There’s pretty much no way that you haven’t heard about cryptocurrency. It’s difficult to avoid crypto when it’s been covered heavily in the media for years. Maybe you already trade cryptocurrency or you know someone who does. Either way, I’m sure you’ve heard of it.
While gold has always been the top of most people’s lists in terms of emergency currency, that is starting to change as preppers are delving into the world of cryptocurrency.
But is cryptocurrency really a viable option if society collapses? Is it really worth the hype? There are both pros and cons, but you can be the one to decide.
Let’s start with a crash course in cryptocurrency.
Crypto is very complicated and there are many excellent videos out there explaining cryptocurrency basics, like this one.
Basically, cryptocurrency is a new form of digital currency. Imagine it as a coin or token. Each token is “mined” through a complicated mathematical algorithm on a computer. There are different types of coins and each has a different value, like a stock in the stock market, or paper money in a different country.
Cryptocurrency is really exciting because it is decentralized. This means that you can buy and sell goods using crypto without a middleman, like the bank or eBay.
It’s All about the Blockchain, Baby
The decentralized nature of cryptocurrency is thanks to blockchain. Blockchain technology is actually much bigger than cryptocurrency alone and it has a lot of potential uses in the future.
Crypto is traded using blockchain technology that creates a secure transaction, without the help of a bank. The blockchain is basically a giant digital leger that records every time a token or coin is traded. Instead of providing personal information in the leger, it is encoded using cryptography, so no personal information is shared. The leger cannot be erased and is available to everyone in the crypto community.
This process protects the identity of the seller and purchaser, and also verifies the legitimacy of the cryptocurrency.
In the future, blockchain will be used as a way to trade other items so you can sell directly to a consumer and have a secure transaction without the assistance of a bank or corporation.
It’s pretty cool technology, but let’s get into whether or not it makes sense for preppers.
The Benefits of Crypto for Preppers
Crypto is intriguing as a prepper because it has several potential benefits in an emergency. While some preppers have sworn off crypto entirely, there are a few reasons to give it a second look.
You don’t need banks or other businesses to trade cryptocurrency
The most obvious benefit of crypto for preppers is that you don’t need to rely on a bank or other business for trade and currency.
Businesses and banks come and go, and in a crisis, I don’t trust that they’ll stick around. We already know that banks can’t handle everyone withdrawing cash at the same time, In an emergency, I don’t want to be left wasting valuable time lined up outside.
Plus, blockchain secures and guarantees each transaction, so you don’t need a seller to legitimize it. Even better, the leger cannot be edited so you don’t have to worry about an unethical corporation duping you. Instead, the leger is stored in the public domain and is secured by blockchain and our peers.
Crypto can be stored on a small and portable hardware wallet
Gold, silver and other valuable resources are common commodities for preppers because of the inherent value and, therefore, the ability to barter and trade during an emergency. However, lugging around a bunch of gold or heavy metals is not practical, or even possible, if you need to get out of your home, fast, or travel long distances.
Crypto is very attractive for this very reason. It is digital and can be stored in a portable hardware wallet. It’s basically like a USB stick, but it is very secure. You need a password to access the contents of the wallet and any cryptocurrency inside of it.
There’s two types of wallets, hot and cold. Hot wallets are connected to the internet and easier for people regularly trading cryptocurrency. Cold wallets are devices that store crypto and are not connected to the internet. Essentially, you remove (or “download”) the coins from the internet to insulate them from hackers and instability.
For a hot wallet, I’d recommend Ledger’s Nano S. It is small and sleek, and can be easily transported with you during an emergency.
If you don’t have internet during an emergency, you can look into mesh networking or creating your own off grid network with radios to support the device. GoTenna is an innovative company that allows secure, off-grid communication through mesh networking. GoTenna is currently developing the technology to allow bitcoin trades off-grid and without internet. Read more about GoTenna and the collaboration, here.
Okay, now back to the wallets.
If your wallet gets destroyed and you cannot access the contents, like in the event of a very sudden disaster, you’ll have to use the seed phrase to access your cryptocurrency. While many people keep their seed phrase on physical paper, that won’t do for a real prepper who might be braving the elements. That’s why I’d recommend also having a cold wallet, as well.
In fact, I recommend this small and portable one by Butterfly. I think it’s superior to others because it is fireproof, waterproof, hackproof and shock proof! You’ll be able to rest easy during an emergency knowing that you’re crypto is safe. Just don’t lose it, too.
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Creates diversity in your financial prep
Have you ever heard the phrase, “don’t put all of your eggs in one basket?” Prepping is about finding security and stability in a time of crisis, and finances are no different. It is important to diversify your financial prep, which means that crypto can play an important role in your emergency financial portfolio.
