Blockchain for Space Governance

Technology Policy

Blockchain for Space Governance

Paper
Posted on: 12th August 2022
Faith Obafemi
Technology and Public Policy 2021 Fellow

    Following the launches in July 2021 of Richard Branson’s Virgin Galactic flight and Jeff Bezos’s Blue Origin initiatives, space tourism is closer than ever. Though these flights were short in duration, the stage is set for longer trips in the not-too-distant future. Governments, industry operators and the general public must begin to imagine and plan for the technical and legal details of governance and financial exchange among private parties on the extra-terrestrial frontier.

    Humans have been captivated by space for millennia. Over the past 70 years, this curiosity has led to explorations and formed the basis for competition and collaborations among nations in the quest for space dominance. Below I outline a brief history of space activities, with a particular focus on how the legal principles of peaceful use have evolved as private operators enter and carry out new activities in space.

    Space governance exists outside the jurisdiction of terrestrial nations; with advances in commercial spaceflight, the new roles that private actors play in space will challenge traditional space-governance structures in new ways. At the same time, the past decade has seen the development of blockchain technology, expressly designed to enable decentralised actors to govern transactions outside traditional institutions and jurisdiction. Could blockchain technologies respond to future space-governance challenges?

    This paper is exploratory and futurist as space activities and blockchain use cases could evolve in multiple directions. A possibility, based on the speedy advancement in extra-terrestrial-related research and development, is that space becomes a settlement destination for humans in the next century.1 Tim Draper shares similar views on this in his interview with SpaceChain’s CEO, Zee Zheng. Another possibility is increased adoption in blockchain use cases at both national and international levels. Advocates of blockchain technologies similarly believe strongly in their adoption in governance and financial use cases at both national and international levels. Despite their uncertainty, this paper engages with these views of the future to consider their implications and potential interactions. It aims for governments, space actors and all humanity to begin considering these issues and prepare for the future.

    Figure 1 – Comparing costs for space-launch vehicles

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    Source: CSIS Aerospace Security Project

    Over six decades ago, Russian cosmonauts launched the world’s first satellite (Sputnik), setting the stage for the space race between the Soviet Union and the United States. Competition can be healthy. The space race sped up advancements in space technology, as well as contributing to offshoot innovations in medicine, navigation, food preservation and other fields. The reduction in space-launch costs contributed to the acceleration of the space race, as visualised in the infographic above from data collected by the Aerospace Security Project at the Center for Strategic and International Studies (CSIS).

    The International Legal Framework for Space

    The International Legal Framework for Space

    Space is “beyond territorial jurisdiction”, exacerbating the challenges posed by balancing the interests of multiple actors. Space governance consists of several layers that run in parallel to how governance of space has evolved since the Outer Space Treaty was signed in 1967. Space governance consists of international laws, called Space Law 1.0, focusing on global activities; national laws, called Space Law 2.0, focusing on national activities; and self-governing “by-laws”, called Space Law 3.0, focusing on activities of all operators.

    Space governance draws some analogies from the governance of the high seas based on the Common Heritage of Mankind doctrine. Both outer space and the high seas are to be used for peaceful purposes, and the responsibility for maintenance is to be shared by all nation-states. However, their governance generally differs with respect to non-appropriation or the claim of sovereignty. Perhaps the key difference in their governance is that the laws of the high seas are based on more certainty than the laws of outer space. For instance, the 1982 United Nations Convention on the Law of the Sea allows states to claim sovereignty or appropriate the high seas that are under 200 miles from their country’s coast (called the Exclusive Economic Zone). For outer space, there is still an ongoing argument for a consensus on where exactly space begins. As technologists envision commercial activity in space that goes well beyond the uses of international waters (for example in terms of duration of stay, communications limitations, and possible settlement), governance mechanisms and technologies will be insufficient.

    The governance approach towards the internet switched from a purely non-profit effort to becoming a driver for trade and economics. A similar shift is ongoing with commercial human spaceflight. Private actors are generally distributed and have the potential to create a decentralised secondary market for space resources, independent of national governments (more on this later). Evidently, better governance needs to be put in place. This makes transparency a critical component. Blockchain (and by extension, smart contracts and cryptocurrency) – a technology that embeds transparency by default – could help. How and why blockchain is relevant will be explored in later sections.

