A loose group of developers are testing out the idea that the combination of bitcoin and orbital communication might provide a means for stopping governments or other powerful entities from suppressing news they don’t like.
Censorship is a worldwide problem, with one of the more recent examples include a new law strengthening the Russian government’s control over the internet, which pundits worry will be used to censor information that reflects poorly on it. As such, technologists have long tried to chip away at this problem with technology that ranges from privacy browser Tor to the walkie-talkie messaging app Zello, the latter of which Venezuelans used to read information that’s uncontrolled by the government and to organize protests a few years back.
A more recent effort is being waged by a small but global group of developers who are sending messages using satellites paired with software from the bitcoin technology startup Blockstream, initially deployed with the grand goal of allowing people worldwide access to bitcoin even if they didn’t have internet.
Passionate hobbyists around the world have re-purposed this technology to send out news that — theoretically — can’t be censored by corporations or governments.
Bitcoin plays a crucial role in this scenario because the messages themselves need to be paid for. That’s because users can’t send as many messages as they want, given the space limitations for such content. And using bitcoin, which by design is censorship-resistant, makes more sense than a paying with other digital payment systems, which could hypothetically be shut down by the same parties that are trying to censor the messages.
One pseudonymous bitcoiner going by the moniker SafetyFirst has broadcasted dozens bundles of news, a package he dubs “BlockSat.” They’re calling it a test for “proof of news,” a play on the phrase “proof of work.”
The idea is that once the messages are aired, the messages are distributed across the globe. Anyone, as long as they have a satellite receiver that costs approximately $100, can receive them.
As SafetyFirst argued in a tweet:
“The future of open access to information is happening right in-front of our eyes.”
In a message to CoinDesk, he elaborated on the idea: “It seemed like info you can receive without any third party interference would be of value to parts of the world where information controls (by the government or anyone) try to stifle […] access to news, information, or anything in between.”
Why space is censorship-resistant
Using satellites to stop censorship is actually far from a new idea.
For example, in 2012, hacker activist Nick Farr put out a call to action that led to the creation of the Hackerspace Global Grid (HGG), an effort to fuel research of uncensorable communications via satellite. Hobbyists then deployed miniature satellites, called CubeSats, into space.
“Since the founding of the Chaos Computer Club, we stand for the human right of free (at least) worldwide communication. [Glass] fiber located on federal territories could become a problem for unhampered communication. People in charge could shut them down to produce a congestion. The task of the Hackerscene is to establish communication ways, that do not stop at borders. The creation of earth near networks, where governments cannot interact with, is one big role for free communication,” the original call to action explained.
Let’s go back to how they work. As CoinDesk explained in an earlier article about such transmissions, users are mostly using the simple website spacebit.live to send the messages by satellite with just a small fee paid in BTC.
“The news is immutable in the fact that anyone worldwide with a basic satellite dish, some software, and a little knowledge can receive it. No controls on internet, cellular data, or state control can stifle it. There are numerous oppressive countries that censor everything from whole sites to certain keywords. In a world of companies kneeling to these demands, it seems only right to provide people with all the available information,” SafetyFirst contends.
That said, since Blockstream is in control of the satellites, there’s a degree to which they and the companies it’s leasing satellites from are in control. But SafetyFirst argues that, at the very least, the satellites offers a worldwide alternative.
Countries often shutdown the internet in times of turmoil (in fact, the dictator of Chad has shut down the internet for over a year). When this happens, people still have satellites as an option for retrieving information these entities might be trying to hide.
To this end, SafetyFirst notes that he’s been trying to help users send their messages anonymously. “This is the […] reason I created a hidden service (darkweb) .onion link so they can broadcast over the satellites without fear,” SafetyFirst explains. This website can only be accessed on special privacy-minded browsers, such as Tor or Brave.
Where bitcoin fits in
Again, bitcoin factors into this arrangement because the messages need to be paid for, explains Grubles, community manager for Blockstream.
The number of messages that can be sent are limited by available bandwidth, according to Grubles.
The fees have generally been very low thus far. It costs just a few cents to send a message to space right now, since the system is not hitting this limit. But in the event that more people start trying to broadcast messages at the same time, there’s a bidding feature. If there are too many messages trying to be sent at once – the one that pays the most bitcoin wins.
“The bandwidth is limited so we let users choose to expedite their data in the event there is more demand than available bandwidth,” Grubles said.
And when paying to send controversial or politically charged message, bitcoin makes more sense than, say, PayPal, which generally has an identity tightly linked to it and could face sanction or funds freeze.
