Cryptocurrency has proved itself a valuable humanitarian tool. In the face of Russia’s invasion of Ukraine, the latter has received an estimated $100m in crypto donations.
Recently, Ukraine’s deputy minister of digital transformation, Alex Bornyakov, noted that president Zelensky’s support for crypto was a potential “economic breakthrough” for the nation.
Crypto donations, which run on decentralised blockchains, eliminate the 25-30% administrative overhead of charitable giving, putting all the money into the pockets of the charity recipients.
But Web3’s value to Ukraine goes well beyond cryptocurrency donations by providing permanent and fixed government records and documentation of war crimes.
Storing permanent records
Rebuilding a country requires permanent, salvageable and trustworthy records of land registries, titles, births and other official documents that help establish who owns and is entitled to what. This became crystal clear when Haiti, already one of the world’s poorest countries, had tremendous difficulty in rebuilding after the devastating 2010 earthquake destroyed 60 years of the country’s archives.
Ukraine is one of the first countries to use blockchain for land registries and other government records. This technology will serve Ukrainians well when the time comes to rebuild.
Fixed documentation of war crimes
Russian state agencies are experts at generating propaganda-ridden content that spreads quickly through social media. Over the past decade, national intelligence agencies have documented these disinformation campaigns extensively. Following its invasion of Ukraine, Russia is altering images and accounts of its reported war crimes – and more. A manipulated video shows president Zelensky asking Ukrainians to lay down their arms and surrender.
It is essential to securely and permanently store immutable authenticated images and accounts of the Russian invasion of Ukraine. This material must then be stored in unalterable systems enabled through blockchain technology. These efforts are already under way. Arweave, a startup supplier widely used for secure and persistent non-fungible token (NFT) storage, reports that, so far, there are 10 million images of the conflict within its system.
Ukraine’s forward thinking
Ukraine is quite a progressive country, as evidenced in part by its thoughtful embrace of Web3 technology. The Ukrainian population ranks fourth in the Chainalysis 2021 Global crypto adoption index, and it conducts about $150m in daily volume of cryptocurrency transactions.
Ukraine is also ahead of most countries in terms of regulating digital assets.
Lessons for US senators
Senator Elizabeth Warren and the co-sponsors of the Digital Assets Sanctions Compliance Enhancement Act of 2022 must educate themselves on Web3 technology. They have much to learn from Ukraine, the country they are trying to protect. Sure, criminals will use any financial system to try to hide and launder money, but blockchain is a much more difficult system in which to conceal money than existing legacy financial systems.
“Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021,” says the Chainalysis 2022 Crypto crime report introduction, which notes that these transactions represent $14bn in value. Meanwhile, money-laundering statistics from the United Nations show that about 2% to 5% – or $800bn to $2tn – is laundered globally each year.
The Russian invasion of Ukraine has terrorised freedom-loving people everywhere as we watch in horror what is transpiring. Web3 won’t stop the missiles, but it does offer a ray of hope for a better, safer world where innovation thrives.
Avivah Litan is a Gartner distinguished research vice-president