    Space Law 1.0

    The Outer Space Treaty (OST) is the central focus of Space Law 1.0, the first layer of space governance. Now over half a century old, it is the closest thing to a constitution for outer space. The focus of the OST is to maintain the peaceful use of outer space and prohibit the vesting of ownership in any one nation, declaring space a global commons. Other aspects of Space Law 1.0 include the Rescue Agreement, the Liability Convention, Registration Convention and the Moon Treaty.

    This layer is where interstate negotiations on space governance-related issues happen. Countries are represented through their ministers and rules set down in the form of treaties. As a general rule in international law, countries uphold their sovereignty and are not bound by external laws. To extend the obligations in treaties to private and nongovernmental organisations, states have to pass national legislation that binds their citizens and space actors within their jurisdiction. The most common way this occurs is through the issuance of licences for space missions. To obtain such a licence, actors must meet all obligations found in relevant treaties, but also contained in specific national laws. 

    Space Law 2.0

    Generally, the OST is only binding on countries that have signed and ratified the treaty. The period after the introduction of the OST marked the beginning of Space Law 2.0. Before then, governments were the main space actors and also the main investors. The entrance of private actors into space activities made governments realise that space governance needs to go beyond treaties. In an attempt to bind more countries by “governing the activities of states on the moon and other celestial bodies”, the Moon Treaty came into existence in 1979. However, the Moon Treaty has generally been considered a failure because almost none of the top players in space have signed or ratified it. This has resulted in more national governance efforts by key players such as Russia and the United States.

    When the United States sought to pass the Space Resources Exploration and Utilization Act of 2015, several countries questioned its provisions in relation to space governance. The law granted US citizens the right to “collect, own, transport and sell asteroid and space resources”. Of course, other countries called out the United States, considering that no nation may claim ownership of space resources. This is an example of Space Law 2.0, another layer of space governance, where intrastate negotiations happen. What this layer of space governance does is bring negotiations that happen on a global scale to a national level.

    Perhaps a better, though more controversial, example of Space Law 2.0 is the Artemis Accords, which exposes the gap Space Law 1.0 could not fill (or left open to interpretations) with respect to the mining of space resources. This bilateral law championed by NASA and the United States claims to align with the OST, which expressly prohibits national claims on extra-terrestrial resources. Meanwhile, the Artemis Accords allows private actors to claim private ownership because “the extraction of space resources does not inherently constitute national appropriation under Article II of the Outer Space Treaty”. For this reason, many have criticised the Accords as only serving the interests of the founding signatories, who are incidentally the most active space actors.

    Space Law 3.0

    Private participation and investment in outer-space activities are fast overtaking government investments, as evidenced by the success of private players such as Virgin Galactic and Blue Origin. Morgan Stanley projects the space economy will be worth at least $1 trillion by 2040.

    Figure 2 – Value of the global space economy

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    Source: Haver Analytics, Morgan Stanley Research forecasts

    This is quite understandable when one considers the vast opportunities and resources that space offers beyond Earth. The possibilities, from a galactic settlement to the mining of valuable near-unlimited materials and other resources, make it evident that humanity needs to work better on developing stronger governance mechanisms for space. Also, as we saw in Space Law 2.0, there appears to be a distinction between what is considered national claims of ownership and private claims of ownership regarding space resources.

    This is the layer that best embodies the reason why space governance should be jurisdiction-agnostic. It has become necessary to minimise the roles of nation-states, to make better binding rules on private activities. This minimisation is supported in discussions relating to internet governance. With the influx of private players and more public actors, this governance layer is where inter-operator negotiations happen. A recent example of Space Law 3.0 is Space Safety Coalition’s “Best Practices for the Sustainability of Space Operators”, a guideline to advancing the sustainable use of space. At the time of writing, there are 57 endorsees including Aerospace, Astroscale and Virgin Orbit.

    Outer-Space Blockchain Applications

    Outer-Space Blockchain Applications

    Blockchain was once exclusively used in finance but more recently it has been adopted in other sectors and industries, including space, with applications such as space technologies, the space supply chain, unlocking new business models, source tracking and space-resources governance. Some organisations with successful blockchain integration in space activities include Blockstream and Spacechain.

    Logistics and Supply Chain

    Supply chain in its traditional sense is a complex process of creation and distribution of goods. This complex process involves invoices and payments, communications and connections between various entities spanning months or years, and multitudinous locations. Clearly, these processes need documentation, tracking, contract agreements, automated milestones and so on. 

