During a recent Senate Armed Services Committee hearing, Admiral Samuel Paparo, a senior US military commander, highlighted the significance of Bitcoin, referring to it as a “valuable computer science tool.” He emphasized that its applications go beyond mere financial transactions, suggesting it could bolster US national security interests.
Paparo explained that Bitcoin’s proof-of-work technology increases the cost for potential attackers attempting to compromise the network, which he sees as a crucial aspect of cybersecurity. He noted, “Outside of the economic formulation of it, it has got really important computer science applications for cybersecurity.”
The hearing focused on the strategic posture of US forces in the Indo-Pacific region and addressed various global tensions, including ongoing conflicts in Ukraine and the Middle East, China’s military expansion, and the threats posed by North Korea. Paparo’s remarks align with comments made by US Space Force member Jason Lowery in December 2023, who argued that Bitcoin and other proof-of-work blockchains could act as a safeguard in cyberwarfare scenarios. Lowery also noted that while Bitcoin is primarily seen as a financial asset, it could secure various forms of data, messages, or command signals, pointing to its underappreciated potential in the realm of national security.
This increased focus on Bitcoin’s applications comes at a time when several adversaries, particularly state-sponsored actors, have ramped up their efforts to utilize cyberattacks, including phishing, ransomware, and distributed denial-of-service attacks, to disrupt infrastructure and gain economic advantages. A notable example of this is North Korea’s Lazarus Group, which has stolen billions in cryptocurrency over the past decade to fund its nuclear development initiatives.
Paparo’s testimony followed a question from Senator Tommy Tuberville regarding how the US could assert itself in Bitcoin competition, especially in light of China’s recognition of Bitcoin as a strategic asset. While Paparo did not directly address the competition question, he remarked, “Bitcoin is a reality. It is a peer-to-peer zero-trust transfer of value. Anything that supports all instruments of national power for the United States of America is to the good.”
In conjunction with these discussions, US Senators Bill Cassidy and Cynthia Lummis recently introduced the Mined in America Act. This legislation aims to address national security concerns surrounding the US’s reliance on foreign manufacturing of Bitcoin mining equipment by promoting domestic production. The act also seeks to formalize former President Trump’s executive order to establish a Strategic Bitcoin Reserve.
As the United States holds the largest Bitcoin reserves among global nations and commands a significant portion of Bitcoin’s hashrate, the exploration of Bitcoin’s role in national security and cybersecurity continues to emerge as an area of strategic interest.