Unless you are a cryptocurrency genius (and even if you are) it is probably irresponsible to invest all of your money in crypto. My advice would be the same if you said you wanted to invest all of your money in gold, silver or any other single asset. Putting all of your money into one place heightens the risk that you will lose it or be unable to access it. As a result, you might find yourself unprepared in a survival situation and without any currency.
Crypto can play an important role in your financial prep by providing an additional currency to trade and barter with during an emergency. If you can’t carry your gold around, you’ll be happy that you have some crypto to trade instead.
Plus, since crypto is decentralized it makes a lot of sense as a financial option for preppers and survivalists. The very purpose of cryptocurrency is to trade goods and currency without an intermediary like a bank or the government. If your financial prep only includes gold and paper money, or stocks in the stock market, you should probably be worried about using it if all hell breaks loose.
That being said, a prudent prepper has a balanced variety of financial prep and currencies so that they are ready for any situation.
Drawbacks of Having Crypto During an Emergency
While cryptocurrency is innovative technology with the potential to greatly benefit survival preppers, it also has drawbacks. While there are ways to mitigate these risks, I suggest thoughtfully considering them before jumping headfirst into the world of crypto.
Can’t use it (easily) without electricity and WIFI
This is one of the most obvious drawbacks of crypto. Yes, new technology is being developed to facilitate trades offline and to create mesh networks for even those living in the most remote areas on earth. However, this technology is brand new, not widely available and is still being tested. Before investing your hard earned cash in crypto, you’ll want to make sure that you have a reliable way to access the currency if cell towers and satellites go down.
Plus, if you are living off-grid and in the wilderness, do you really need the crypto? You won’t be able to receive any mailings so really, it’s beneficial if you ran into someone to trade with and they only accepted crypto.
The most likely scenario where crypto is beneficial is in the event of a governmental collapse, but not a total societal collapse. As our world gets more connected, it is possible that at some point we may not have governments, countries and societies as we currently have. In that case, if we still have access to technology, crypto will be incredibly valuable.
Unstable market might become a bad thing
One of the reasons that cryptocurrency is so popular is because people are getting rich. You have probably heard that the market is volatile, meaning that some people are making incredible money as the price of a single coin or token skyrockets. It has proven to be dependent on the whims of tweets from Tesla CEO Elon Musk and other business-people.
This is awesome for people who have crypto right now, but what about in the future? As a prepper, that’s what you are planning for after all.
Since crypto is already such a volatile market, I see it going one of two ways. Either it becomes more stable and endures during a crisis, or it becomes even more volatile and completely puts your finances at risk.
If the crypto market remains unstable, that means that in the event of a crisis, or governmental collapse, it might become even more unstable. The infrastructure could totally collapse, prices could plummet and people could desperately try to sell all their crypto at a loss. The problem is that by that point, there’s not really a way to turn your crypto into something else.
If you had stocks in the stock market and you sold them, a financial institute or the trading company will give you the value of the shares into your account.
But with crypto, there is no bank. That means that you trade crypto for crypto, or some sort of tangible good. If the crypto market collapses, you’ll probably be out of luck and with no way to recover your losses.
Might become easily stolen or lost
The flip side of being able to store a lot of crypto in a small hardware wallet is that you might lose it. Especially if you are in a stressful survival situation, carrying a lot of gear and your head is in another place. You can have a hot wallet and a cold wallet backup, but if you lose your seed phrase, you’re out of luck.
Some preppers might opt to bury their seed phrase or hide it somewhere remote. This is all fun and games until you need to evacuate or leave your home immediately. In that case, you don’t have time to dig around the garden for your seed phrase.
Alternatively, crypto can be easily stolen because of its size. Pick pocketers and expert thieves have no problems stealing conventional wallets, phones and even jewelry off of unsuspecting victims. I have no doubt that a small USB-like stick would be extremely easy to swipe, especially by someone who is desperate and in a crisis.
Plus, as cryptocurrency becomes more and more popular, it will become more mainstream. This means that more people understand how much value is actually in a single coin or token, and are willing to take risks in order to steal it.
The reality is that if you prepped in gold, or some other precious metal, it would be a lot harder for someone to steal, or to lose, because of its size and weight.
A Final Word of Caution
My job is to evaluate the benefits of crypto for preppers, not just your average person. If you want to invest in cryptocurrency generally, I recommend talking to a financial advisor that can guide you based on your own specifical goals and needs.
However, when it comes to prepping, the priorities are different. You need to think about survival, not just making a few bucks. I caution you against getting sucked into the hype and mania around crypto without carefully considering the drawbacks and how it fits in with your larger goals.
Crypto can be a great tool for preppers, but it can also be risky. Like we always do, it is important to mitigate your risks when preparing for survival. As long as you take the downsides into consideration and prepare appropriately, cryptocurrency is a useful tool to diversify your financial prep and have in the case of an emergency.