    With the advent of blockchain, international space-traffic tracking and monitoring systems will onboard a transparent, tamper-proof and automated technology. This is because blockchain’s proof of stake and DAO feature (see below) facilitate automation and transparency. 

    Spacechain, a Singapore startup, already has Spire, a supply and logistics company, supplying satellites and its Sabertooth computers for Spacechain’s on-orbit blockchain demonstration series. The success of Spire and Spacechain establishes the outer-space application of blockchain for logistics and supply-chain management.

    Ledger

    Whatever the industry, a record is needed. Blockchain technology is defined as a digital transaction ledger that records transactions transparently without middle men. 

    Blockchain will provide outer space with an immutable and automated information ledger. Until the end of the time, the transaction is there and tamper-proof.

    Source Tracking

    Source tracking is another win for the integration of blockchain in space. One of blockchain’s major tools, cryptography, is a technology that uses mathematical algorithms to record a transaction. Cryptography ensures that the records in a blockchain network are tamper-proof. With this, the process of moving goods between countries and continents can be transparently traced and tracked without the activities of middle men. Source tracking will significantly reduce disputes and blockchain as an all-party open-access technology will provide true records. This can help with managing the governance of space debris, which is mostly caused by collision or damage of space objects.

    Unlocking New Business Models

    Blockchain is a disruptive technology that unlocks new business models for space activities. Depending on the blockchain application, new business models such as fractionalisation and tokenisation of space assets can be unlocked. For an industry with a constant need for heavy funding, blockchain can be leveraged for raising capital through crowdfunding from token sales, an approach that highlights the fact that space belongs to everyone.

    Use of Blockchain as a Space-Native Governance Framework

    Use of Blockchain as a Space-Native Governance Framework

    Several features of blockchain technology, such as the fact that it is distributed (not tied to a single jurisdiction), immutable (tamper-resistant), transparent (trackable due to immutable audit trail), autonomous (relying on consensus algorithms rather than sovereign entities), alegal (existing outside the concept of law), and automated (programmable: code could be law), make it a viable candidate for adoption in space governance.

    One long-range manifestation could be in the use of blockchain for developing a space-native digital currency to power the fast-growing space economy in the coming decades. Efforts towards a global currency have been largely unsuccessful, largely because sovereign states fear the loss of their economic and political sovereignty and global dominance.

    Neither the dollar nor the euro is a global currency by design, though they have become dominant due to the industrial and geopolitical power of the United States and Europe. Space, an industry that has begun to gain rapid focus in recent decades, has developed within a global system where diplomacy and peacekeeping are tools employed for international relations. 

    For companies and countries to explore space independently, peacefully and natively, there is the need for a universally accepted currency. Although the dollar, euro, yuan and yen are top currencies used worldwide, there is no fiat that is singularly globally accepted. The decentralised blockchain’s cryptocurrency has the potential to become the accepted currency for space financial transactions. Crypto has what it takes to become the accepted galactic-reserve currency. ​​

    Trang Ngo identified three conditions necessary to consider crypto a global currency: a shared market, political neutrality, and a regulative body. The fact that crypto is digital, not beholden to any political power and relying on consensus algorithms for regulation, may make it favourable to space actors. However, there are some risks associated with the use of crypto as a galactic-reserve currency, such as volatility for non-stablecoins and de-pegging for stablecoins.

    Use of Smart Contracts for Space Governance

    “It’s all coordination.” This simple statement by Kevin Owocki, cofounder of Gitcoin, encapsulates both traditional and novel approaches to governance. In traditional governance systems, having a central entity tasked with the control of labour, funds and resources is the norm. This is, however, ill suited for space governance, where many players from multiple jurisdictions will lay (unequal) claim to resources. With the increase in participation of space actors (private and public), each with myriad interests, there is a risk for the space race to turn into a free-for-all without sustainable governance.

    Decentralised Autonomous Organisations

    At the centre of blockchain technology is the ability for a decentralised autonomous organisation (DAO) to govern itself based on code (smart contract) alone. Rules of governance embedded in code determine how the organisation is run. Think of it like an “If-Then” operation. If you pay your rent, then you will be able to unlock your house. Smart contracts are coded to execute automatically when specified conditions are met, and can be as simple or complex as necessary to cover the desired legal eventualities.

