Last week, we introduced SpaceQ readers to “Blockchain” technology. Blockchain uses encryption to create databases (often transaction ledgers) that have three key qualities: they’re decentralized, they’re transparent, and they’re immutable—changes cannot be rescinded and data cannot be removed.
Its most famous and best-known application is in “cryptocurrencies” like Bitcoin. With the end of the “crypto bubble”, though, both state and non-state actors are becoming more and more interested in other potential uses: like “smart contracts”, interbank settlements, settling securities, and even distributed programming.
Another trend, however, is in attempting to bring blockchain into space: both in national and supranational space programs, and in the commercial space sector. In this entry, we will get into more detail on that trend. Why the interest? How does blockchain fit into the space sector?
Why would blockchain need to go into space?
And why would the space sector need blockchains?
Blockchains escaping their terrestrial constraints
The first question is simpler to answer: it’s because the Internet has changed.
The Internet was famous for its fault-sensitive design. Both the TCP and IP packet-based protocols were created to ensure that network issues don’t impede the transfer of data. The Internet isn’t just one network, it’s a network of networks. No single network owner should be able to control the network as a whole. As the saying went: “the Internet interprets censorship as damage and routes around it”.
This is vital to both blockchain and cryptocurrency. Distributed databases only works if the various “nodes” can talk to each other. Nodes cut off from the overall blockchain network become functionally useless; and if a network is split, the entire database may become unreliable or even unusable.
Yet the Internet has changed as it became critical to the modern world’s economy and society. It has been streamlined, and now critical networks — including critical cables — transmit the data for cities, regions, or even whole countries. There is no way to “route around censorship”, and state actors routinely censor the Internet. Those restrictions can easily extend to blockchain networks. Already, though opinions vary, China may have indicated that they could ban crypto on their networks.
Space can provide an escape from these earthbound barriers. Micro-satellite networks are already big business, with companies like OneWeb, Helios, Planet, and others building out constellations of satellite networks to provide broadband Internet, support IoT (Internet of Things) devices, or provide high-quality, low-cost accessible Earth imaging. These constellations could be potentially used as independent networks between blockchain nodes, or even potentially serve as blockchain nodes themselves. No matter what national governments may prefer, blockchain networks will continue operating, ensuring their efficacy and reliability.
Some firms are even building their own blockchain-focused microsatellite networks, like Singapore’s SpaceChain and Canada’s Blockstream. They’re getting support from cryptocurrency and blockchain enthusiasts willing to shoulder the risk to build these networks, and can likely count on the business of more traditional firms exploiting blockchain for terrestrial purposes like transactions and logistics.
While most blockchain activity is still likely to take place on the terrestrial Internet, having that “alternative backup system”, as Spacechain CEO Zheng Zuo said to TechinAsia, will help ensure that blockchain-based networks and technologies will continue their reliable operation.
But does space need blockchain?
“Why would the space sector need blockchain” is a more difficult question. Cryptocurrency enthusiasts and terrestrial blockchain developers may want to have their “backup system”. And, yes, there is definitely a market for space-focused companies in catering to these needs. But is there any solid reason for incorporation of blockchain tech into other space-based applications?
This question isn’t as straightforward.
The existing space tech and space development sector is still dominated by national and supranational space programs: like NASA, the Canadian Space Agency, the European Space Agency (ESA), China’s CNSA and Russia’s Roscosmos. They have their own means of secure, reliable communications, and will not share crypto enthusiasts’ appetite for evading national authority.
These agencies are noticeably cautious. A recent white paper by the ESA on earth observation (EO) pointed out that “distributed ledgers are not yet considered to be immediately applicable to space systems operations and EO data exploitation.” They are clear that they believe that “there is a need to demonstrate how blockchain could help solve existing challenges for the EO sector”, that “many of the benefits of blockchain are theoretical, and that scalability is a large concern.”
Yet they do recognize the opportunity. EO is growing due to the benefits from Big Data applications, artificial intelligence (AI) and machine learning. Machine-to-Machine (M2M) communications within networks is becoming more routine, and data/information network flows are becoming less linear and more dynamic. ESA believes that the growth of these automated dynamic networks may create a need for “a secure, definitive reference for data distribution and tracking, as well as the record of processing steps”. The traceability and immutability of these kinds of transaction records will be invaluable — as will those of (as three examples) mission planning and operations, digital supply chains, and physical supply chains in EO manufacturing. This is especially important as EO and other space operations become more vulnerable to cyber-attack.
