Outer space and blockchain economics

Outer space and blockchain economics

illustration istock

by Andrei Povarov

Ongoing discussions about the huge amounts of energy used for mining and the possibility of increasing the efficiency of this process with some useful calculations have so far not yielded any practical results.

The amount of power consumed today to support bitcoin is about 58 terawatt hours annually — comparable to the energy used by the entire country of Ireland. And the gradually increasing level of difficulty in computation (and accompanying increase in power consumption) makes the situation even worse.

But possibly a solution can be found by taking another, totally different route.

As incredible as it might seem, one such route might be to move the mining process completely off the planet and into outer space.

Indeed, natural power sources such as solar energy (especially where it would be neither dependent on the day-and-night cycle nor obstructed by atmospheric conditions) could be the cheapest way of mining — which could change the whole economy of blockchain.

More and more thought has been given to this idea lately. For example, Peter Todd in his presentation at the Breaking Bitcoin conference last autumn looked at the idea of outer space mining from the point of view of energy transfer via bitcoins.

Indeed, producing bitcoins in orbit could help solve the problem of transferring power obtained in outer space to Earth by converting energy into hard-to-solve hashes, which would save the equivalent amount of electricity on Earth.

But if we go further and consider transferring not only power but also the entire infrastructure supporting power-of-work operations from earth to outer space, it could actually make our environment greener.

There were two significant performance jumps in the history of bitcoin: moving from CPU to GPU; and moving from GPU to ASIC. Next, the "pure" solar energy devices for outer space mining could eventually make obsolete all previous methods, with Earth-based ASIC mining fading away just as mining via CPU or GPU did as it became increasingly uncompetitive. And the key reasons of this new economic change are cost of hash-generating power and latency versus majority location split.  

Regarding the hash power cost, a station in geostationary orbit (35,786 kilometers above earth) will always be getting sun, thus will provide continued energy output. It will be stronger, also, as solar irradiation (measured in watts per square meter) outside of the Earth's atmosphere is higher.

The network latency issue may mean slowing down the propagation of new blocks, though. This will give the advantage to those who can send newly mined "qualified" blocks faster, thus making mining less efffective from space as long as the majority of miners are on Earth.

Todd estimated that it would take about 0.3 seconds for a newly found block by a miner in a geostationary orbit. This should reduce efficiency by only 0.6 percent — quite an insignificant disadvantage.

However, the situation would revert when the majority of mining power became concentrated in space. Then the miners on Earth will be in this latency disadvantage.

The quest for more solar power could eventually move the whole mining infrastructure closer to the sun. The latency in this case would be counted in minutes (with speed of light taking eight minutes to go from sun to Earth or 16 minutes for a round trip) making mining completely inefficient.

But again, with the majority of power moving eventually to near-sun orbits, the disadvantage would shift to the rest of the network, i.e., for those miners who are on or near Earth.

Are we technically ready for this? Studies on building space-based solar power satellites that would convert captured solar energy into a wirelessly transmittable form and send it to a remote receiver station began back in the 1970s. Now, the European Space Agency is actively working on such a project stating as main challenges the following:

  • The need to construct large orbiting structures that would require the launch of a significant amounts of materials into space where they would need to be assembled, and then maintained and replaced over time.
  • Due to the harsh space environment, the lifetime in space of solar panels using current technologies would be significantly shortened compared with their lifespan on Earth's surface.
  • Wireless power transmission to the Earth would require very large diameter receiver antennas (not an issue for bitcoins  used as an energy transfer solution.)  

So what will happen next and how will the new blockchain economy evolve?

With SPS development and mining facilities moving gradually to outer space, a new blockchain economy based on solar power would most likely evolve and gain critical mass, totally replacing the infrastructure on Earth ... or ... the power-of-work consensus mechanism would be replaced by other, far less power-intensive, but no less reliable, forms of consensus — whichever comes first.

Andrei Povarov works on the adoption of emerging technologies for a large Switzerland-based IT company. He also leads digital management and disruptive technologies programs at the Russian Presidential Academy. Andrei holds a PhD and an MBA and has many years of experience in the IT and payments industry.

Topics: Bitcoin, Blockchain, Cryptocurrency, Mining

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