participation, an unofficial war broke out between the Ukraine forces and separatists in the Russian Army. Efforts to bring the discord to a halt failed over and over again.
Russia and Ukraine approved the Minsk II agreements in 2015, but they have yet to be developed and completely implemented because of a multitude of disagreements. At the end of 2019, the Ukrainian government announced that 7% of its territory were only momentarily occupied areas. Whereas the government of Russia unofficially admitted its forces’ existence in Ukraine.
There had been a large Russian military presence all over Ukraine’s territory in 2021 and in the beginning of 2022. While Russia has tried to deny any plans for an attack, NATO alleged it nonetheless.
The President of Russia, Vladimir Putin, has called NATO’s expansion a danger to Russia and requested that Ukraine be disqualified from enlisting in the military alliance at any point in the future. He also mentioned that the Soviet Union formed Ukraine.
On February 21st, 2022, Russia acknowledged the two Donbas states and publicly moved their army into the region in an attempt to restore order. Russia penetrated Ukraine just three days after this event.
Russia’s behavior in Ukraine has been widely criticized by world organizations, with many chastising it for committing war crimes and defying Ukrainian autonomy. After the 2022 intrusion, numerous nations imposed crippling economic sanctions on individual Russian citizens and companies.
Folks are probably wondering what exactly makes cryptocurrency so beneficial, provided how turbulent it is. On just about any specific day, Bitcoin can rise or fall by as much as five percentage points or even 10 percent in value. The valuation of lesser cryptocurrencies can fluctuate more widely.
Producers and consumers dictate the worth of cryptocurrency, like any commodity that individuals want—the value of the asset when demand outpaces supply. Once demand outstrips supply, the valuation of a cryptocurrency soars.
Because of the war, Ukraine citizens have turned to cryptocurrency as a replacement for financial organizations due to several restrictions. This has caused the value of cryptocurrency to soar and cause a lot of price fluctuations.
Since cryptocurrency is a big part of the financial system, its role in this war cannot be avoided. Ukraine’s military and hacktivist factions have received enormous amounts of money in crypto.
Cryptocurrency worth nearly $100 million has already been sent to Ukraine in the last few weeks. Charitable contributions in cryptocurrency have since successfully raised over $54 million.
More than $15 million of the cryptocurrency it obtained has been expended by the Ukrainian government, which has engaged the assistance of many crypto firms, such as FTX and Everstake.
To centralize its crypto-based charitable efforts, the government also debuted a web address to centralize its crypto-based charitable efforts. According to this website, a few cryptocurrencies, such as bitcoin and dogecoin, are also accepted by Ukraine.
It’s not just those under attack in Ukraine who find crypto interesting; those who are attacking can also take advantage of it. The United States and its allies presently utilize restrictions as to their weapon of choice against Russia.
However, the Russian government may be able to circumvent them by using cryptocurrency.
Even though cryptocurrency’s presumed anonymity has been one of the major selling points, it is not infallible due to its predominance in cyberespionage. Individuals who share crypto can be a topic for cybersecurity threats.
As a whole, the crypto market is extremely volatile. Bitcoin and other cryptocurrencies have depreciated, given the global unpredictability. This undermines the claim that they may be a safe harbor, as several in the crypto community claim.
Experts have predicted that after the war, there will be more mainstream use of cryptocurrency. Other lesser cryptocurrencies may also experience substantial growth. There might also be an increase in the value of cryptocurrency. The latter has had a huge role to play in the Russia-Ukraine conflict. It is expected that more people will use cryptocurrency for most of their financial activities in the future.