Crypto Element of the Deglobalization ProcessOctober 1, 2022
On Friday, September 30, the President of Russia, Vladimir Putin, met a delegation of representatives of four occupied regions in Ukraine. Some of these are under full control of the Russian army and breakaway forces, while others are only partially occupied according to the present maps of Ukraine and its regions. However, all four regions officially, after a referendum that the West and many other nations do not recognize, decided to become a part of the Russian Federation. The President of Russia accepted the same declarations and now all four regions are seen by the Russian state as an integral part of its territory.
Now, the West, the EU, and NATO, in particular, are seeking a response to that process and the war itself, which comes with even nuclear threats. Whatever the outcome might be of the same prolonged and very dangerous conflict, for now, the residents of Russia will no matter what become more disconnected from the wider international community. For many, this is a part of the wider process of decentralization and dissociation of the global international actors from one another. In that deglobalization, it appears that crypto will also play a big part, which is something that both its supporters and detractors will try to use for their own narratives. In that, the price of bitcoin will fluctuate and sway, along with the rest of the crypto market, but the overall ecosystem, like that of the entire globe, is clearly mutating and evolving into something different.
Turmoil in the World
On the same day that the Russian Federation annexed nearly 15 percent of Ukrainian territory, one of the biggest hurricanes in history hit the US state of Florida. It generated immense damage, with tidal waves and storm surges pushing into the inland part of the very low-lying part of the country. Only a couple of days before that, the same storm battered the island of Cuba and left it without power across the nation. The fallout of the storm in both the US and Cuba will be measured in billions of USD and last for months, if not years.
All of these events signal the need for the global society to transition into something more transnational, individualized, fluid, and robust. That new environment for interactions on all levels will demand a set of financial networks that will be made of sturdier stuff. The same networks will not be open to sudden cuts from autocratic national leaders or open to physical destruction from natural events in a world that is more and more under pressure from global climate change.
Back in 2009, when the bitcoin network was launched, the notion that the world is gradually tipping haywire was simply not present in the minds of many individuals. Back then, Russia was apparently on a path to liberalization that is of a Western-style, similar to China. Hurricane Katrina showed back in 2005 what the forces of nature, spurred on by human careless exploitation of resources, can do, but many simply found that a fact they can easily ignore.
At the same time, global communication and the IT sphere were expanding at a break-neck speed. Esports were taking over regular sports in terms of their rising popularity and anyone could get in touch with anyone else on the planet. But, these advancements did not stop a range of problems slowly brewing in the background. The 2020s seem to be a period when these bubble to the surface and push human civilization to evolve into something that can stand the test of even more difficult things to come.
Instability in the domains of politics and ecology are two of the biggest drivers of the process of globalization. While the 20th century was marked by a rampant process of globalization, the 21st century is slowly turning towards a redesign of the same process. The old notions of the global economy warn that these defragmentation procedures might make everyone poorer, like the state of finance was prior to the 20th century. Here, modern technology will not make a huge difference as it will not be able to overcome problems that deglobalization will generate.
But, the same process will take place no matter what, as the alternative is a slow but certain doom, where the present system simply cannot cope with the new challenges. The blockchain tech and the crypto networks are a way how deglobalization will take place. When a certain location loses connection to the SWIFT network, a different crypto network will slide into place. A tornado might hit the central servers of a bank, but it will not be able to disrupt a decentralized ledge of a cryptocurrency. Even access to the internet will become decentralized and more local, having the ability to keep going when the rest of the traditional network goes down because of things like a lack of electricity.
Cryptocurrencies provide, as well as their basic blockchain tech, the ability to both innovate and inspire new systems. The process does not aim to destroy globalization, but transcend its elements that presently work in a counter-productive manner. Crypto can be a decentralized and cross-border force that can help but never hinder. It can resist any censorship pressure and stay free of any potential choke points. Yes, it has a range of serious limitations and cannot do much that many crypto enthusiasts would like.
But, the global world will become more fragmented whatever the nations of the world might want to do. The pressures will increase and become more severe – at some points, they will break the old system, locally or even regionally. But, crypto can be a tool that is just as useful in the US as it is in Kenya, Argentina, and Iran. Here, deglobalization is something that takes place and crypto is something that tries to steer its best elements to a point of global functionality. That will not be a clean or quick process, but it has to happen no matter what.