The world is on the brink of a new space race, not fuelled by the Cold War between superpowers, but by the efforts of several competing private companies. The question is whether there is a place in this race for small, independent companies and startups without multi-million-dollar budgets and, if so, what options they might have.
The advent of the internet as a medium for instant sharing and spreading of information in real-time, as well as a way of collaborating on specific tasks without geographical or political restrictions, gives all of humanity the unique opportunity to participate in future discoveries.
Combining the potential of the blockchain with current scientific resources could inspire more people to participate in the joint effort of conquering space. By implementing the principles of decentralisation, society can exploit the dynamics of crypto-economics and private funding within emerging scientific and commercial projects looking to accelerate the exploration of space.
Three Main Challenges
The international community, of nations as well as companies, needs to target three objectives relating to space and space exploration:
- Exploiting space to create new business opportunities and markets;
- Improving global access to the space industry and helping smaller companies to be more competitive;
- Accelerating the process of exploration and use of cosmos.
Be it national or private companies, they all struggle with issues that dampen their potential. While manifestations of this can be either limited funding or a clash of interests, the underlying problems are the lack of qualified staff and the enormous operating costs involved.
Nowadays, the space industry has to confront two main issues, which prevent the development of this industry as a whole:
- Security issues, mostly present among countries
- Competing interests between private companies and national agencies
The first problem is to be solved through diplomatic relations and cooperation among national leaders. The second one is being addressed by the development of open-source technologies in the commercial sector and in scientific communities.
The whole industry revolves around the biggest players, and it is very hard for anybody else to break through, mostly because of the enormous costs of any projects. It is almost impossible to create a software for space applications in the low-cost, or “start-up” way. Today, most space projects are managed and/or financed by governments. These projects are more often than not influenced by national interests and new research or technological innovations are limited by low budgets.
New Ways of Financing Emerging Space Projects
Emerging companies worked (and still work) using the traditional venture capital model. A company’s founders are its majority shareholders, while the rest of the team is motivated by being given some shares too. Thanks to the VC model, creativity and innovative projects could emerge, but that alone does not guarantee success.
On the other hand, long-term projects which require larger funding for R&D, like space exploration, are not best-suited for the VC model. Many enterprises looked at by VC firms would be considered as not viable, as they require far more time and capital to be successful and to meet market expectations.
Raising funds through issuing tokens is an innovative way of financing new or ongoing projects. With enough funding, a project can gather the best talent, improve the overall efficiency, and flexibility leading to a laser focus on long-term R&D. This is necessary for the development of space technologies, where initial setbacks are expected and a large portion of funds must be allocated to R&D.
Traditional VCs are not willing to accept such risks. That is why new models of crypto-economic funding have to be considered. The big advantage of the crypto-economic funding model is the possibility of utilising smart contracts as a way of releasing and distributing funds. Implementing smart contracts will allow improvement in the management of funds and will also increase investor trust, as utilising this technology also allows one to precisely set vesting and release of funds based on the set roadmap and planning.
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