Cogent Communications has started to cut ties with Russia in response to Ukraine Invasion.
Cogent Communications is an internet infrastructure company. They provide the infrastructure for ~25% of global internet traffic. According to the company in an interview with The Washington Post, they did so to prevent the Kremlin from using their network to perform cyberattacks and spread propaganda regarding the Russian-Ukraine conflict. This move could further push Russia to remove itself from global internet traffic and create their own secluded internet sovereign to Russia...a move that was tested last year when Russia successfully tested disconnecting itself from the global internet.
What are the implications of this for Bitcoin? Russia currently provides ~11% of the hash rate for BTC mining on top of BTC transactions surging amidst the conflict with Ukraine. If Russian internet was cut off from the rest of the world, this could create a hardfork in the Bitcoin network creating a Russian Bitcoin and a Global Bitcoin as they would no longer be able to communicate with each other (outside of the possible implementation of Starlink satellites). We are going to continue to research the reality/technicals of this possibility with hopes to provide an expanded article discussing it soon.
Can the Kremlin Use Bitcoin to Avoid Sanctions?
This has been the newest FUD in the streets from US politicians, creating a stir, claiming that Bitcoin and other cryptocurrencies can help Russia subvert economic sanctions from the Western world. Unfortunately for them, Bitcoin has a ~750 billion market cap...Russia makes up about 8% of world oil exports, at today's prices amounting to ~ $1 billion worth of oil per day. At Bitcoin's current market cap, it doesn't have the liquidity to handle the monetary transfers necessary for global oil trade. In addition, if they tried to use Bitcoin for ilicit trade, it would be easily auditable on the blockchain.
Where Bitcoin has really found its helping hand is with the people of Russia and Ukraine - approximately a 120% increase in Bitcoin transactions during the conflict. Ordinary citizens are fleeing from the ruble into assets such as Bitcoin to protect themselves. Trying to block exchanges from operating in Russia would only hurt the innocent citizens of Russia...In a powerful statement both CEO's of Kraken and Coinbase have rejected calls for them to shutdown their exchange operations in Russia.
Coinbase CEO Brian Armstrong said “Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed...Many of them likely oppose what their country is doing, and a ban would hurt them, too.”