Is it possible to use bitcoin as interplanetary money/store of value?

Question

Let's say humans have finally made a successful colony on Mars, how useful would bitcoin be to transfer value between Earth and Mars?

And if it won't work with the current implementation, what would need to be changed in order for btc to be used interplanetary?

Assume there is no Mars cash or any monetary system, they just decided to use bitcoin for everything. It however has to be on the same blockchain that Earth is using.

Possible problems to consider:

• how would mining work? Lets say a miner on Mars and a miner on Earth both solve a block at the same time, because of ~8 minute delay between the two planets who would get the reward and how to deal with such a problem?

NOTE: I will be updating and modifying this questions to make it more concise and to the point.

Answer 1

Let's say humans have finally made a successful colony on Mars, how useful would bitcoin be to transfer value between Earth and Mars?

If you're talking about the Bitcoin blockchain in its current form, it will restrict mining to one of both planets.

Bitcoin's assumptions include a block propagation time between miners is negligible compared to the interblock time (10 minutes). We've already seen the effects of a few seconds block propagation time on Earth: miners being forced to build upon each other's work without validating, to avoid orphaning during that time. This incentive encourages centralization, hurts Bitcoin's security (especially for light clients), and makes mining (even) less permissionless to enter.

The distance between Earth and Mars can be up to 401 million km, when they're on opposite sides of the Sun. Following the laws of relativity, it is fundamentally impossible to communicate between them in less than 22 minutes in that case. A propagation time of 22 minutes would utterly destroy any ability to mine on both sides. As there is a delay of 22 minutes before Earth can mine on top of a block created by Mars, or the other way around, but not when a planet mines on top of a block created by itself, you would end up with an almost persistently forked chain between the two. The slower planer would eventually always switch over to that of the faster planet, making the faster planet win far more blocks than proportional to its hashrate. Effectively, the delay between the two planets turns mining into a race rather than a lottery.

And if it won't work with the current implementation, what would need to be changed in order for btc to be used interplanetary?

The above issue could probably be solved by using a chain with a ~1 week interblock time rather than 10 minutes, to compensate for the larger propagation time.

If we're fine with mining being controlled by one of both planets (effectively giving that planet the arbitrarily censor the other planet's transactions), it would probably work fine.

There are other issues though; another problem is partitioning. Bitcoin strongly relies on peers in the network to be able to communicate without ending up on their own islands of connectivity. There would need to be multiple independent communication links between the two planets to avoid a partition between Earth and Mars. If mining is knowingly on one side, the worst effect of a connectivity failure is just the lack of ability to see confirmations on the other side, though it may take hours (=a few roundtrips) to notice this.

Answer 2

Mars can use Lightning Network for intra-Mars transfers without a problem (although some security guarantees could weaken due to delay on opening/closing channel). I think routing LN-payments between Earth and Mars is possible as well (even for side-chain case I present below).

Transferring on-chain would be slower and they’d likely have to either

• rely on Earth’s full nodes in order to avoid partitioning (gossiping transactions between Earth and Mars mempools could be problematic due to delay). All mining would be on Earth then.

• Mars building their own side-chain with their own network and miners (the way RSK and others work) - all interactions with Earth’s chain would go through bridges (the way side-chains work now). This would also mean that they either:

  • would have to split block rewards (requires change in protocol to lower Earth’s bitcoin reward let’s say 50% while Mars side-chain would start rewarding the other 50%) in order to balance issuance between parallel chains.
  • or Mars would have to rely solely on fee mining (which could make on-chain transactions on Mars more expensive depending on when would that happen as reward is declining exponentially, it also depends on how often Martians would transact on-chain comparing to Earthlings)

Answer 3

TCP state machines have timeout issues when space propagation delays get to be too excessive. If OSes between computers communicating across space have tailored TCP state machine timeout periods Bitcoin could function. Otherwise, different transport protocols (besides TCP) will need to applied to interplanetary communication. If protocol state machines work, not much is preventing one from spending their money remotely by transmitting/broadcasting their network transaction.

Should also point out mining will need to be centralized to one planet because block propagation times will take too long. This means Earth will have its blockchain while Mars has its own. No thought yet to whether drive or sidechains will continue to work.

Answer 4

Really, just an internet connection (obviously a computer too) so you can connect to all the nodes and keep up to date with the blockchain.

Or if you use a wallet service then just an internet connection to get to any available wallet on the market.

But also in order to liquidate Bitcoin into mars-cash you would need services to convert BTC to mars-cash. Unless you wanted BTC to be the mars-cash.