Cryptocurrency Is Strengthened By Space Exploration
One of the most curious things about the emergence of cryptocurrencies has been its tie to a nascent movement in commercial space exploration and commercial space launches. At first, it seems like an odd fit — until one begins to understand that private modules and satellite communications as well as further space exploration dovetails with the ideological and practical effects of cryptocurrency.
Start with Blockstream’s satellite API for bitcoin. This 24/7 broadcast of the latest state of the bitcoin blockchain from space serves a number of purposes, providing another layer of communication as a backup. With six satellites up currently, coverage spans most of the world.
Bitcoin’s peer-to-peer network is distributed and resilient, but it still suffers from dependencies. There is a need for nodes to connect to the Internet in order to communicate with one another to reach consensus. While an attack isolating one node from this consensus state (known as an Eclipse attack) would be theoretically very expensive, it would be less than an attack on the entire chain, and could be used to create double-spend situations among a limited number of nodes. Ensuring a backup broadcast might mitigate individual-level attacks.
Ensuring a backup for the network as a whole might also strengthen the blockchain. Governments have shown themselves capable of censoring the entire Internet because of content it didn’t like. By taking off the dependency on the Internet by just a little bit, satellite beaming may help save bitcoin from a future coordinated state attack — and will help ensure 24/7 uptime for all peers even if a nation-state decides to totally take down the Internet within its geographical jurisdiction.
It may also, if costs of satellite launch decrease and communication improvements increase between space-orbiting objects, eventually serve as a way to get people who currently don’t have access to the Internet, access to the data needed to onboard them onto bitcoin. In 2016, the World Economic Forum noted that 4 billion people didn’t have Internet connection — the majority of the world. In order for bitcoin and cryptocurrencies to truly expand their reach exponentially, either people will have to have more complete internet coverage or there will need to be alternative ways to broadcast the consensus data blockchains are dependent on.
This new foray into space exploration comes at a time where national demands for cybersecurity for private and state-based spacecraft are growing. The cost curve will inevitably descend, and make state-based attacks in space (whether kinetic through missiles or jamming of signals) more compelling. Yet with international treaties meant to demilitarize space, there is an unique time period for services to grow with a lower cost of defense — since any attack would have to leverage cutting-edge capabilities in space, and may violate international laws and norms.
It’s not just about providing an alternative way to broadcast cryptocurrency data so as to make the cryptocurrency even more decentralized and censorship-proof however. Cryptocurrency companies have also acquired space venture companies focused on astroid mining. ConsenSys Founder Joe Lubin had the following to say:
“Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution. And it reflects our belief in democratizing and decentralizing space endeavors to unite our species and unlock untapped human potential.”
It also reflects a shrewd view on the dynamics and economics of the future. For a host of practical reasons, space mining is now an economic fantasy: the costs of transporting large amounts of heavy goods across vast expanses of space are simply too high.
Yet, just like the early days of genome sequencing and the development of the Internet itself, the costs of the hardware required for space launches and space travel will tend to decrease as more research is focused on the subject.
It is possible that in the next century, space mining will become profitable enough for commercial ventures to develop at scale. When they do, there will be plenty of targets, including 16 Psyche, an astroid with a treasure trove of precious metals. CNET speculated that it could be worth $700 quntillion based on the fact that the massive meteor is metallic and could have tons of gold, silver and other precious commodities.
The current world economy, for reference, stands at about $85 trillion, with about $9 trillion in total gold supply — an amount almost sure to be dwarfed by the nominal value of the precious metals that could be mined on one asteroid alone. An event like this has shaken the world economy before: when Spain discovered the New World and zealously exploited the new masses of gold, it started an erosion in gold value that made the Spanish Empire become the first sovereign to default and caused devastating economics effects across Europe.
You can expect the same thing to happen if gold were suddenly to start to pour in from astroid mining — eroding its position as a store of value. Cryptocurrency can not only help fund space exploration: it also stands to benefit from removing physical constraints on the store of value that gold and other metals represent.
By valorizing the industrial portion of gold and providing enough supply so that the speculative value fades, for example, space mining could provide an massive aggregate increase in human capabilities while constraining excessive consumption. The “paradox of plenty” could come into play here if governance structures built around this new economic impetus are as antiquated as they are now, but leveraged in the right way, space exploration could free more humans to reach their fullest potential.
Metal-based commodities, limited by their scarcity, will no longer represent a large viable alternative to government-backed fiat. Instead, cryptocurrencies have shown that it’s possible to valorize a technological system that transmits value without relying on the industrial properties of certain stones or government force. That value may fluctuate but it is not directly tied to government agencies or the supply of gold. It is value that will endure in a context of space-faring, and mineral acquisition that surpasses anything we have ever done on Earth.
As space exploration becomes more and more viable for private individuals, and the cost curve permits companies to get involved in all aspects of space where once it was the monopoly of governments, creators focused on the decentralizing aspect of cryptocurrency as well as its financial value will benefit — and ultimately, as space exploration becomes more sophisticated, cryptocurrencies will represent an alternative value system that can endure.
According to Forbes