    DAOs are internet-native organisations for managing funds and labour towards achieving a specific goal. This goal could be buying the United States constitution, as the ConstitutionDAO attempted, or venture-capital investing, such as MetaCartel. DAOs are decentralised because members drive the activities and their governance rather than some hierarchical executives as seen in traditional corporate entities. They are autonomous because their funds and labour can be automatically distributed in accordance with governance outcomes. They are an organisation because DAOs are essentially a group of people with a specific goal leveraging the blockchain for coordination.

    Now imagine the DAO on a large scale, like a country or a continent. Or space. DAOs can be set up to address different needs and missions. For instance, there could be one DAO for satellites, another for human spaceflight, another for managing space debris and so on. DAO participants would be space actors involved in the key activities of the DAOs, whether government or private actors. 

    MakerDAO and MolochoDAO are presently the largest DAOs. MarrinoDAO is an organisation providing services for the approval process of airborne software and airborne electronic hardware (AEH) for all aerospace OEMs (original equipment manufacturers).

    In a DAO, a smart contract executes the rules of the contract without the need for a human intermediary. As there is limited human occupation of space, most space interactions and transactions are between machine and machine, making it a perfect scenario to leverage smart contracts for space governance.

    In traditional governance systems, the desire to be inclusive slows down the governance process in a bid to hear everyone’s opinion. However, with DAOs, size has little effect. Size does not affect DAO governance: often not all members participate in voting activities. 

    For instance, a space organisation has a need to launch a satellite project. The traditional process would be to raise funds from investors, apply for relevant licences and approvals, build and test, and eventually release into orbit. With blockchain integration, investors from anywhere on Earth can pool funds with easy tracking: investors can literally see their coins go to the moon and back. All the rules involved at each stage could be converted to code, making it easy to track and verify compliance. To combat space debris, the organisation would be asked to make a deposit which they would lose if the satellite was not retrieved at the end of life expectancy or when damaged. 

    Space-Resources Governance

    It is logical to impute from the OST that there should be no centralised resource-governance entity in space. Private operators in space will need to manage ownership and liability for a wide range of artificial and natural resources, including oxygen, lost equipment, boosters, dead spacecraft, meteoroids and space debris. Both artificial and natural space resources should be governed without a centralised governance entity. Cryptocurrency could be adopted in space by extension of it being a currency that is not controlled by a single entity. Space organisations could integrate smart-contract networks, an automation tool that writes contracts/rules as codes. 

    Generally, space actors, especially private actors, would prefer an agile governance approach that gives room for innovation, rather than the stifling centralised approach that nation-states prefer. As a result, governance approaches that embed incentivisation could be considered favourably. Space-resources exploration, utilisation and rental should be governed communally, aligning with the intention of the OST that space belongs to humankind.

    Space-Resources Monitoring

    Orbital debris is usually caused by the collision of satellites. As the space industry gets competitive, giant spaceship companies such as Boeing and SpaceX using large fleets will need to develop strategies to avoid causing accidental orbital debris. 

    In 2018, ConsenSys acquired Planetary Resources, an asteroid-mining company established in 2009. After the acquisition, ConsenSys focused its ideas on blockchain space mining. ConsenSys rebranded Planetary Resources as a subsidiary company, ConsenSys Space. To avoid accidental debris or other forms of debris arising from positioning and trajectory, ConsenSys launched TruSat, a blockchain-based ledger that will monitor the orbital positioning of spaceships.

    Using Blockchain in Space: Risks and Recommendations

    Using Blockchain in Space: Risks and Recommendations

    While there are myriad benefits to using blockchain for space governance, there are also risks. 

    1. Widening the digital divide between the haves and have-nots. Going digital – and certainly going to space – requires resources that are often not affordable to the average person. For countries with low GDP, competing in the emerging space economy is of low priority relative to the population’s primary needs. Yet they should not be left behind as this new economic and legal terrain is explored and exploited.
    2. Steep learning curve and power shift to the more technically capable. This is where capacity building comes in. The country that invests more in sending off citizens to acquire various skills and knowledge would reap bountifully. Using blockchain at any level requires an understanding of how it works. Such capacity building incurs huge costs in time and resources, which emerging markets may not be able to afford at short notice.
    3. Interoperability amongst the varied types of blockchain and limit of functionality to only within the technological ecosystem. All the wonderful blockchain features highlighted earlier only work for on-chain activities. Once an activity has to go off-chain, that is, interacts outside the blockchain technological ecosystem, the features become limited: for instance, verifying the authenticity of data entered into the blockchain and enforcing dispute resolution outcomes. In such a scenario, there will need to be reliance on trusted entities for data verification and outcome enforcements. Therefore, blockchain technologies can augment—but not replace—traditional governance mechanisms and institutions, even in international jurisdictions such as outer space.
    4. Sybil Attacks: The problem with rules is that there is always someone (or something) somewhere with a desire to break them. Like any digital network, blockchains are susceptible to Sybil attacks which can occur when malicious nodes/participants try to take control of the network. This can manifest in the form of executing a 51 per cent attack or outvoting honest nodes on the network. This is a corrollary to the above point: off-chain governance mechanisms and institutions are therefore a necessary complement to blockchain technologies.

