Introduction – War, Money and Inflation
History shows a close relationship between war, inflation and the expansion of money supply. Central banks often respond to wartime spending by expanding the supply of currency. A 2022 study by the Riksbank notes that wars usually cause inflation because the demand for resources rises and governments often fund military expenditures through money creation . Tax increases or cuts to other spending can theoretically finance wars, but such measures are politically difficult. Governments therefore resort to printing money — a policy that is easier in the short term but leads to high inflation . The same study observes that major wars, from the American Revolution through the First Gulf War, eventually exhausted tax and borrowing options and turned to the “money printing press,” resulting in significant inflation .
Historian accounts support these observations. Rockoff’s research on American wars (cited in the Blocktrainer series) shows that even under the gold‑exchange Bretton Woods system, the United States pressured the Federal Reserve to expand the money supply during the Korean and Vietnam Wars . Monetary expansion kept interest rates low and allowed wars to continue, even though it eroded purchasing power and led to price rises . In other words, the ability to issue fiat currency at will makes war financially feasible.
Why Bitcoin Could Make War Unaffordable
A capped monetary supply and no printing press
Bitcoin’s core innovation is its hard‑capped supply of 21 million coins. Unlike fiat currencies, Bitcoin cannot be printed at the will of governments or central banks. A Bitcoin standard therefore removes an important mechanism for wartime financing. Jean‑Laurent Tari, writing for LinkedIn in March 2025, contrasts fiat with Bitcoin: central banks can create digital fiat money and multiply it through leverage, enabling governments to finance wars by borrowing and inflation . Bitcoin, by contrast, requires holders to actually possess coins before they can spend them; no one can create new coins except miners who must invest time and energy to secure the network . Because Bitcoin cannot be freely printed, a government wishing to wage war would have to raise taxes or borrow actual Bitcoin. Tari argues that if states in 1914 had been forced to use Bitcoin rather than fiat, the First World War would have lasted only months, as governments would have lacked the resources to sustain multi‑year conflicts .
The Blocktrainer series makes a similar point: by eliminating the centralized expansion of money supply, Bitcoin would significantly restrict the financial ability of states to wage war . The authors note that gold once served as “hard money,” but gold is physical and can be centralized or confiscated, whereas Bitcoin is digital and borderless . With Bitcoin as global money, it would be difficult for governments to re‑introduce fiat to fund wars . The popular slogan “make war unaffordable” captures this idea .
Non‑confiscable digital property and the end of looting
Throughout history, armies have financed themselves by seizing valuable metals or resources. The Nazis raised funds by appropriating gold reserves of conquered countries, and mercenaries in the Thirty Years’ War resorted to plundering civilians when money ran out . Bitcoin alters the calculus of looting because it is digital property that can be memorized with a seed phrase; a marauding army cannot simply seize people’s money . Henry Ford recognized that the evil of gold in war stems from the fact that it can be controlled and confiscated; he proposed an electronic energy‑based currency to end wars . Michael Saylor echoes this view, arguing that gold or land invites invasion because these physical assets can be taken, whereas Bitcoin can be moved into cyberspace faster than any army . In a world where wealth is digital and protected by cryptography, invading territory yields little plunder and therefore offers fewer incentives for aggression.
Transparency and public accountability
Blockchain technology makes transactions public and immutable. Tari notes that in a Bitcoin economy, every expenditure appears on the blockchain; there is “no hidden spending, no untold corruption, no delayed effects” . Governments would therefore be unable to conceal war budgets through off‑balance‑sheet financing or deferred debt. To fund a war, they would need to tax citizens directly or borrow Bitcoin from them. Because taxes are politically painful and borrowing cannot be disguised, citizens would likely oppose long wars; this creates a strong deterrent against protracted conflicts. As the Riksbank study observes, raising taxes to finance war is politically difficult and often unpopular . Under a Bitcoin standard, this difficulty would be front‑and‑centre rather than hidden behind inflation.
