How Bitcoin can be used to drive development

Every invention comes into being in a similar way: pioneers, sceptics, opponents, winners and losers. When the innovation catches on, it often changes the way we live. The aim of this text is not to defend Bitcoin; rather, I am fascinated by the principles underlying it – the Satoshi or Bitcoin protocol, that is, the rules that govern how Bitcoin works. Its key components and principles are: a decentralised peer-to-peer network without centralised oversight; blockchain technology, a public ledger in which all Bitcoin transactions are recorded; mining and proof-of-work (the process of creating new Bitcoins and verifying transactions), and cryptographic security.

When wars, natural disasters, political barriers or poor infrastructure bring banking networks, payment services or border control points to a standstill, cryptocurrencies can offer an alternative means of transferring value. A Bitcoin payment is settled directly between the parties involved and recorded on the network itself, without the involvement of a bank or similar intermediary – provided that users have internet access, a suitable device and control over their private keys. The biggest obstacle often lies in converting Bitcoin into local cash or goods, as this still requires a nearby trading partner who is willing to trade.

Bitcoin is not a substitute for national currencies. Volatility and technical difficulties remain a genuine problem, and the legal situation is inconsistent. In most countries, the ownership and use of Bitcoin are legal; a handful of countries ban it; and – more relevant to cross-border relief efforts – the associated activities are subject to increasingly stringent regulation. Exchanges, custodians and fundraising platforms are subject to authorisation, anti-money laundering and sanctions regulations. The EU’s Markets in Crypto-Assets Regulation (MiCA) framework is one example of this. Transfers to conflict zones are subject to particularly close scrutiny.

Consequently, the greater risk lies not simply in holding Bitcoin, but in the manner, location and intermediaries through which the transfer takes place. Nevertheless, it can enable people in exceptional circumstances to receive, hold or spend funds when traditional channels are disrupted.

I would like to explore the benefits of this technology by looking at two different areas of application – one humanitarian and one entrepreneurial.

The humanitarian case

A satoshi is one hundred-millionth of a bitcoin, the smallest unit of the cryptocurrency. It is too tiny to be of any significance – until you see what people can do with it in difficult circumstances. In 2023, a taxi driver from Gaza began collecting more than a quarter of a billion satoshis – worth over $170,000 at the time – and used them to provide water, food and fuel for around 20,000 families. Following a volcanic eruption in the Democratic Republic of the Congo in 2021, a restaurant worker and a blogger from Goma gave Bitcoin to displaced families and persuaded local traders to accept it as payment.

In Gaza, the practical solution ran up against political obstacles. In order to comply with the EU’s MiCA, the fund behind the fundraising campaign had to recognise that transferring currency to a conflict zone quickly came under the scrutiny of the authorities and is too risky for a platform that wishes to survive in the long term. Some described this as financial censorship.

However, the fact that Bitcoin-based platforms can be shut down is not a genuine argument against using Bitcoin, because freedom lies in the Bitcoin protocol and there alone – in the open, shared set of rules that anyone can use directly, without the authorisation of a company or a government. A crowdfunding platform may be instructed to terminate a campaign; but the decentralised network that uses Bitcoin in the background cannot be ordered to refuse a payment between two parties.

For anyone who has ever tried to buy or trade cryptocurrency, Bitcoin can seem daunting and technical. However, the humanitarian use cases discussed here do not rely on that level of technicality. They rely on a free smartphone app – digital wallets – which works in a similar way to a messaging app or a mobile money service: the recipient displays a code, the sender scans it, and the money is transferred within seconds, often for less than a cent. Neither a bank account nor any knowledge of the underlying technology is required. The real hurdles lie elsewhere – owning a mobile phone, accessing an internet connection and, above all, converting Bitcoin back into local cash.

The Digital Assets Research Institute reports that Bitcoin has helped over 329,000 displaced people to safeguard or restore their savings, and estimates that this figure could rise to a total of up to 7.5 million people by 2035. The cryptocurrency is doing work here that our largest institutions are unable to do.

The entrepreneurial case

In the 19th century, huge amounts of capital were channelled into railway construction, and every decade opened up a new market – from Japan and South Africa to Canada and Kenya. Today’s railways are data centres, chips, fibre optics and electricity.

Bitcoin can play a role here too. A company called Gridless uses Bitcoin mining to extend electrification to even the most remote areas of Africa.

The core concept involves selling the same electricity to multiple consumers within a defined hierarchy. Priority is always given to the community – residential buildings, shops, clinics and schools. Any surplus not consumed by these is then sold to companies that use artificial intelligence; these pay more and generate the bulk of the revenue. Whatever remains after that goes towards Bitcoin mining – the consumer of last resort, which is prepared to take on surplus electricity at any time, pay for it in cash and release it immediately as soon as the communities or AI companies need it.

The facility itself does not need to purchase the costly hardware. Capital partners buy and own the expensive AI computers; energy partners own the generation facilities; the local communities buy ordinary electricity; AI customers buy computing power; and Bitcoin takes whatever is left over. The company operating the system merely manages the flow.

As the demand from the community and the AI sector rises, Bitcoin’s share decreases – yet it never disappears entirely, as there are almost always a few surplus watts for which there is no better buyer, and Bitcoin ensures that these are not wasted. It is this certainty that makes building the facilities worthwhile.

It is important to note, however, that “Bitcoin” is not a company, but a network. Specialised computers, known as miners, run continuously to process and secure the network’s transactions, and are rewarded for this with newly created bitcoins. In the Gridless model, these machines behave like a customer who is prepared to buy surplus electricity at any time and pay for it immediately.

The model is already being implemented in three African countries – Kenya, Malawi and Zambia. It has reduced electricity prices for local communities by a third and provided electricity to a further 30,000 people, as well as hundreds of new businesses that use this electricity. Since 2022, Gridless has demonstrated that flexible digital demand can make off-grid energy in Africa both affordable and profitable.

The model is also remarkable because it circumvents a cost factor of Bitcoin mining that is very real and deserves to be mentioned: the Bitcoin network consumes around 138 terawatt hours of electricity annually, which corresponds to around 0.5 % of global consumption – similar to that of a medium-sized country. However, this is only a modest proportion compared to what industrialised nations consume daily for data centres, cooling, cars or heating. At the same time, mining is becoming increasingly clean: according to a 2025 study by the University of Cambridge, around 52 % of mining is currently powered by sustainable energy, whilst the share of coal is declining sharply.

The crucial point is the source of the electricity. In the Gridless model, mining utilises surplus electricity from renewable energy sources that would otherwise be lost, and the revenue helps to supply electricity to communities that previously had none.

The bottom line

Humanitarian aid and entrepreneurial innovation are two different worlds, yet both offer a glimpse of what cryptocurrencies might become. Their full potential remains to be explored and raises difficult questions. Control, cyber security, ownership, profit, traceability and transparency are just a few of them. These issues will need to be resolved over time.

The real question for development cooperation is, at first glance, simpler: do we simply want to watch from the sidelines, or do we want to get involved and have a say in the direction this technology takes?

Christoph Schneider-Yattara is a senior consultant bridging the humanitarian-development-peace (HDP) nexus and business development through global networks, drawing on over two decades of leadership across three continents.
csyattara@gmail.com