Posted by Sponsored Post Posted on 17 May 2021

Bitcoin and its relation to Defense

Bitcoin has become widely popular owing to the number of times it has been on the headlines in the last decade. To give a basic overview, Bitcoin is a new digital currency that has the potential to make large transactions, especially ones that are made across borders very fast. It is also believed that the public ledger system that is used in Bitcoin is much more efficient than the manually regulated and controlled traditional ledger system that is used in banks and other financial institutions. 

So what is the hype around Bitcoin? Recently Tesla CEO, the well-acclaimed tech mogul Elon Musk made an investment of 1.5 billion USD on Bitcoin. Tesla is not the first Multinational corporation to have invested in crypto. Many banks and financial institutions like JP Morgan, PayPal have made investments in cryptos to keep pace with the progress in the digital age. The unique feature that endows cryptocurrencies with the potential to surpass the functionality of legal tender is blockchain technology. 


Blockchain is essentially a format of a digital database. The traditional ledger system is also a database that records transaction history, which can be used to create accountability for later transactions. However, this manually regulated ledger has limited usage. The blockchain can be managed and updated simultaneously across the world. This is what makes it superior and more efficient than the traditional ledger system.

What exactly is the blockchain? The blockchain was first conceptualized in 1991 as a system that would allow irreversible time stamps to be put on events and transactions. Such timestamps couldn’t be altered without affecting the structural integrity of the entire blockchain. This would allow an accurate record of commodities (tangible as well as intangible) and their position in time. 

It was not until 2009 the world got to witness the first practical application of the blockchain. Satoshi Nakamoto conceptualized the first cryptocurrency, Bitcoin by the utility of blockchain technology. The blockchain allows to track and record every transaction that a cryptocurrency token makes in the circulation system. The miners in charge of the nodes (computer networks) audit transactions. Transactions can be sanctioned by anyone who owns a crypto wallet (visit 5 enterpreneurs trends to know more about how crypto wallets facilitate transactions). When they obtain the proof of work they can keep the blockchain functional. Once the proof of work is obtained through consensus new blocks are generated. This block is added to a logically connected network of an existing blockchain. Once a block is added, it cannot be altered. This allows accurate and non-tamperable records to be maintained through blockchain.

Blockchain and defense

Although Bitcoin’s secure network and anonymous transaction features have created a scope of abuse. It has been used across the silk roads for the purchase of illegitimate drugs and contrabands. Countries like China have revoked the legality of crypto transactions in their economy.

However, the blockchain as a concept has the potential to strengthen defense and security. A number of blockchains use Turing Complete code for encryption. This encryption is extremely secure and cannot be decoded easily. 

In National Defense Science and Technology (NDST), researchers proposed how blockchain could be used for Chinese national defense. The highly encrypted blockchain is also a peer-to-peer system, which means the information is decentralized. Classified defense information can be securely stored up in encrypted blockchain networks. 

Thus blockchain can be used for the maintenance of key areas of defense- intelligence service, weapon management, defense personal management, logistics, etc. Through the blockchain, it would be possible to maintain transactions with intelligence personnel across the world. The blockchain would also allow a confidential database for weapons and troops. The decentralized system of storing data also allows classified information to be stored in networks, rather than a single Nexus, thus making them more secure. 

The smart contract technology that is used by Decentralized applications is also of utility when it comes to defense and security. The transaction and automatically executable functions that sustain the blockchain are possible only when the initial agreement on which the blockchain is based is agreed upon. It would be virtually impossible to make unauthorized transactions or tamper with record history when such a security structure is encoded in the very system of maintaining the defense and security resources of a country.

Conclusion: The blockchain after being popularized by Bitcoin has found new applications in systems like supply chain monitoring, health infrastructure, online identity protection, and so on. It is yet to be seen what real application blockchain may have on matters concerning national defense and security.

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