As the Greek government is paid to borrow money, eight years after being charged credit card rates…
As the Federal Reserve starts printing $60 billion a month, but refuses to call it quantitative easing…
And while the Dutch central bank publishes an article describing the means by which gold could be used to restart the economy if it collapses…
An anonymous individual broadcasts a message to the world using a radical new technology that’s been mounted on a satellite.
No mobile phone or internet connection was required to receive it. Provided you had a rudimentary satellite dish and a very basic computer, you could read the four words of text they wanted the world to know.
Their message was blunt. Concise. To the point.
(Clears throat):
Brosnan was best bond.
Two hours later, another individual used the same technology to beam a counter-broadcast from the same satellite. Anybody with a satellite dish pointed at the right angle had a seat in this global forum.
There is no best Bond because superlative requires three or more. There is only Sean Connery.
We live in strange times.
Let me show you what was going on, which to my eyes is nothing short of revolutionary.
Arguing in the upper atmosphere
A couple of years ago, a project called Blockstream decided to put a bitcoin node on a constellation of satellites, which would broadcast the bitcoin blockchain from orbit.
A key weakness of bitcoin is its reliance on the internet in order to function, as authoritarian regimes can simply shutdown internet access to prevent it from being used. The constellation bypasses this, as users with a satellite dish can receive the blockchain data from space to make bitcoin transactions offline.
(These offline transactions are not made by making a broadcast back to the satellite. Instead, they can be made using phone signal via text message, using radio signals, or worst case scenario, by “sneakernet” – carrying around a flash drive, or a printed-out barcode with the transaction data on it.)
In this way, it’s possible for anyone with access to a satellite dish to access the bitcoin network and transact value with anyone on Earth without intermediation. Pretty disruptive tech, when you think about it, as there isn’t much internet infrastructure in the poorer parts of the world, and yet it’s those poorer areas of the world with currencies less reliable than bitcoin.
But it really goes a lot deeper than that.
Bitcoin, as those who love to bash it like to remind everyone, is not physical.
At its core, bitcoin is information. Information that is held on a public ledger for everyone to see, and which is nigh-on impossible to remove once it’s been written down.
You may well already know how the first block on the bitcoin blockchain, the “genesis block”, contained newspaper headlines regarding the bank bailouts following the credit crisis within its coding. This was a deliberate jab at the legacy financial system, but it also revealed how messages could be woven into this public ledger, and are next to impossible to be removed.
Without getting too complex, the Blockstream satellites not only broadcast the blockchain – they also run what’s called the Lightning Network. Lightning is a network built on top of the blockchain, (what’s called a sidechain) which is created to allow bitcoin users to make lightning-fast, transactions with other users they already trust.
Lightning allows for “microtransactions” between users. These are utterly miniscule transactions of value – we’re talking thousands of a penny’s worth of bitcoin – across the network.
And it’s here that bitcoin’s status as an asset/currency/store of value etc and information start to blur.
That argument about the best James Bond, broadcast from the Blockstream constellation to the whole world, was caused by two users of the Lightning Network. They’d written their opinions on the best Bond into tiny transactions of bitcoin which they sent across the network, not for the purposes of sending money to somebody else, or to pay for something, but purely so their thoughts on the matter would be broadcast via satellite to the world. They’d spent next to nothing on doing it.
It was as if they’d inscribed their opinions on Bond on to pennies and magicked them into the wallet of everyone who uses pounds.
A public forum with the power of the blockchain behind it, where you can post any information. Nobody can censor it, and anyone with internet or a satellite dish can access it… now that’s pretty disruptive.
At the moment, it’s pretty tricky accessing and using Blockstream’s services, especially when it comes to making bitcoin transactions offline, using just a satellite dish. But by “pretty tricky”, I mean that it’s pretty similar to how tricky it was to use bitcoin back several years ago, when bitcoin itself was massively
Back when I was at school, a buddy of mine who had discovered bitcoin around the same time I did, knew how bitcoin mining worked and was considering doing it himself.
This was about eight years ago, and back then you could mine vast quantities of BTC at home just with a desktop computer.
He was even better positioned to do so, as he’d assembled his PC himself purely with higher processing power in mind, so that he could play video games at their highest graphics settings and at a high framerate.
But he didn’t end up getting into mining, because to get involved required a lot of learning on your own. There were barely any tutorials, and the user interface was dense and fiddly, so he ended up not bothering with it.
In doing so, he missed out on becoming a multimillionaire.
Using bitcoin to post information, and not just transfer capital, feels to me at a similar level of development as mining was back then. I reckon there’s significant value to be earned in figuring out exactly what’s going on.
I’ll be back tomorrow with more on this. Don’t go away!
All the best,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates