Cryptocurrency: Implications for Special Operations Forces by Megan McBride and Zack Gold

Introduction
In March 2018, Merriam-Webster announced that it would add the word cryptocurrency to its
dictionary. They noted that the word had first been used in 1990, and the definition they 
offered mentioned three core characteristics: 
Any form of currency that only exists digitally, that usually has no central 
issuing or regulating authority but instead uses a decentralized system to 
record transactions and manage the issuance of new units, and that relies on
cryptography to prevent counterfeiting and fraudulent transactions.
By the time the term was introduced into the Merriam-Webster Dictionary, it was already 
circulating through popular culture. It had been mentioned in multiple episodes of The 
Simpsons (as well as episodes of CSI, Family Guy, and The Big Bang Theory), it had made its 
appearance in major Hollywood films (including Horrible Bosses 2 and Deadpool), and it had 
even appeared as an answer on an episode of Jeopardy (in 2014). Moreover, in 2017 the value 
of one Bitcoin skyrocketed to more than $20,000 resulting in widespread media coverage and 
a virtual gold rush of new investors. Even people who did not join the frenzy became aware of 
the trend, and by 2018 nearly 80 percent of Americans reported having heard the term 
“Bitcoin.” Despite this familiarity, relatively few people actually understand the technology or 
its potential implications. 
Similarly, the US Department of Defense (DOD) is aware of cryptocurrencies, but often lacks a 
thorough understanding of their potential implications in the national security space. To 
increase knowledge on this issue, in 2018 the Joint Special Operations University (JSOU) asked 
for research on the topic “The evolution of cryptocurrency: future challenges and opportunities 
for SOF [special operations forces].”

This CNA-initiated study responds to that call for research by exploring the cryptocurrency 
ecosystem and helping SOF consider the implications of cryptocurrencies on its missions.
In the process of researching this topic, however, we realized that—with the exception of a few 
pockets of expertise—most US military and government personnel lack an understanding of 
how cryptocurrencies work. To fill this knowledge gap, we simultaneously published a 
companion piece to this study: “Cryptocurrency: A Primer for Policy-Makers.” Readers new to 
cryptocurrencies, or interested in increasing knowledge in a specific area, are directed to the 
companion primer for a more detailed exploration. The primer contains: (1) a brief history of 
cryptocurrencies and the problems that cryptocurrencies were designed to solve; (2) an 
exploration of the key differences between cryptocurrencies and conventional currencies; (3) 
an explanation of how cryptocurrencies work that addresses mining, market volatility, 
transaction times, cryptocurrency use, wallets, and regulation; (4) a section on common myths 
and weaknesses of cryptocurrencies (that is also included in this document); and (5) 
recommendations to policy-makers of areas in which more research and analysis on the impact 
of cryptocurrency is required. 
This document, by contrast, assumes a baseline understanding of cryptocurrencies. As such, it 
focuses on the four questions that motivated our analysis of the implications of 
cryptocurrencies for SOF: 
1. What operational considerations are relevant as SOF considers action in this arena?
2. What is the range of concerning activities in which cryptocurrencies have been 
observed? 
3. What are the likely next evolution(s) in the cryptocurrency ecosystem?
4. What challenges and opportunities do cryptocurrencies present to SOF given the 
current (and potential future) state of affairs?
We began this work with a literature review assessing the current state of cryptocurrencies 
(both technologically and financially), and then we interviewed government, military, and 
private industry experts engaged in daily work that touches on cryptocurrencies. With this 
information in hand, we identified and theorized a series of likely mid-term evolutions of the 
cryptocurrency ecosystem. Finally, we used the totality of this information—our assessment 
of the current state of affairs, and the potential futures we assessed to be most likely—to 
identify and explore potential implications for SOF mission areas.
In the course of our analysis, we found that the literature on cryptocurrencies was somewhat 
polarized, with some individuals clearly championing the technology and other individuals
clearly denigrating its potential. We negotiated this landscape by avoiding these competing 
waves of enthusiasm and skepticism. We did this, in part, by taking pains to normalize
cryptocurrencies whenever possible. And specifically, we found that cryptocurrencies could be 
normalized in three registers.

Cryptocurrency: Implications for Special Operations Forces Megan McBride and Zack Gold