TO INFINITY AND BEYOND

Over the years, all kinds of incongruous objects have been beamed into space, ranging from a corned beef sandwich to a Beatles song. But few were more unorthodox than Bitcoin, which was still a niche digital currency on Earth in 2017 and unheard of across the galaxy. Nevertheless, that’s exactly what happened when Bitcoin developer Blockstream established a satellite network capable of broadcasting Bitcoin transactions from 22,000 miles above the planet.

While the stunt had clear value from a marketing perspective, there was greater rationality behind the move. The Blockstream Satellite network was designed to serve as the ultimate disaster-proofing mechanism, mitigating the risk of systemic shocks that could compromise or isolate the standard internet infrastructure upon which the Bitcoin network relies. This was a network of last resort for money of last resort.

By continuously broadcasting the latest state of the Bitcoin blockchain from space, the satellite network ensured that anyone could maintain synchronisation with its global consensus. If even a single operator was running a Blockstream Satellite receiver in a particular region, they could receive the correct block data and propagate it to their local peers, keeping the entire area in sync and preventing a network split.

While the launch boosted Bitcoin’s censorship-resistance, it also served as an effective advertisement for the Lightning Network, the Layer 2 scaling solution with which Blockstream was heavily involved. Investing in infrastructure that hardened the Bitcoin base layer would protect Blockstream’s own commercial products and the broader ecosystem that relied on them.

Bitcoin in Space

In keeping with other businesses that required a satellite link, Blockstream wasn’t operating its own earth-orbiting hardware, the costs of which would have been prohibitive. Instead, it leased bandwidth on commercially operated geostationary (GEO) communications satellites that maintained a fixed position relative to the Earth's surface, orbiting at approximately 22,000 miles.

Launched in August 2017, the Blockstream Satellite network offered a 120 kbps data rate and still required users to download the Bitcoin blockchain’s history using the internet. Subsequent iterations, however, offered enhanced performance and eliminated the need for an internet connection to bootstrap a Bitcoin node.

The power the network bestowed was the ability to operate a Bitcoin full node that synced its data entirely from space, completely independent of a traditional internet connection. But beyond this novelty, there were several tangible benefits it provided. In addition to enhancing Bitcoin’s censorship resistance, it offered redundancy. The satellite network could ensure that Bitcoin nodes remained online and in sync even if the local ISP suffered an outage. Finally, it enabled unparalleled privacy, allowing nodes to connect to the network without broadcasting their location.

A number of projects have taken advantage of the Blockstream Satellite network, ranging from a Venezuelan Bitcoin group seeking to overcome the country’s poor internet infrastructure to several mining startups. The real value of the network, however, has been in serving as a proof-of-concept demonstrating that decentralised digital systems can be anchored to physical assets that transcend the politicisation and technical limitations of the traditional internet. Even if the web dies, Bitcoin will live on.