Crypto Market Commentary
30 January 2020
Doc's Daily Commentary
The 29 January ReadySetLive session with Doc and Mav is listed below.
Mind Of Mav
The Decentralized Network Being Built In Space
This week we’ve run the gamut of cutting-edge technology.
On Monday, we explored how JAMstack presents a vision of leaner and faster websites.
On Tuesday, we discussed how 5G is the first in a new generation of super-fast connectivity than underpins an Internet that has more accessibility and less latency.
On Wednesday, we spoke in length about how space is the new frontier of a worldwide communication layer that is truly accessible to everyone — allowing more users and devices to be able to utilize blockchain.
Today, we’ll continue that thread with the democratization of space.
As we covered yesterday, the average cost of getting 1 Kilogram to space has been nearly reduced by a multiple of 10 in the last 20 years. What used to cost $20,000 now is a mere $2000.
Like I mentioned, while that’s great for large budgets that can eat such a huge cost, that is still very obstructive to the majority of operations. Not to mention, the costs of the satellites themselves, both in development and in physical weight, are astronomical (pun intended).
So, what if we could disrupt the satellite industry — and introduce decentralization to space itself?
That’s exactly what Micro and Nano satellites aim to do. The former is classified as weighing 10-100kg, while the latter weighs 1-10kg.
In particular, we want to look at the potential of Nano satellites and a version of them called CubeSats.
Likely weighing only 1kg, these satellites aren’t the big ones you might be familiar with from high school science class nor do they resemble the 227kg Starlink satellite we looked at yesterday. CubeSats are barely bigger than a standard Rubik’s Cube, and are relatively cheap to construct at around $50,000.
That means we could theoretically build and launch a functioning satellite into Low Earth Orbit (LEO) aboard a Falcon9 rocket for a grand total of $2,750. This concept was not even remotely feasible just a few years ago.
So, before we geek out on accounting in space, let’s first cover what CubeSats can actually do.
CubeSats allow people to track natural disasters, document deforestation, and monitor crop yields. As Futurism recently reported, they might even enable a new kind of orbital advertising — just look at the night sky for a sponsored message from Pepsi. In any event, these tiny satellites are on the brink of an innovation explosion the world might not be ready for.
More than 2,500 CubeSats have been launched so far. The Federal Communications Commission (FCC) expects that in the next few years, as the space industry is estimated to grow eightfold, that number will climb in an unprecedented way, with CubeSats collecting terabytes of data on the world below.
It’s important to recognize the CubeSat for what it represents more so than what it is. Alone, a single CubeSat isn’t terribly powerful. The imaging power of CubeSats is nowhere near the granularity of a billion-dollar satellite like those used by the military. And because they’re so small, there’s no way to build in redundancy, meaning that if one component breaks, the whole CubeSat quickly becomes useless. But what CubeSats lack in size, they make up for in numbers, cheapness, and ease of deployment.
And, just like nodes on a blockchain network, a constellation of CubeSats could orchestrate redundancy through decentralization, relay data around the globe, or coordinate for consensus. Just like collective power of Internet Of Things (IoT) working collaboratively on Earth, the Internet of Space Things could open up new possibilities for data collection and relaying.
In one way, this “democratization” of space technology by commercial entities also means that private companies now get a say in who gets access to the data collected from space. Countries that don’t have billions to invest in a space program can use data from commercial CubeSats to monitor crops or extreme weather. And private companies, especially those in the commodities world, can infer valuable information about everything from agricultural yields to power plant productivity by analyzing satellite imagery. Images from satellites monitoring, say, a crop like corn, allow commodities traders to see what’s growing where — weeks before a USDA report on crop yields would normally be released.
At one point in time, this kind of technology was controlled by nation states, mostly the U.S. and the Soviet Union. Now, instead of the U.S. government deciding who gets access to the information picked up by a satellite, it’s likely to be a company or even a decentralized network.
Furthermore, in the modern era one of the principle ways a nation controls its population is through information suppression. If there was a decentralized network that anyone could connect to anywhere on Earth that had no centralized control, much like Bitcoin, how would that change the relationship of citizens to authoritarian regimes?
One of the concerns I raised with Starlink’s coverage is that they are a centralized entity that could censor their network coverage however they like — hence determining what version of truth they find palpable.