ESA has also been involved in events focused on supporting space-based blockchain applications, and recognizes that its role may well be in creating a bottom-up environment for private-sector innovators.
NASA engineers have expressed similar views on how blockchain could provide interference-resistant and reliable networking. With the FAA’s requirement that all aircraft flying in the American National Airspace System adopt the Automatic Dependent Surveillance System (ADS-B), both military and civilian aviators are becoming increasingly concerned about the security issues with ADS-B’s lack of a robust security model. Both are concerned about third-party spoofing, and about its unencrypted “plaintext” broadcasts.
NASA’s Ronald Reisman has proposed a blockchain-based solution to this issue. The complex “hyperledger fabric” solution differs from fintech-style, “coin” based blockchain networks. It still provides the immutability and transparency needed, however, while also respecting the privacy and security needs of military aviators. It may be the solution American aviators are looking for.
This is a terrestrial airspace application, rather than directly space-based. But it shows the interest that organizations like NASA are taking in the application of blockchain to their problems. It is still early days, but the opportunity is there.
The issues with blockchain in space: a humble solution?
Since it is early days, though, there are a variety of challenges, both for blockchain and cryptocurrency enthusiasts and for space-focused institutions and firms looking to incorporate blockchain into their projects and business models. Scalability is one, of course; a Bitcoin-style blockchain ledger has serious scalability issues. But as the NASA example above demonstrates, there are other blockchain applications that are better suited for the task.
The biggest challenge was identified by ESA years ago: hype.
Blockchain is a potentially invaluable technology, but thanks to the general hype cycle of new technologies, it is easy for individuals and organizations to pour both money and time into technologies and tools that may well not warrant it. Those bets often don’t pay off. Unregulated cryptocurrency speculation often involved literal bets, and were often fraudulent scams and grifts.
It would makes sense that existing public-sector and private-sector space-focused actors would shy away. Space applications are often expensive, and lives can be on the line. Risk is unacceptable.
That risk aversion led to the other great blockchain challenge: skepticism and fear.
The cryptocurrency crash of 2018 would lead any sensible institution to be skeptical. Anybody who’d seen hard-earned money evaporate on crypto bets would also be justified in their fear. Even those institutions who are focused on non-coin blockchain technology as a problem-solving tool, would be forgiven some skepticism. Investors could have avoided blockchain-focused firms, since cryptocurrency has been so tremendously volatile.
In turn, as ESA said, the uses for space-based blockchain outside of cryptocurrency are still largely speculative. We still don’t know how blockchain will fit into the broader economy.
The solution to both is a bit of humility and perspective. The early 2000’s Internet crash elicited comments on how the Internet was overhyped, wouldn’t improve productivity or have a major impact on business. Nearly 20 years later, those arguments are clearly wrong. Machine learning is a vital part of modern computing, but was neglected for decades until its moment came. And, yes, the space sector has had its own share of nay-sayers.
In each case, though, the reality is a humble one. The Internet isn’t a neon virtual reality: it just lets us more easily communicate, work and socialize. AI isn’t artificial sentience: it’s a tool that allows us to sift through data and to automate drearily repetitive cognitive tasks. And while space travel remains an object of wonder for millions (even billions) of people around the globe, the actual space sector focuses on humble but vital tasks like Earth observation, communications, and scientific experimentation.
Blockchain is also likely reach a “boring but useful” state of maturing. Observers are already starting to notice that terrestrial blockchain is moving in that direction, as both entrepreneurs and investors look for better uses of their time and money.
And in space, ESA and NASA (among others) are making it clear that any distaste for cryptocurrency speculation won’t stop their interest in exploiting blockchain as a technology, and providing opportunities for innovative companies and enterprising investors to develop space-based blockchain applications.
Who are these companies? Who are these investors, and why are they embracing blockchain in the wake of the crypto crash? That is what we’ll address next week in the last installment of this series.