How Bitcoin Encourages Peaceful Cooperation
Free markets, trade and the “capitalist peace”
Economists long ago noticed that trade interdependence raises the cost of conflict. The capitalist (or commercial) peace theory holds that market openness and economic interdependence make states less likely to fight. According to this theory, capitalism raises the costs of warfare, encourages groups to lobby against war and reduces the economic benefits of conquest . In his 1795 essay Perpetual Peace, Immanuel Kant argued that “the spirit of commerce … is incompatible with war” . Joseph Schumpeter later observed that as capitalism advances, people develop a more peaceful disposition .
The Blocktrainer article notes that free markets promote peace because people become valuable to one another through the division of labour; cooperation becomes a dominant survival strategy . Thorsten Polleit, an economist of the Austrian School, argues that if you want to prevent war effectively, you must limit the size of the state and advocate for free markets, which are guarantors of peace and prosperity . Bitcoin operates as a decentralized, permissionless monetary network that allows anyone, anywhere, to transact without intermediaries. It therefore facilitates global trade and integration. Blocktrainer emphasizes that Bitcoin enables people in distant countries to work together — such as hiring a programmer in Nigeria directly — without banks or government intervention . Increased economic interdependence through a common, neutral currency could strengthen community and reduce incentives for war .
From kinetic warfare to “Softwar” and energy competition
Major Jason Lowery’s “Softwar” theory (summarized by Blocktrainer) proposes that Bitcoin’s proof‑of‑work system could function as a non‑lethal form of power projection . In this view, nations might compete by directing computational power toward mining rather than investing in kinetic weapons. Bitcoin mining is a contest for scarce energy and computing resources; the network rewards participants for contributing honest work rather than harming opponents. Historical figures envisioned similar ideas: Nikola Tesla believed that a machine harnessing electrical energy could render a nation impregnable and make war impracticable . While these notions are speculative, they illustrate how shifting competition into digital realms might reduce physical conflict.
Criticisms and Limitations
- War is multi‑causal. Military conflicts are not driven solely by economics. Ideology, religion, territorial disputes and security concerns also trigger wars. Even with hard money, states could raise taxes, requisition resources or resort to conscription.
- Cryptocurrencies can finance war too. A 2024 HackerNoon article cautions that crypto is not a panacea. Ukraine’s government converted crypto donations into weapons and drones , and Russian arms manufacturers have reportedly used stablecoins to circumvent sanctions . These examples show that decentralized currencies can help fund both sides of a conflict when payment systems are blocked.
- Volatility and adoption hurdles. The International Monetary Fund warns that Bitcoin’s price volatility and lack of consumer protection make it unsuitable as a national currency at present . Without widespread adoption, Bitcoin cannot serve as a universal war deterrent. Furthermore, states could attempt to regulate or ban Bitcoin, undermining its availability.
- Human nature and governance. Even if Bitcoin makes war expensive, human beings still have combative instincts. Nikola Tesla himself noted that war cannot be abolished solely by technological means; it requires cultural and ethical change . A Bitcoin standard may reduce incentives for war but cannot eliminate violence altogether.
Conclusion – Can Bitcoin Prevent War?
Bitcoin’s fixed supply and decentralized structure provide a compelling argument that it could make large‑scale wars harder to finance. Historical evidence shows that wars are often sustained by printing money and inflating away costs ; a hard‑money standard like Bitcoin removes this tool. The network’s transparency would force governments to finance wars through taxation or open borrowing , likely provoking public resistance. Bitcoin also facilitates global trade and fosters mutual dependence, aligning with theories that link economic interdependence to peace . Its digital nature makes confiscation and looting difficult and may shift competitive dynamics toward non‑lethal energy races .
However, Bitcoin is not a magic wand. Some conflicts may arise from motives unrelated to money, and cryptocurrencies can also finance militaries . Price volatility, regulatory challenges and unequal adoption limit Bitcoin’s immediate impact . Rather than guaranteeing an end to war, Bitcoin offers a tool that could reduce the ease with which governments launch and fund large‑scale conflicts. Its success in promoting peace depends on broad adoption, sound governance and a continuing cultural shift towards cooperation. With these caveats in mind, Bitcoin’s hard money principles do present an inspiring vision of a world where wars are less profitable, financial systems are more transparent, and human ingenuity is channeled toward peaceful collaboration.