Conceivably, while Starlink and their competitor OneWeb will provide worldwide internet access through a combination of large LEO satellites and phased-array receivers on Earth, we could soon see this technology developed to the point of being viable on a CubeSat. With enough CubeSats in LEO, all working together to form consensus, we would have the world’s first truly decentralized network — censorable by consensus only.
It’s an interesting idea and forms a vision of a world beyond borders and the first steps of truly moving beyond the Pale Blue Dot we call home.
In parallel to the developments of CubeSat technology, we should also briefly discuss the revolution in rocket science going on right now that will certainly help accelerate the democratization of space.
As you might know, companies like SpaceX and Blue Origin are primarily concerned with launching rockets and spacecraft that serve large satellites and even future manned missions. As we discussed yesterday, the Falcon9 from SpaceX can deliver a payload of 22,800kg to LEO and the Falcon Heavy can deliver a massive 63,800kg (only $1,410/kg!). Compare that to the massive $54,500/kg cost of NASA Space shuttles.
SpaceX made a massive leap forward by emphasizing the reusability of their Falcon9 rockets, and they have claimed that a single Falcon9, while initially coming with a $62M price tag, will withstand 100 launches, although heat shielding and some other parts must be replaced every 10th launch. Meanwhile, Blue Origin’s New Glenn is designed for 25 cycles. Only the fuel, requiring $200,000 per launch and 0.4% of the total payload, needs to be replaced every launch. That emphasis on reusability helped drive down the cost per kg for a Falcon 9 from $4,000 to the $2,750 mark.
In many ways, this advancement alone has ushered in a new space race by bringing down the effective cost of getting a payload to space; instead of having to build a new rocket every launch, rockets now act more like planes.
As Musk said, “If one can figure out how to effectively reuse rockets just like airplanes, the cost of access to space will be reduced by as much as a factor of a hundred. A fully reusable vehicle has never been done before. That really is the fundamental breakthrough needed to revolutionize access to space.”
However, there’s another equally important advancement happening right now.
Just as the shift from large satellites to Nano satellites opens a world of possibilities, so too does a shift from large reusable rockets to smaller payload reusable rockets.
In particular, the Electron developed by Rocket Lab is a two-stage launch vehicle capable of delivering a payload of 150-225kg to an orbit of 500km.
As it currently stands, smaller rockets have a higher cost for their payload.
Using some large assumptions, one analyst speculates the cost-per-kg of the SpaceX Starship, a super heavy class rocket, would only be $271.90, meaning if you’re looking to visit Low Earth Orbit you’d be looking at a total price $73,490 per passenger round trip. In contrast, the Electron is over $22,000 per kg with a much smaller payload capacity.
However, that will come down soon with the advancements Rocket Lab is making. In late 2019, Rocket Lab brought online a new robotic manufacturing capability to produce all composite parts for an Electron in just 12 hours, compared to the 400 hours traditionally required when building by hand. The process can make all the carbon fiber structures, as well as handle cutting, drilling, and sanding such that the parts are ready for final assembly. The company objective as of November 2019 is to reduce the overall Electron manufacturing cycle to just seven days.
Additionally, the Rutherford engine used by the Electron has several cutting-edge advancements in both capability and in manufacturing. This allows the capability to scale production in a relatively straightforward manner by increasing the number and capability of 3D printers — eventually allowing the full manufacturing process for a LEO-ready rocket to be automated and extremely expedited.
In December, Rocket Lab successfully tested their parachute recovery for an Electron rocket after launch and have plans to perform a full recovery attempt later in 2020. Just like the Falcon 9, the reusable nature of an Electron rocket will further reduce costs.
Lastly, and perhaps most importantly, the nature of small rockets better fits the requirements of CubeSat projects. Faster turnaround, smaller contracts, expedited launch schedules, better flexibility, and smaller potential loss in the case of catastrophic failure all helps to reinforce the growth of CubeSat development and proliferation.
With many more exciting milestones and advancements on the horizon, it’s certainly a promising time in the space industry. Furthermore, advancement of space exploration, travel, and infrastructure will better the human race through scientific discovery and societal progress.
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We intend on this portfolio being balanced between the Three Pillars of the Token Economy & Interchain:
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