Bitcoin price surge sets course for outer space

Tech firm plans to extend cryptocurrency access via satellite to boost reach and trade

NEW YORK • Space-like adjectives are often used to describe bitcoin's stratospheric price rise. Now there may be some truth in those analogies.

Blockstream plans to make the digital ledger underpinning the cryptocurrency accessible via satellite signals so people without Internet access, or in places where bandwidth is expensive, can trade and mine bitcoin.

The company also touts the service as an additional layer of reliability for bitcoin's blockchain data in the event of a network disruption.

Bitcoin has soared more than 50 per cent since the start of the month. A plan to move some data off the main network was activated last week in an effort to quicken trade execution and broaden access, helping to fuel the optimism.

The price climbed to a record US$4,449.90 (S$6,076.50) on Tuesday before retreating.

"With more users accessing the bitcoin blockchain with the free broadcast from Blockstream Satellite, we expect the global reach to drive more adoption and use cases for bitcoin, while strengthening the overall robustness of the network," Blockstream co-founder Adam Back wrote in an e-mailed statement.

Ground stations, called teleports, will uplink the public bitcoin blockchain data to the satellites in the network, which then broadcast the data to large areas across the globe, the company said.

The network currently consists of three satellites that cover Africa, Europe, South America and North America. By the end of the year, Blockstream said it plans to "reach almost every person on the planet".

Because of a cap on the amount of data processed by bitcoin's blockchain, transactions started to slow as its popularity boomed. The community was then divided between the SegWit2x solution backed by a group of developers and another supported by miners that sought a larger increase in the block size. The latter then became Bitcoin Cash.

Bitcoin Cash, whose price has retreated since peaking right after its birth, has neither disrupted its progenitor's operations nor undercut its appeal.

Goldman Sachs technical analyst Sheba Jafari said in a note to clients on Sunday that bitcoin could reach as high as US$4,827 before entering a correction, which could erase around 40 per cent of the cryptocurrency's gains. "This can last at least one third of the time it took to complete the preceding advance and retrace at least 38.2 per cent of the entire move," Ms Jafari said. "From current levels, that would measure out to US$2,221" prior to Monday's surge.

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A version of this article appeared in the print edition of The Straits Times on August 17, 2017, with the headline 'Bitcoin price surge sets course for outer space'. Print Edition | Subscribe