Boldly spend with PayPal Galactic

29 June 2013 by Steve Blum
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What fun would moon golf be without a friendly wager?

There’s more than a whiff of publicity stunt about it, but even so, the launch by PayPal and the SETI Institute of a project to create a payment system that can be used in outer space is a fascinating idea. The initial problem they want to address is creating a medium of exchange for the space tourism industry.

Elon Musk, one of PayPal’s founders, is also behind SpaceX, which makes real rockets that are already sending cargo into orbit and should soon be capable of transporting people too. The odd jaunt by multimillionaires aside, it’ll be years before there’s anything like passenger service to low earth orbit, but sub-orbital flights on Virgin Galactic are nearly a reality. Private sector economic activity won’t be far behind.

I can think of a couple of different approaches to the problem. The dull way is to use existing credit card systems, perhaps with a dedicated payment gateway for transactions made in LEO (or beyond) to sort out exchange rates and any other national banking issues that might arise. That scenario would be little different from using a credit card on a cruise ship in international waters. Like I said, dull.

The interesting way would be to create a completely new virtual currency for outer space, or adapt a terrestrial one, like Bitcoin. LEO doesn’t present any serious technical problems. Even linking with the Moon or L5 only introduces a couple of seconds of light speed latency. But developing something that could be used where ever mankind goes in the solar system would be a challenge. It takes more than 30 hours for a radio signal to go from one extreme edge of the solar system to another.

Buying something with Bitcoin, which relies on a large, highly encrypted log of transactions, is probably possible at that distance. Mining Bitcoins, which involves winning a computational race, wouldn’t be practical even from the minimum Mars distance of 4 light-minutes.

So we need another way. With Musk already in the space business and co-founder Peter Thiel developing both virtual currencies and sovereignty, PayPal has the pedigree to find it.