Bitcoins in Space – Solving blockchain’s energy problem

May 21, 2018 by Andrey Povarov


Have you ever wondered why well-known blockchain systems seem to be more reliable than others?

If we consider some of the oldest and most popular blockchain networks, such as Bitcoin or Ethereum, most of their reliability is attributed to their proof-of-work (PoW) consensus algorithms. Having these algorithms helps keep the blockchain secure and tamperproof – but in order to maintain top security, everyone involved must expend a massive amount of computing power. This is because blockchain mining nodes, or “miners” compete with one another to complete transactions on the network in hopes of being rewarded. These transactions represent mathematical puzzles; they take a long time to solve, and must go through many guesses to find the right answer in the form of the proper “hash”.

In that vein, PoW comes with a huge price. Continuously burning electricity for computing and rapidly producing and replacing mining equipment to make algorithms work increases costs at an alarming rate. The power used solely for bitcoin mining is nearing 60 terawatt hours (TWh) a year – equivalent to what a small country typically consumes. And the yearly cost of sold specialized mining equipment totals to more than $5 billion.

While Bitcoin plans to continue to use PoW for the foreseeable future – which will require more and more electricity as the network’s complexity continues to increase – Ethereum has already started moving away from proof of work. Instead, Ethereum is looking into proof of stake (PoS), another consensus algorithm, which requires much less power to implement. This algorithm gives power to users in accordance to how many digital coins they already own. However, the PoS has its own share of issues, as those with more coins have more power in the overall system – potentially able to corrupt it. In addition, whether the level of reliability will be on the same level as before (or, ideally higher) remains to be seen, as well as how long Ethereum’s transition will take and whether it will be successful.

If at the end of the day there’s nothing better than PoW, what could we do instead? What if mining eventually consumes more power than the Earth can sustainably supply?

The solution could be…going to space.

Headed to space – Highlighting SpaceChain and Blockstream

The idea of launching satellites fully equipped with blockchain facilities into space has been a hot topic for years. And currently, there are two ongoing projects putting this concept to the test: SpaceChain and Blockstream.

SpaceChain launched their first space blockchain satellite node into low Earth orbit (LEO) last February. They have since started to build a connected software environment based on an open-source platform, allowing independent developers to use an orbital communications platform for blockchain. The architecture is based on Qtum’s blockchain technology, and in the future will add data storage that is not restricted by any regulations due to being in space – created around a token economy tentatively called SpaceCash.

Blockstream, on the other hand, is renting existing satellites instead of developing their own. These satellites are much further from Earth than SpaceChain’s, which covers a bigger area but compromises signal latency (in opposed to LEO, which minimizes signal latency but also minimizes coverage). The further the blockchain satellites are from Earth, the better the connection coverage, since the signal can cover more of the planet from a further distance. This makes it easier to propagate new bitcoin blocks even in places where internet access is limited – extending the range of bitcoin block propagation even to extremely rural places. However, users need to buy a $100 specialized portable device to connect to the satellites.

These two projects are only the beginning. In truth, the pivotal turning point will be the complete migration of the entire mining process from Earth to outer space…but what happens if we add renewable energy to the mix?

Combining blockchain with solar energy

Utilizing solar energy might be the cheapest way to mine, especially outside Earth – successfully avoiding the day-night dilemma and changing atmospheric conditions. For example, a station in geostationary orbit (meaning it’s orbiting 35,786 kilometers above Earth) would constantly be soaking up sunlight and providing energy output around the clock.

Peter Todd, one of the famous Bitcoin Core developers, shared this solar-powered outer space mining idea in his presentation at the 2017 Breaking Bitcoin conference in Paris. He stated that the solar power obtained and used to mine in space can easily transport bitcoins to Earth – and is both less expensive and more “green”, saving the planet’s energy for other uses.

So why not move the entire PoW infrastructure off of Earth and into space? It makes perfect sense.

However, there are challenges

Could harnessing solar energy to power blockchain in space ever be possible? How will it change the blockchain economy? It all depends on three factors:

Cost of hardware: While the net cost would be cheaper, steep expenses to launch satellites into space, maintain and replace worn-down ones are severe potential roadblocks. As a real-life example, the European Space Agency is working on solar-powered satellites to convert captured solar energy into a wirelessly transmittable form – and they face these same expenses.

Network latency issue: Due to distance, the network latency could slow down the propagation of new blocks. This gives an advantage to those who can send newly mined blocks faster – making space mining less efficient when the majority of miners are on Earth. Although, it only takes an estimated 0.3 seconds for a miner in geostationary orbit to create a new block, reducing efficiency by an insignificant 0.6%.

Where are majority of miners? Continuing from above, if instead the majority of miners are in space, miners on Earth will be at a severe latency disadvantage. If we moved the whole mining infrastructure closer to the Sun, the network latency would be counted in minutes, due to the speed of light taking 8 minutes to go from the Sun to Earth – and double for both ways. This would make space mining very inefficient if the network still needs to be transmitted to Earth.

The potential future of blockchain – in space

If PoW is not replaced by a more efficient process, could space be the answer to blockchain’s energy problem?

With the development of solar-powered satellites and mining facilities shifting gradually to outer space, a solar-based blockchain economy outside of Earth’s atmosphere could really take off – providing constant space-generated energy for a greener Earth. But whether this or another possibility is in motion, Luxoft is proud to be a part of blockchain’s future, with skilled experts across industries keeping up with the latest trends and discoveries.


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