Power Outages in Spain and Portugal Highlight Cash's Reliability

Recent widespread power outages in Portugal and Spain have highlighted the enduring value of cash during critical situations. The outages, which lasted for about 18 hours, left millions in the dark and exposed the vulnerabilities of digital financial systems. Spain lost approximately 15 gigawatts of capacity in just five seconds, equivalent to 60% of its national electricity demand. Without internet and electricity, daily financial instruments like home banking services, digital wallets, and ATMs became obsolete, underscoring the importance of physical cash as a reliable fallback.

During the outages, cash regained its status as the preferred payment method. Natalie Newson, Senior Blockchain Investigator at CertiK, emphasized that access to physical cash remains critical, not only in developing countries but also in developed nations. Digital systems, whether centralized or decentralized, are ultimately dependent on power and connectivity. Cash provides a reliable fallback in scenarios where digital tools fail.

The episode also raised questions about the usability of cryptocurrency during times of crisis. Despite its core principle of decentralization, blockchain technology relies significantly on centralized infrastructure. Most blockchain nodes are hosted on a small number of centralized cloud providers, creating single points of failure and exposing blockchain networks to external control. Fundamentally, blockchain runs on the Internet, which is centrally governed by ISPs and subject to geopolitical pressures. Many blockchains also operate with only one or two client implementations, meaning that any flaw or bug in that client software can impact the entire network.

The same limitations apply to the applications that manage crypto assets and process transactions. The blockchain may be decentralized, but access to it is not. Most users depend on internet service providers, centralized exchanges, and mobile devices—all of which are tied to national power grids and telecom systems. Without these utilities, the decentralized promise of crypto becomes practically irrelevant for the average user. Cryptocurrency might inadvertently weaken public trust in its capabilities by not functioning as a genuine alternative financial solution when needed most.

Public trust in payment methods grows from their ease of use, so if crypto wallets become inaccessible during emergencies, individuals might be reluctant to use them as their main way to pay. Still, experiencing these issues now can pave the way for future enhancements. These events can highlight weaknesses that lead to better solutions. Just like the early internet had to overcome outages, crypto is still evolving to meet the demands of the real world.

Existing features within crypto technology already enable some offline uses, and expanding on these could provide a clear direction for development. Some hardware wallets with long battery life and offline capabilities offer a glimpse of resilience, especially in peer-to-peer transfers. While there are some interesting developments, like satellite nodes, mesh networks, or ultra-low-power wallets, these systems are not yet widely adopted. Right now, most of the crypto ecosystem still relies on traditional infrastructure. The blockchain can survive offline, but the tools most users depend on are not built for that kind of environment yet.

Similar considerations arose when discussing the potential of Decentralized Physical Infrastructure Networks (DePINs) to lessen overall dependence on centralized electricity grids. DePINs have gained significant traction in the crypto sector due to their potential to decentralize various services using blockchain and token rewards to manage, own, and operate infrastructure. These networks are increasingly facilitating network connectivity and community-based access to electricity. Some experts suggested this technology could help lessen the impact of outages affecting centralized distribution channels.

In theory, DePINs might enhance grid resilience, potentially reducing the likelihood of countrywide power outages. They introduce a level of flexibility and programability that could theoretically facilitate demand-response programs or incentivize people to adjust their energy usage during peak times. However, it is far too early to think of DePINs as a comprehensive solution that can singlehandedly solve a country’s power stability issues. Rather, focus should be on the targeted integration of DePINs into existing grid infrastructure to help alleviate stress on the grid and demonstrate the worth of DePINs in a real-world setting.

From his perspective, D’Onofrio stated that DePINs could provide a more complete solution when combined with other tools that bolster local resilience to these threats. We’re likely to see more integration with decentralized infrastructure, like community-run mesh networks or solar-powered nodes. If combined with tools like delayed-broadcast wallets or peer-to-peer communication protocols, these systems could keep crypto activity going even when traditional services are down. It’s about building more localized resilience into the global system.

Despite their differences, crypto and traditional finance ultimately grapple with many of the same underlying problems when operating during infrastructure disruptions. Policymakers must treat infrastructure resilience as the bedrock of digital finance. That includes diversifying energy sources, supporting local microgrids, incentivizing offline crypto solutions, and ensuring regulatory frameworks accommodate these technologies. In a crisis, access matters more than innovation—preparing now ensures digital systems stay functional when they’re needed most.

Moving forward, the strength of the digital economy will be determined by its physical infrastructure, and prioritizing this could position crypto for long-term success. The recent power outages in the Iberian Peninsula underscored the enduring importance of cash as a financial lifeline in times of crisis. With global economic systems increasingly depending on digital finance, experts emphasized the need for policymakers to develop lasting solutions that ensure infrastructure resilience and emergency preparedness.