With the cryptocurrency bulls kneeling to the market matadors last week, there is a sobering opportunity to yet again examine the fundamentals driving this expanding fintech industry. From the technological backbone of distributed ledgers to the economics of Bitcoin (BTC), crypto is a catalyst for truly democratized autonomous, governance, and data management systems in our emerging interstellar economy.
Many cryptocurrencies are designated as an asset by the Securities Exchange Commission (SEC) and utilized for settlements in corresponding industries. Space payload launches are currently financed with fiat, loans, or standardized fintech instruments. Typically, these can involve three or more third parties with layers of trust dictated by extraneous entities, cumulative fees, and extended delays just to facilitate a single payment. With expenditures of $10 million to $500 million per launch, there’s little room for error. Traditional cross-border transactions are where fees, extended delays, and legacy contract implications can become extremely costly. Additionally, chargebacks, holdbacks, and similar headaches can further constrain a space startup's resources and schedules unpredictably..
The advantages to the payment industry alone are game-changing. An incentivized security-centric network, adherence to open source principles and equitable governance eviscerates the hindering confines of legacy monetary frameworks. The benefits of using crypto over fiat are proven year after year with disintermediation, fraud-resistance (double-spending), immutability, and asset sovereignty as the primary value propositions.
While every bull market contains a narrative concerning 'high transaction fees', this has minimal applicability to multi-million dollar industries like aerospace. Since fees are calculated per transaction, they are negligible when moving large amounts of money compared to bank-to-bank transfers that can charge from 0.5 to 5%. Transactions occur within hours instead of days with an unprecedented deliverance. Extensive incubation of interoperability, sovereignty, and privacy features are drawing the interest of key players in leading government administrations and institutions making it more likely that crypto will continue to see adoption.
Currently, the benefits of financing space startup activities with crypto outweigh those of the legacy financial paradigm. The Peer-to-Peer (P2P) architecture is ideal for mitigating multiple intermediary fees and international transaction complications. Transacting around the world with a single fee is extraordinary. 24/7 access to funds, the absence of lengthy paperwork, and no spending limits can also entice companies to make the switch. Regulatory uncertainty surrounds both the legacy and crypto financial ecosystems. Surprisingly, blockchain developers have an excellent track record of staying several steps ahead of evolving domestic and international policies.
In our previous blog, The Most Frustrating Challenges for Entrepreneurs, we touched on the long-standing rift between commercial customers and launch service providers. Interstellar pioneers with distributed financial instruments create a formidable adversary capable of penetrating any monopolistic stronghold. Lunargistics is empowering space and crypto entrepreneurs with both traditional and crypto payment options through our platform. It includes a marketplace and crowdfunding opportunities. Building the new space economy requires new money with the potential to work across the cosmos.