Run the Numbers #02: Bitcoin is Extraterrestrial
Bitcoin & Data Science
In the first installment of this series I wrote about the permanent, immutable nature of Bitcoin’s ledger, the blockchain. In this post I plan to explore one of the most interesting ways in which that data is transmitted: from space. That’s right, the Bitcoin network was first extended into space in 2017 with the launch of Blockstream Satellite! Blockstream, a company that funds open source Bitcoin development and offers a number of Bitcoin-related products, streams the blockchain down from the satellites as a free service. Since launch, they have expanded to enough satellites in order to bring 24/7 coverage to the entire globe.
The idea behind Blockstream Satellite is that it provides a means to receive updated Bitcoin data in an anonymous way without an internet connection. It can also be used to download the entire history of Bitcoin transactions — a process known as Initial Block Download. This is incredibly useful for a number of reasons, the most obvious being for people living in remote areas without reliable internet access. It is also an option for people living under government regimes where the use of Bitcoin is prohibited like Egypt, or in China where the government surveils all internet usage (I am not recommending anyone break the law).
Blockstream sells antenna kits ranging from $400–800 but it is also possible to configure a general purpose antenna (for instance a satellite TV antenna) with a low-powered computer. Still, it is a considerable investment of money and effort to set up. But as Bitcoin and privacy advocate Matt Odell frequently says, the proverbial “Uncle Jim” could run one full node — and an antenna in this case — for an entire family, business, or group of neighbors. The decentralized nature of Bitcoin allows for anyone in the world to run a node and verify all transactions, but if someone you know and trust is already running one, you could easily just connect to that node.
This might all sound a bit crazy to stream network data from space down to Earth when most people have access the internet, and in most cases it would be. But with Bitcoin, being the world’s first digital money which cannot be manipulated or stopped by any government, it is critical to have redundant, resilient systems in place. The idea of Bitcoin is not exactly popular among many governments and central banks around the world.
Just one month ago protests erupted in Belarus over disputed presidential election results. President Lukashenko — an authoritarian leader in power since 1994 known to violate human rights — declared a victory with 80% of the vote. After the election was quickly determined to be rigged (Lukashenko is widely unpopular these days) the people of Belarus took to the streets and were met with a swift and harsh reaction from the police. Part of this reaction was to literally shut down the internet. Millions of Belarusians went without internet for days as the state has complete control over Internet Service Providers (ISPs). If someone were waiting for funds during this time of crisis, Bitcoin would have been the ideal money and Blockstream Satellite would have been a great tool to facilitate the transaction.
Iranians were victim to a similar fate in November of last year during another round of anti-government protests. The Iranian regime shut down all internet access for days in an effort to stop social media reporting of the protests and government response. Bitcoin is particularly useful in Iran as the local currency, the Rial, has been experiencing crippling inflation rates for several years. Another example of hyperinflation is in Venezuela, where the Bolívar has lost over 50,000,000% of its value since 2016. And here too, there have been major power outages (and thus internet outages) in recent years due to poorly maintained hydroelectric dams. Bitcoin has become quite popular in Venezuela as a means of preserving wealth in a hyperinflationary environment, and combining a satellite with a small generator or solar panel would have been one of the only ways to use it during the outages.
Additionally, Blockstream has released a Satellite API which harnesses the power of the Lightning Network (a second layer scaling solution built on top of Bitcoin) to allow for short messages to be broadcast from the same satellites. By paying just a few Sats (1 Sat is equal to 0.00000001 BTC), anyone can broadcast immutable messages to the entire planet. Some anonymous Bitcoiners have taken to posting blogs or news headlines on a regular basis. This way someone in North Korea could receive updated news snippets via a satellite antenna, circumventing the communist government’s censorship of all outside media.
While it is certainly not for everyone, the ability to receive a stream of Bitcoin network data from space without using the internet is incredibly powerful for some. However, it is important to remember that so far the only option to do so is by using Blockstream Satellite, a private company. In Bitcoin we do not like central points of failure so it is my hope that in a few years we will see at least one other similar service, improving network redundancy that much more.