    Policy Recommendations

    1. Accelerate Awareness: Most space events lack broad publicity. The publicity is usually directed at those who already participate in the sector. Now is the time to employ some real-time online and offline strategies. Organise physical, virtual and hybrid events. There is at least one hackathon happening daily in some part of the world. But how often, if at all, has a space-themed hackathon happened? A certain level of confidentiality often shrouds space-related developments and activities, especially for private actors and registered space objects that could be protected under quasi-territorial intellectual property rights. This is ironic considering that space is regarded as being under communal ownership. It is time to open-source space development if it truly is for humanity. Enthusiasts and scholars in the space sector need to start representing the industry as ambassadors in their local communities, advocating the common ownership of outer space.
    2. Encourage Experimentation: It is time to go beyond dressing up in spacesuits and ensure that schools teach the basics of space science and space ownership right from grade school. Children are persuasive ambassadors because of their curious and persevering nature. They can influence knowledge-sharing with others in their circle, including adults. Beyond educating young people about space and blockchain, there should also be more funding allocated for their ideas. Knowledge acquisition in the 21st century is expensive. It is time to start awarding scholarships to deserving individuals and communities with an interest in space-related blockchain applications. Interestingly, STEM attracts lots of funding, but it seems little is set aside for space-related studies and research.
    1. Stronger Regulations: Current realities and developments highlight the need for an update of space regulations, both national and international. To reflect the open-access principles of outer space, it is essential that new laws and agreements are as sociocratic as possible. We could codify new laws with automation capabilities using blockchain. This does not mean the state will no longer be needed; rather, sociocratic laws will emphasise communal participation while minimising state control. Such participation can heighten ownership of responsibility and lead to increased compliance.

    In Orbit

    In Orbit

    Blockchain is already being applied to extra-terrestrial ventures by startups, established companies, governments and even individuals. One reason for decentralising space governance is that humanity might outlast nations. This is also more reason for space actors to play the long-term game.

    A major part of this work is devoted to the use of blockchain in outer space. Conversely, space can also be used for blockchain: specifically, the use case of outer space as a decentralised data centre for blockchain network nodes. Satellites can also be used as nodes in blockchain technology. Square’s decision to invest $5 million in BlockStream’s facility to build solar-powered energy for bitcoin mining confirms that satellites might be the next blockchain network nodes.

    Cryptocurrency’s features of decentralisation, no single issuing entity, speed and relatively low transaction costs make it a good fit for use as a space-native digital currency. Coordination for both humans and inanimate objects in outer space could improve through the use of smart contracts, a technology that embeds transparency, traceability, auditability and automation. Recognising these possibilities is the basis for the European Space Agency’s Space 4.0 project that aims to evolve in tandem with the ongoing industrial revolution dubbed industry 4.0.

    The use of blockchain for space governance is not without challenges. Blockchain is still nascent in most industries, requiring a steep learning curve and scaling technical hurdles in adoption. The ideas shared in this piece may appear futuristic and farfetched as it is uncertain when such situations will manifest: perhaps in a decade or a century or more! As both sides mature, specifically as space-related costs lower and accessibility increases, and blockchain adoption increases, we may see partial, full or even no use of blockchain in space governance. Actually, it does not matter if blockchain is used or not; what is important is that the status of space as a global commons is protected for the benefit of humanity.

    In conclusion, the key takeaway from this paper is that present human coordination on Earth might not be suited for human coordination in space (natively—only happening in space). While the assumptions made in this paper might take a long time to realise, the inclusive conversation on how coordination will evolve in outer space needs to start happening now. And it needs to be inclusive because, at the moment, it appears that only dominant space actors have a seat at the table. Blockchain is proposed as one tool that can help to both shape inclusive evolvement and advance coordination in outer space.

    Lead Image: TBI

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