Bitcoins, a cryptocurrency based on a peer-to-peer (P2P) network, have now become the central components of a potential satellite launch. The project aims to bring the network to off-grid areas and in places plagued by expensive or faulty network connections, further expanding the cryptocurrency’s reach. The bitcoin network isn’t governed by a central authority. Rather, a process called “mining” manages transactions and issues out money, all of which is balanced on a shared public ledger, or block chain.
A preliminary design contract between Dunvegan Space Systems and Deep Space Industries calls for the development of an orbital system for the not-for-profit BitSat project. The constellation of small BitSats (small 10-cm boxes) will utilize an orbital node for the bitcoin P2P network to enhance resiliency against disruptions or outages. BitSats will also provide cross-check capabilities, verifying that blocks available on the terrestrial network haven’t been spoofed while also providing the latest blocks to locations off the terrestrial grid.
As Megan Gannon at Yahoo points out, this is not the first time bitcoins have met the space frontier:
British billionaire Sir Richard Branson recently announced that his commercial space company, Virgin Galactic, would start accepting payments in the cryptocurrency for suborbital flights aboard SpaceShipTwo. So far, the Winklevoss twins—famous for their dispute with Facebook founder Mark Zuckerberg—are among Virgin Galactic's bitcoin-paying customers.
Back on Earth, bitcoins may be deemed a commodity rather than a currency by the IRS, but that hasn’t stopped the digital transactions from changing the way we pay for things. RT.com explains the tumultuous bitcoin landscape:
The announcement comes at a curious time for the increasingly popular currency, with some experts wondering if bitcoin’s own success will ultimately lead to its demise. Governments and financial institutions have not been more encouraging, with the IRS announcing bitcoin would be regulated as a commodity rather than a currency, and the CEO of Chase bank questioning if users should trust bitcoin (price fluctuated from $230 in April 2013 to below $70 in July, then surpassing $600 in November).
The project is expected to cost around $2 million—equal to about 4519 bitcoins—with funding provided by a Kickstarter-esque crowdsourcing campaign. More details about the project, including architecture, design, and operations concepts, will be made public later in 2014 via BitSats’ Google Group.