Blockchain in Space:An Introduction

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Alessandra Albano, Director of OperationsSpaceChain Foundation

GSTC 2020 - Singapore

Applications of Blockchain

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Supply Chain Management & Logistics Healthcare Finance

Provenance

Timestamping

Cross-border Settlement

Traceability

Billing

Pharmaceutical Supply Chain

Record sharing

Financial products

Payments

Central Banks Stable Coins

Cryptocurrencies

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The Blockchain market expected to grow from USD 1.2 billion in 2018 to USD 23.3 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 80.2% during 2018–2023 (source MarketandMarkets, 2018).

Market Value

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Building a blockchain infrastructure in space

Aerospace Engineering Mission Management

Blockchain Development

Innovation and R&D

Space industry know-how

Law, Regulatory Compliance &

International RelationsEconomics, Game

Theory & Token DesignProduct Development

Blockchain + Space

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Begun with the 2008 financial markets crashBlockchain technology is often identified with its first and most successful use case to date: Bitcoin.

It all started with the 2008 financial markets crash, which prompted a person (or group of people) working under the pseudonym of Satoshi Nakamoto, to publish a Whitepaper explaining how to build a digital currency that would not need any intermediary as the arbitrator for transaction settlement.

In other words, Satoshi created an alternative to a system where banks were trusted intermediary and demonstrably a point of failure for the entire financial system and the global economy. Bitcoin is an application, or use case, of the underlying technology: Blockchain.

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We can think of blockchain as a chain of blocks, where we are actually talking about digital information (the “block”) stored in a public database or ledger (the “chain”).

“Blocks” on the blockchain are made up of digital pieces of information (which are always present):

1. A time stamp2. A “digital signature,” very much like a username3. A block ‘name’ called a Hash 4. The Merkle Root, or the Hash of all the previous blocks since the

beginning of the chain

Essential components

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Logical Diagram of a Blockchain

Block Header

Block Header

Hash of Previous Block Header

Merkle Root

Block 1 Transactions

Block 1

Block Header

Hash of Previous Block Header

Merkle Root

Block 2 Transactions

Block 2

Block Header

Hash of Previous Block Header

Merkle Root

Block 3 Transactions

Block 3

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When a block stores new data it is added to the blockchain. These are the necessary conditions for it to happen successfully:

1.A transaction must occur2.The transaction must be verified (time, participants, amount)3.The transaction must be stored in a block4.The block must be given a hash

When a block is added to a public blockchain (such as Bitcoin and Ethereum), it becomes publicly available for anyone to view (there are also private blockchains which we will cover later).

In other words, the transaction is broadcasted to the network.

How does it work?

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Each computer in the blockchain network has its own copy of the blockchain (sometimes a full copy, other times a ‘light’ version of it depending on its size).

Each computer is called a node.

With blockchain, there isn’t a single, definitive account of events that can be manipulated. Instead, a hacker would need to manipulate every copy of the blockchain on the network.

This is what is meant by blockchain being a "distributed" ledger.

Why is the ledger “distributed”?

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New blocks are always stored linearly and chronologically. That is, they are always added to the “end” of the blockchain. If you take a look at Bitcoin’s blockchain, you’ll see that each block has a position on the chain, called a “height.” As of January 2020, the block’s height had topped 615,400.After a block has been added to the end of the blockchain, it is very difficult to go back and alter the contents of the block. That’s because each block contains its own hash, along with the hash of the block before it. Hash codes are created by a math function that turns digital information into a string of numbers and letters. If that information is edited in any way, the hash code changes as well.In order to change a single block, then, a hacker would need to change every single block after it on the blockchain.

Why is blockchain so secure?

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The decision over whether a block is added to the chain is not taken by any single central entity, a trusted party that functions as a validator but it is taken in a de-centralised way.

The block is added only if the entire network of nodes come to a consensus.

Blockchain is also referred to as a trustless system: parties don’t need to trust one another, they can rely on mathematical tests to validate the transactions.

Why is blockchain “decentralised”?

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There are different ways to come to this consensus among the nodes, and this is a core difference among the different blockchains (for example, Ethereum and Bitcoin).

The tests, called “consensus models,” require users to “prove” themselves before they can participate in a blockchain network.

The two most famous examples are the “Proof of Work” (PoW) and “Proof of Stake” (PoS).

Why is blockchain “decentralised”?

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In the Proof of Work system, computers must “prove” that they have done “work” by solving a complex computational math problem.

