EXTRA-TERRESTRIAL APPLICATIONS OF BLOCKCHAINS AND CRYPTOCURRENCIES

EXTRA-TERRESTRIAL APPLICATIONS OF BLOCKCHAINS AND CRYPTOCURRENCIES

Dr.Kartik H

ABSTRACT

In this paper, I analyse the extra-terrestrial applications of blockchains and cryptocurrencies. I evaluate as to how value based transactions can be conducted in outer space. First, I explain the concept of cryptocurrencies (also referred to as cryptocoins in this paper). Then we discuss the concept of Regulated and Sovereign Backed Cryptocurrencies (RSBCs). 

Later, we envisage a scenario where extra-terrestrial settlements use money to exchange value. We then assess the feasibility of paper money systems on future settlements outside earth. The various advantages of BlockChains in facilitating economic activity in extra-terrestrial settlements are deliberated. Finally, the paper concludes as to why cryptocurrencies will be best suited to be the mainstream bills of exchange in extra-terrestrial settlements.

INTRODUCTION

A cryptocurrency is a medium of exchange using cryptographic techniques to safeguard transactions and also manage the formation of additional units of the currency.

A BlockChain is a widely disseminated archive of data that maintains a continually-expanding register of records fully and reliably protected from any alteration or modification. Each block has a timestamp and link to the preceding block.

A Crypto wallet is an encrypted electronic device that allows an individual to make electronic cryptocurrency transactions. Each wallet will have a public key visible to anyone. But it can be operated by only a person who has a private key. Transactions on the cryptocoin network are usually anonymous.

When people send cryptocoins to each other, someone has to keep account of who spent how much at what time. In case of fiat money (or paper money) it is done by banks (known as Trusted Third Parties, for which they charge a commission).But in case of Cryptocoins, it is registered on a ledger called BlockChain (with nil or minimal fees).

The cryptocoin network makes this possible by detailing all the transactions made during a certain time frame into a list. 

This list is known as a block. A certain set of people called 'miners' verify these transactions mathematically and register them on the BlockChain. Those bona-fide miners who have successfully verified the transactions are paid freshly created Cryptocoins. This is how miners are rewarded, and new cryptocoins are generated. This is also the reason why no transaction costs are levied, as the network (in the form of miners) verifies the transactions.

Bitcoin is a peer-to-peer based cryptocoin which is not backed by any commodity and (unlike fiat money) carries no sovereign guarantee whatsoever.

Regulated and Sovereign Backed Cryptocurrencies (RSBC), on the other hand are government backed cryptocurrencies akin to paper currency, but in digital form. In this system, the cryptocoins (known as NationCoins) are backed by Sovereign Guarantee.

They are run on a highly secure Controlled BlockChain(CBC) in which Sovereign backed Cryptocurrencies will be transacted without any hassles. NationCoins are completely managed by the Sovereign Authority i.e. the Government.

This system is based on the K-Y Protocol ^[1]. The K-Y Protocol is a set of rules and instructions to implement the Regulated and Sovereign Backed Cryptocurrency (RSBC) system.

When the first human colony starts to function on Mars, what might be the best possible medium of exchange that can be used?

It can be cryptocurrency systems. Using paper money or plastic money on Mars or anywhere outside Earth is ruled out. That is because; carrying physical money into space is a costly process. 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. 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.

For a future Martian colony, it may be greatly confusing to use paper money. Moreover, it will cost more money to carry lower denomination bills outside space i.e. A $1 bill will also cost $1 to be launched to space. So, its actual value will be $2. Even more paradoxical will be to carry coins in space. It will cost almost $2 to carry a ten cent American coin to space. (A One dime coin weighs approximately 2.27g)

Therefore, it will be illogical to use paper or plastic money in space due to the physical issues and costs involved. It has to be cryptocurrency. Even plastic money will need card readers or other instruments which will be cumbersome to carry space-wise.

The first Lunar and Martian colonies can use cryptocurrency for trade and as a medium of exchange.

We must take into account several factors that will make the future space economy a possibility. The first is distance. The Moon is only      3, 84,000 Km (approx) distance from Earth. Light takes hardly 2.6 seconds to travel from the Earth to Moon and back. If there is a colony on the Moon, it will in fact be possible for people on Earth to transact with the lunar colony in real time.

The Moon will become just another “province” of Earth. A blockchain transaction can easily occur without much trouble. RSBCs can be used as they will provide stability of value unlike decentralized cryptocurrencies. Moreover, governments will have a major role in colonizing space. As such they will be bound to use RSBCs.

Mars is a different case. It takes light at least 20 minutes to travel from the earth to mars. In case of Mars, it will be very difficult to carry out a real-time transaction. Unlike the Moon-Earth system, we cannot maintain a single Controlled Blockchain for Mars and Earth. What can be done is that a separate Martian blockchain with its own cryptocurrency can be created which can be traded in an international cryptocurrency exchange. Powerful microprocessors embedded in objects flown to (or created on) Mars can do “Smart Mining” ^[2] and provide the basis for a money exchange system. Machines containing embedded chips will 'Smart Mine' Cryptocurrencies which can be used for Extra-Terrestrial transactions. Thus, machines launched into outer space will automatically add value to the World Economy.

The same holds true for the later expansion of human footprint across the solar system and beyond.

By the time man has setup a full-fledged colony on Mars and moved beyond the Kuiper (asteroid) belt, the extra-terrestrial economies can be linked by an intricate network of Controlled BlockChains. There can be a Marscoin, on a Martian blockchain, LunarCoin, JupiterCoin, SaturnCoin, TitanCoin, and so on, on their respective Controlled Blockchains.

BlockChains can also be used for Extra-Terrestrial contracting, voting, taxation, banking, etc. Any Extra-Terrestrial value based transaction can be conducted through BlockChains. BlockChains, in actuality will make it possible for rules, regulations and laws to be enforced in space without the need for human supervision or intervention.

CONCLUSION

We have seen how it will be very expensive to use paper money in outer space. Moreover, it will also be difficult to use paper money systems as a means to assess value-addition to the economy. By using BlockChains and crypto-currency we can achieve multi-faceted economic results. Various aspects of Extra-Terrestrial life like banking, taxation, voting, contracting, law enforcement etc. can be realized successfully through BlockChains and cryptocurrencies. Thus, paper money is a hindrance to space exploration and settlement, whereas cryptocurrencies facilitate space travel and extra-terrestrial settlements. BlockChain systems therefore can form the basis of future Extra-Terrestrial societies.

REFERENCES

[1] The K-Y Protocol: The First Protocol for the Regulation of Crypto Currencies (E.g.-Bitcoin)

[2] SMART MINING - THE FUTURE OF LIVING - https://goo.gl/gPDPEv