Bitcoin Blockchain Beamed From Space

First for some context. In the last 12 months bitcoin (in AUD) has risen 616%, year to date 312% and since we started offering it 2 weeks ago 58%. That is with less than 0.1% of the world active in it, let alone understanding it. Just think for a minute what happens when that little figure even doubles….

It is easy to forget in our connected world that according to estimations, more than half of the world’s population lacks internet access. This is due to a combination of cost and availability issues and is a notable hurdle for truly global Bitcoin adoption.

A company by the name of Blockstream however are set to provide Bitcoin access to almost every person on the planet according to a statement from company CEO Dr. Adam Back. Dr Back is a cryptographer who has worked in the space since 1995 and incidentally holds a Ph.D. in distributed systems and computer science.

Blockstream is a provider of products and services that augment blockchain technology, providing hardware and software solutions targeting a wide range of applications including fraud detection, security and accessibility. Their purpose is elegantly described by their slogan: “Blockstream solves problems that undermine trust in today's financial systems”.

The Blockstream network is a service that utilises satellites to broadcast the Bitcoin blockchain from orbit allowing users to access the data required to participate in the Bitcoin network like they would receive audio data from digital satellite radio services. This method of reception, like GPS, does not rely on the typical terrestrial data connectivity provided by the internet. 

According to their website, there are currently three satellites in use for this purpose, Galaxy 18, EuTelSat 113 and TelStar 11N which combine to cover Africa, Europe, South America, and North America as indicated by the following coverage map.

The cost advantages possible with the satellite broadcast system are potentially enormous. Blockstream explains that “every ten minutes, a new block is added to the Bitcoin blockchain and running a full Bitcoin node requires downloading these new blocks. Over the course of a month, a Bitcoin node downloads approximately 8.7 GB of new blocks.” 

Obviously a full node is a heavy weight example but it does illustrate the limitations of circumstances where data is metred or where network bandwidth is restricted. Such circumstances will benefit greatly from the satellite broadcast approach.

Furthermore, Blockstream claim that the satellite approach improves the stability of the Bitcoin ecosystem and this claim does make sense. Although peer-to-peer networks are inherently robust against failures in the network (whether these are related to the computer nodes or the connectivity between them), having access to an alternate data source that isn’t reliant on primary terrestrial internet connectivity is a significant improvement towards the reduction of latency and the improvement of security.

According to Blockstream, “ground stations, called teleports, will uplink the public bitcoin blockchain data to the satellites in the network, which then broadcast the data to large areas across the globe”. This mechanism will facilitate Bitcoin propagation to people located in rural or remote areas for the purposes of transacting and mining.

With the dollar price of Bitcoin achieving all-time highs again in the past days, the type of innovation seen in the Blockstream network is something that is likely to persist. In order to keep this in perspective however as investors, let’s finish with some thoughts from Newscape Group chief investment officer, Charles Morris who wrote a piece in the latest World Gold Council’s “Gold Investor” publication. “Bitcoin and gold can happily coexist and the cryptocurrency would not rival the yellow metal”. Furthermore, Mr Morris asserts that “gold should continue to thrive in the digital age as it remains the ultimate store of value. Using the blockchain, modern communications enable gold to be redistributed around the world at the touch of a button, without ever leaving the vaults”.