In Proof of Stake instead the node that creates the next block is chosen based on how much they have ‘staked’, or very simply on the number of tokens that the node owner hold for the particular blockchain they are attempting to add a block to.

Power consumption is a core factor when designing blockchain solutions in space.

Consensus models

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“In short, because it assumes everybody’s a crook, yet it still gets them to follow the rules.”

Morgen E. Peck1.

In short, why can we trust a blockchain?

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The core difference between Distributed Ledger Technology (DLT) and Blockchain Technology consists of the inclusion of economic layers in the latter, made of digital assets with built-in design to become an incentive for good behaviour on the network, and punishment for malicious one.

This is commonly done by applying Game Theory, a field that allows to understand why groups of individuals act in the way they do in the search for the fulfilment of their personal goals.

Incentives and Punishments

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To take an example from Bitcoin, the reason that the miners mine new blocks is because they are incentivized to do so by receiving a monetary reward in bitcoins every time they do so.

Equally, without (monetary) punishment or deterrent, there would be no security within a blockchain.

In simple terms, if it was not unprofitable to hack, a blockchain would be hackable.

Incentives and Punishments

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Economic layers means digital assets associated with value that can be exchanged and/or stored.

If the digital asset is (primarily) used to obtain access to and perform a specific value exchange within a platform (similarly to how we use a token at a fun fair to go to the rides within it), then we have a utility token.

If the monetary value can store value and be exchanged similarly to how a traditional currency would be (referred to as ‘fiat’ money), then we have a security token or a crypto-currency.

Types of Digital Assets

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A closed platform for space infrastructure would need a digital asset to:

1.provide incentives and punishments to keep itself secure,2.as a way to ensure its participants could access it, and3.to exchange value within it (for example, data or computational power

across satellites).

Digital Assets in Space

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Blockchain properties at a glance

Automation Machine to Machine

Decentralisation

Trustlessness

Validity Continual system

self & cross checking

Cryptography PKI

Permissionless (Like the Internet)

Immutability Append-only

UniquenessNo double spending

Properties of a Blockchain

Authentication

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Categorising BlockchainsPublic Consortium Private

Example Ethereum, Bitcoin Libra JP Morgan Chase

Description Decentralized, permissionless, with built-in economic incentives

Permissioned, partly private and semi-decentralized

Centralized but distributed

Access No permission required Members only, who could be co-founders

Qualified users via strict approval

Typical Implementation As a public blockchain application

Via a private blockchain implementation

One company launches and uses it internally

Innovation Target New business models Processes within existing relationships

Supporting existing models or launching new services

Blockchain Governance Public consensus Equal weight to all participants

Controlled by a single owner

Number of users/nodes Hundred of thousands/Millions

Dozens to few hundreds One, with varying number of access points

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Categorising BlockchainsSpaceChain Foundation’s Decentralised asdasd Infrastructure

SpaceChain Foundation’s Decentralised Satellite Infrastructure

Public Consortium PrivateExample Ethereum, Bitcoin Libra JP Morgan Chase

Description Decentralized, permissionless, with built-in economic incentives

Permissioned, partly private and semi-decentralized

Centralized but distributed

Access No permission required Members only, who could be co-founders

Qualified users via strict approval

Typical Implementation As a public blockchain application

Via a private blockchain implementation

One company launches and uses it internally

Innovation Target New business models Processes within existing relationships

Supporting existing models or launching new services

Blockchain Governance Public consensus Equal weight to all participants

Controlled by a single owner

Number of users/nodes Hundred of thousands/Millions

Dozens to few hundreds One, with varying number of access points

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Blockchain in SpaceSpaceChain Foundation’s Decentralised asdasd Infrastructure

Component Ground SpaceDisk usage (Nearly) Unlimited & fast Lower powered devices

Power consumption 100% utilization for as long as needed (limited by stability/thermal concerns)

Power is a scarce resource

Data speed, bandwidth & latency

Fast Depends on satellite availability

Latency 0 For non-critical things, can be much higher

Upgradability Reasonably frequent Much longer than on ground

Consensus model Any PoW totally unfeasible. If wanting full in orbit (full node plus mining), PoS good choice. Others can be explored

Nodes Any Light nodes (bitcoin SPV, ethereum style light sync, etc). If not fully validating nodes, more flexibility

Decentralised Satellite Infrastructure#NewSpaceEconomy