Cryptos in Space!

. 4 min read

No, this is nothing to do with ‘moon’ memes. That’d hardly appropriate for today’s market. Let’s talk instead something much more fun. Will cryptocurrencies work in space?  It’s not a purely hypothetical question.

I remember the excitement of the space race as a young child, shuttles blasting off every few months and space stations being built. It was obvious then that the future involved exploring and colonising the solar system at the very least… Soon we’d have the whole galaxy to play with.  

OK, so, that didn’t go quite according to my childhood sci-fi dreams of the time, but finally things do seem to be turning around.  Just as with the creation of a true hard currency, if the states do not provide then free enterprise does - and the expectations we all had of NASA are being realised by private finance, perhaps as that generation of entrepreneurs who were raised on the space-race dreams come into their own...

Richard Branson has been selling tickets for Virgin Intergalactic for many years in a process not unlike a lengthy ICO, including a pair or seats to the Winklevoss twins famously paid for in Bitcoin (at 2014 prices - ouch!). Elon Musk has just sold the first seats on SpaceX to circumnavigate the moon in 2023, and Jeff Bezos’ Blue Origin has just announced the conceptual design phase of a large lunar lander that it says will provide reusable access to the moon's surface and its resources.  It won’t be long before we’ll get through the billionaire tourism phase, and people actually start to live and work on other bodies in our solar system.

Looking for a moment beyond how simply mind-blowingly exciting this is, has anyone thought about what they’re going to do for money up there on the moon, or whilst travelling? What about when we get to Mars, or further afield?

In the global history of pioneering, merchants and traders have always simply set up their stalls where they found demand, and anyone off to homestead in a new area would first have had to consider a way to survive and feed their household. As settlements grew, specialisation and artisanal skills rapidly emerged, but if you were seeking your fortune over a mountain in the wild west then it was pretty easy - you brought your haul of dollars with you, or stash of gold. Everyone knew what they were worth, and even if local marketplaces for other scarcities emerged, there would have been an agreed unit of exchange.

How are we going to manage when the nearest reserve bank is light years away though, and in an environment where securely making a deal could be a matter of life or death? Are we going to expect the SWIFT network to clear payments between a colony on Mars and a bank in New York? What about waiting for a cheque to clear, or getting your Paypal account verified? It’s going to take some thinking about. On which planet is your ‘trusted third party’ going to sit, in this scenario, capable of confirming both ends of a transaction with any meaningful reliability, at least over any acceptable timeframe?

Interspace shipments themselves will attract such intensity of resources, that sending anything physical will need the utmost consideration and costing. Assuming we don’t crack teleportation any time soon, and that 3D printing will always have its limitations, we will need to consider the staggering resource implications of moving things about. That applies to physical money too, not something we normally have to think about at a terrestrial scale...

A fascinating paper from India by Kartik Hegadekatti in 2016 points out that if you carry a $100 note into space at $1,000/Kg it will cost $1 (as a $100 bill weighs approximately 1g). It means that the value of $100 bill will then be $101. Getting out of the gravity of earth is just the first step though, because If it is carried to the Moon it will cost even more. If you carry it to Mars, it will cost even more than that. So a $100 bill may actually have a value of $150 on Mars (and never mind what inflation may have done to its value, in a journey potentially lasting years). So we are going to have a bit of an arbitrage problem, I think, on top of everything else.

There’s a very real chance that cryptocurrencies will provide a viable solution.

If it takes approximately 10 minutes for a new block of transactions to be added to the Bitcoin blockchain, that’s something we’ve all learned to live with.  It then takes about 1 1/4 seconds for a signal to reach the Earth from the Moon - which doesn’t add any appreciable clearing time to those that we are used to. There is nothing in the traditional financial sector which comes close.

Not necessarily for local transactions, which will be able to take place off-chain via closed systems, perhaps not unlike the lightning network. But what about if you need to order a new shipment of spacesuits to be sent up from earth, or an allocation of oxygen cylinders to be delivered from their construction base in the asteroid belt?  

You’d need a an airtight agreement (sorry!).  A smart contract on the Ethereum network would be the ideal way to escrow the significant sums involved, and ensure successful delivery of critical shipments, over vast distances - whilst the supply chain itself is mediated by blockchain technology, to ensure tamperproof handoff of vulnerable technology and lifesaving supplies.

It’s fun to think about the future, and if you’re reading this you surely have enough of an interest in blockchain and crypto to make you an extremely early adopter in tech terms anyway.  So let’s imagine - perhaps the ultimate solution will localised planetary blockchains, traded on an intergalactic exchange, because most commerce will as here and now take place within communities directly. Assuming continued projections of data volumes and Moore’s law, a lot will probably be on-chain in real time at speed we cannot yet conceive of…

Meanwhile between the different colonies, there will be a marketplace as long as humans are still in charge. So I see that Marscoin is up 3 points against Crypto-Ceres today, but InterplanetaryCoinSwap’s peer to peer trading platform still has some great deals to be found, whether or not you and your correspondent are on the same bit of rock hurtling around the sun or not… People will still want to do business with people, and I bet the star-telegram group will still be going strong too.

Whether or not you dreamed of going to Space Camp as a kid, just being in the crypto ‘space’ makes you part of the journey towards the future. And it’s good to reach for the stars, just to see where you end up.