Top U.S. military and defense officials have confirmed the Pentagon is actively experimenting with Bitcoin as a tool for national security, echoing a controversial thesis on digital warfare.
Top U.S. military and defense officials have confirmed the Pentagon is actively experimenting with Bitcoin as a tool for national security, echoing a controversial thesis on digital warfare.

Defense Secretary Pete Hegseth and U.S. Indo-Pacific Command (INDOPACOM) Admiral Samuel Paparo confirmed in recent congressional hearings that the military is operating at least one live Bitcoin node, viewing the protocol as a “valuable computer science tool” for power projection in cyberspace. The revelations signal a significant shift in how the U.S. views digital assets, moving them from a purely financial concern to a potential instrument of national power.
"My short answer would be yes and yes," Hegseth said during a House Armed Services Committee hearing on April 29, responding to questions from Rep. Lance Gooden (R-TX) about Bitcoin's role in power projection and whether the Pentagon was leveraging it. Hegseth added that "classified" experiments were underway to leverage cryptocurrencies for American might.
The comments from the defense secretary came just days after Admiral Paparo told the Senate Armed Services Committee on April 22 that INDOPACOM is running a Bitcoin node for "operational tests to secure and protect networks." This strategic exploration occurs as global competitors increasingly utilize digital assets, with Iran demanding Bitcoin for passage through the Strait of Hormuz and reports of Russia using crypto to evade sanctions in its oil trade with China and India.
The Pentagon's interest appears to be a direct application of the "Softwar" thesis by Jason Lowery, an MIT fellow and active-duty military officer, which posits that Bitcoin's proof-of-work can create a form of cybersecurity deterrence and project power in a domain that otherwise lacks it. This development could elevate Bitcoin's status from a speculative asset to a strategic tool in geopolitical conflicts, potentially influencing other nations to re-evaluate its role in statecraft.
The Department of Defense defines "power projection" as the ability to apply elements of national power to influence others beyond a nation's borders. In the context of Lowery's thesis, this is achieved by linking cybersecurity to the real-world physical cost of energy through Bitcoin's proof-of-work (PoW) algorithm.
Lowery argues the global electrical grid can be viewed as a "macrochip," with Bitcoin mining operations acting as programmable logic gates. By requiring a "proof of work" or a computational cost to send control signals across a network, systems can be defended against low-cost attacks like Distributed Denial-of-Service (DDoS), email spam, and misinformation campaigns. This concept, which Lowery dubs the "Electro-Cyber Dome," is essentially a scaled-up version of Adam Back's 1997 "Hashcash" proposal, which Satoshi Nakamoto cited in the Bitcoin white paper.
The official acknowledgments from Hegseth and Paparo lend significant weight to these theories, suggesting they have moved from the fringe of Bitcoin forums to active consideration within the Pentagon. The experiments are taking place within a broader context of the U.S. government formalizing its relationship with Bitcoin, following President Donald Trump's March 2025 executive order to establish a U.S. strategic Bitcoin reserve from forfeited assets.
However, the "Softwar" thesis is not without its critics. Bitcoin developer and security expert Jameson Lopp, while praising parts of the thesis, ultimately concluded that it "falls short on acting as a blueprint for how we should build the future." A key criticism is whether the benefits of PoW for general network security require using the Bitcoin network itself, or if a separate, proprietary system would suffice. Furthermore, given that China dominates the manufacturing of specialized ASIC miners, critics question the wisdom of INDOPACOM securing its networks with a protocol that a strategic rival has a significant hardware advantage in.
While the grand vision of "hash rate wars" replacing conventional conflict remains speculative, the Pentagon's quiet experiments are a clear sign that the underlying concepts have value. The U.S. military's exploration of Bitcoin as a strategic tool marks a pivotal moment, validating its potential beyond finance and positioning it as a serious component of 21st-century statecraft.
This article is for informational purposes only and does not constitute investment advice.