An introduction to Blockchain from SpaceChain's perspective.

1. Blockchain in Space:
An Introduction
#NewSpaceEconomy
Alessandra Albano, Director of Operations
SpaceChain Foundation
GSTC 2020 - Singapore

2. Applications of Blockchain
#NewSpaceEconomy
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

3. #NewSpaceEconomy
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

4. #NewSpaceEconomy
Building a blockchain infrastructure in space
Aerospace Engineering Mission Management
Blockchain
Development
Innovation and R&D
Space industry know-
how
Law, Regulatory
Compliance &
International Relations
Economics, Game
Theory & Token Design
Product Development
Blockchain + Space

5. #NewSpaceEconomy
Begun with the 2008 financial markets crash
Blockchain 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.

6. #NewSpaceEconomy
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 stamp
2. A “digital signature,” very much like a username
3. 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

7. #NewSpaceEconomy
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

8. #NewSpaceEconomy
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 occur
2.The transaction must be verified (time, participants, amount)
3.The transaction must be stored in a block
4.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?

9. #NewSpaceEconomy
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”?

10. #NewSpaceEconomy
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?

11. #NewSpaceEconomy

12. #NewSpaceEconomy
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”?

13. #NewSpaceEconomy
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”?

14. #NewSpaceEconomy
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

15. #NewSpaceEconomy
“In short, because it assumes everybody’s a crook,
yet it still gets them to follow the rules.”
Morgen E. Peck
1.
In short, why can we trust a blockchain?

16. #NewSpaceEconomy
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

17. #NewSpaceEconomy
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

18. #NewSpaceEconomy
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

19. #NewSpaceEconomy
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, and
3.to exchange value within it (for example, data or computational power
across satellites).
Digital Assets in Space

20. #NewSpaceEconomy
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
Uniqueness
No double spending
Properties of a Blockchain
Authentication

21. #NewSpaceEconomy
Categorising Blockchains
Public 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

22. #NewSpaceEconomy
Categorising Blockchains
SpaceChain Foundation’s Decentralised asdasd Infrastructure
SpaceChain Foundation’s Decentralised Satellite Infrastructure
Public 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

23. #NewSpaceEconomy
Blockchain in Space
SpaceChain Foundation’s Decentralised asdasd Infrastructure
Component Ground Space
Disk 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

24. Decentralised Satellite Infrastructure
#NewSpaceEconomy