In 2017, Bitcoin experienced a rise of 1500% investment in the world trade economy. Independent of the traditional investment channels, Blockchain technology has enabled safe exchanges of cryptocurrency through secured distributed ledger and smart contracts.

The success of Bitcoin has attracted the attention of the aerospace industry. More specifically, Blockchain technology’s platform that enables the execution of crypto-currency has appealed to space agencies, such as the National Aeronautics and Space Administration (NASA) and the European Space Agency (ESA), as well as the private sector.

The aerospace industry requires enormous amounts of capital and research, which restricts the entry of small companies given that traditional Venture Capital channels are not apt to invest in an industry that is heavily government-regulated, -financed, and -managed. In the U.S., only a select few companies like SpaceX and Blue Origin have successfully entered this closed niche industry without government assistance.

It is with this backdrop that NASA and ESA are attempting to leverage Blockchain’s decentralized principles, such as distributed ledger and smart contracts, to further propel multi-sensor-based satellites and the aerospace industry’s supply chain ecosystem.

In April 2018, NASA granted a proposal to combine Blockchain and Artificial Intelligence (A.I.) technology to address technology gaps in the operation of constellations and swarm of multi-sensor satellite flight architectures. The combination of these two technologies will enable autonomous operation of multiple satellites to execute various mission objectives both for earth-based observations and deep space missions. Traditional ways that operators conduct a mission entails the carefully timed and coordinated management of satellites and ground base stations to complete a mission or task. A space-based A.I. blockchain network would enable operators to send a single command to the Blockchain network, and a constellation of satellites coupled with ground base stations would autonomously and efficiently execute the mission.

ESA, on the other hand, has a different approach where blockchain technology’s use will transform the aerospace’s supply chain industry. ESA’s goal is for Blockchain’s secure decentralized distributive ledger and smart contracts technology to provide a simpler and efficient medium for any potential existing and new aerospace company participant to provide their innovative ideas and products. ESA envisions that this simpler and efficient use of secured smart contracts will create a robust supply chain ecosystem where suppliers and manufacturers can interact with each other to achieve their respective purposes. ESA is seeking to leverage blockchain’s technology in a way that will increase visibility, renew liability, reduce inconsistency, increase payment processing accuracy, and eliminate compliance problems among current suppliers and manufacturers.

With NASA and ESA’s transformative visions of Blockchain technology both in space and the aerospace supply chain industry, the private sector is properly positioned to adopt and further improve on those ideas. For example, Blockstream and Nexus Earth are two companies that are planning to launch their space-based blockchain network to deliver the world’s first “open source satellite network” for cryptocurrency, data collection, computing, storage, and other functions. With the advent of the adoption of Blockchain technology in the space arena, new companies will be better positioned to introduce new ideas that they would have not otherwise been able to do in the current traditional channels.

While Blockchain technology introduces new innovations for the aerospace industry, the legal system will need to properly react to those changes. For example, NASA has numerous missions that have joint ventures with other countries; thus, the implementation of an autonomous constellation of satellite comprising U.S. and foreign countries’ satellite will pose some interesting challenges as far as data ownership. The decentralized aspect of blockchain will create issues of who really owns the right of the data on ledgers. The legal system and government agencies will need to quickly react to establish rules of the game both in a country and through the global systems.

With globalization and the interaction of both foreign governments and private companies, the application of Blockchain technology in the aerospace supply chain industry could also bring about complex legal issues around regulatory regimes and agreements to be carefully considered in ledger transactions. In a multiple jurisdiction decentralized environment, it may be difficult to identify the appropriate governing law to apply.

For private companies, the use of smart contracts is established outside traditional legal institutions. The legal system and government agencies will likely have to adapt or enforce some regulations to influence blockchain technology’s smart contracts to reflect current legal systems’ definition of a contract. Additionally, data privacy will be another issue that providers would need to grapple with outside the Bitcoin environment. Once data is stored in a blockchain platform, it cannot be altered. This will be particularly challenging for data containing personal information. Providers or customers will need to design protection measures for privacy needs, or risk facing a surge of litigation activity in the absence of data privacy designs.

A new way of using Blockchain technology could potentially further propel new use for earth and space-based networks. While humans find better ways to utilize blockchain technology, it does not come without both technological and legal challenges. The legal system would need to quickly adapt to the ever-changing technological landscape and how it affects human interactions.