A nuclear war has been a global fear since the first atomic bombs were detonated in Hiroshima and Nagasaki in 1945. This article explores how a full-scale nuclear war would impact Bitcoin, a currency based on decentralization and lacking a single point of failure.
The threat of nuclear war exists because several countries have the necessary arsenal: the United States has 6,600 nuclear warheads, Russia has 6,800 nuclear warheads, and about 1,000 other nuclear warheads are held by other countries including China, North Korea, Pakistan, India, the United Kingdom, France and Israel. Each of these has the ability to wipe out an entire city; an all-out nuclear war, even if it doesn’t result in the destruction of the planet, would leave behind high levels of radiation that would render vast areas uninhabitable.
A nuclear detonation also generates a powerful electromagnetic pulse (EMP), while one detonated in the Earth’s upper atmosphere could ionize it, stripping away electrons from gases during this atmospheric ionization, blasting downwards onto the surface. Effectively, a single nuclear warhead could cause wide-scale destruction of technology and power grids. Many computers would get fried and never work again.
Money stops working
Fiat payment networks would be knocked offline, while the central entities managing them may no longer be functioning properly. Apart from bank reserves stored in vaults, physical cash would probably be decimated in a nuclear blast, leaving banks and financial institutions guessing at existing supply. Systems would be lost or corrupted, and money movement all over the world would be destabilized without governments or banks managing these financial systems. National fiat for some obliterated states would lose all value overnight in a stark demonstration of the weaknesses of fiat’s single point of failure.
Survivors would once more turn to traditional havens of value such as gold and other precious metals, but as the world rebuilds, their unsuitability for long-distance transfer and secure storage would present early challenges. As local and inter-state commerce resume, working towards international finance, people will be forced to seek easier, working alternatives.
What of Bitcoin?
Beyond the initial destruction to infrastructure, cutting off power and telecommunications to knock Bitcoin users offline, radiation from a nuclear explosion could easily corrupt computer storage, causing many to lose access to their wallets. Those able to recover wallets from private keys or seeds would be the first users post-war, provided they had alternative access to the Bitcoin network, perhaps via satellite and battery- or fuel-powered generators.
Because the Bitcoin network is decentralized, with nodes scattered throughout the world, it is expected that even a few nodes would survive, with intact copies of the blockchain and could be repopulated fairly quickly. In theory, even if only a single computer survived with the full blockchain, the network could be revived.
A drastic drop in difficulty is almost certain and, with that, a less secure blockchain more vulnerable to malicious attacks, although users would presumably trust confirmations less or require many more confirmations as a temporary measure.
As countries battle the onset of hyperinflation amid extreme scarcity of food items and basic necessities, Bitcoin would once more prove a more viable solution, with its limited and predictable supply. This, however, would only be a consideration should the revived network prove to be as decentralized and secure as before.
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