Philosophically, the leaderless online money seems almost like a natural fit as it’s a currency that is worldwide, not being limited to a particular country, and unable to be censored by any particular company. If you need a currency to pay for the messages, one can see why it’s a natural link.
Farr noted this, arguing: “I think tying bitcoin to it is one of the best use cases for the original vision of bitcoin: A way to unify a global effort.”
It’s also important that the satellite system runs on a particular new type of bitcoin: lightning.
Lightning allows users to send “micropayments,” small payments, which current financial apps just can’t handle, because processing fees are too high.
“Lightning is great for this since you can pay and quickly broadcast a message if needed, and also pay very small amounts of bitcoin if your data, or message, is small,” Grubles added.
Too crazy an idea?
That said, just because the pairing bitcoin and satellites to send out messages that are harder to censor is possible doesn’t mean people use it.
Farr was quick to note this. While he called a decentralized network of satellites — like the one he helped to start at HGG — is the “holy grail of censorship resistance,” he also stressed that: “[L]ike the search for the holy grail, it’s an incredibly complex set of problems to solve that really elude even very well coordinated hobbyist efforts.”
While it’s “technically viable,” he said, there are other problems.
“I think we’re at the point where the obstacle is coordination. I see this piece as a part of the way to get there,” he told CoinDesk, noting that people have been working on this type of satellite technology for “a decade now.”
That said, he noted that the open-source operating system Linux started off feeling like a very unrealistic effort as well.
“Before Linux proved it could be done, we never would have thought a global worldwide effort of folks could come together and create an operating system, for free. Now that operating system runs the world. Once all of those disparate groups get coordinated, once there are so many cube sats in orbit, interoperability standards and pieces liking together existing old tech (like Linux drivers for old devices), we’re basically there. Once launch capabilities are no more difficult to put together than a data center, you’ll see this plan come into place,” Farr added.
Now Linux is by far the most popular operating system in the world. That kind of success that, perhaps, is why bitcoiners are still so optimistic about the technology.
“I really believe all in all the satellites can be a new age of information sharing. Just look at this guy posting about his worries for Hungary today,” SafetyFirst said, pointing to an article broadcast over Blockstream Satellite where a blogger outlined some political concerns in the country.
“I have no idea if his concerns are valid, but I do think it’s a great thing he has an outlet to post where it can be seen and cataloged.”
LibertyX Surpasses 1,000 Bitcoin ATMs Across the US
LibertyX, the company that launched the first U.S. bitcoin ATM, will expand into 90 retail locations in Arizona and Nevada, according to a statement made Wednesday.
With this move LibertyX now operates more than 1,000 so-called bitcoin ATMs across the country. The latest additions are set up in AMPM, ARCO and Chevron gas stations, as well as select Family Dollar stores.
A partnership with Desert ATM, a non-bank ATM service provider, will enable street-level access bitcoin through user’s debit cards. Chris Yim, CEO of LibertyX, said the convenience and simplicity of bitcoin ATMs removes some of the hurdles to onboarding consumers to cryptocurrencies.
Related: Bitcoin Bounce Capped by $10K Price Resistance
This is not the first milestone the company has passed. In 2014, the company launched the first crypto ATM in America in Boston’s South Station. In 2016, it hired the first bitcoin cashier. In 2019, it became the first to enable debit card transactions on traditional, non-bank ATMs, without a hardware upgrade.
“It was a natural evolution of what we started almost 5 years ago,” said Yim, speaking about the most recent advancement. “Our goal is to make bitcoin available on every block in America.”
While LibertyX offered in-person cashier services in the southwest before, this move is the first time the company is integrating with Genmega machines in Arizona and Nevada.
Genmega operates “approximately half” of the non-bank retail ATMs that would be compatible with the crypto-transaction enabling software upgrade LibertyX designed. “There are over 100,000 non-bank ATMs in the US and we hope consumers can buy LibertyX bitcoin from all of them,” Yim said.
Related: Sexual Misconduct Allegations Emerge Against Bitcoin Coder Peter Todd
Transaction limits are set at $3,000 worth of bitcoin per day, for customers that pass the KYC requirements.
In the past, Desert ATM had attempted to operate their own crypto machines, but found LibertyX had the experience to roll out the feature effectively, according to the company announcement.
“We’re thrilled with the demand and enthusiasm we’ve seen from ATM operators who have been dying for a scalable, compliant, and capital-efficient bitcoin solution,” said Yim, in a statement. “There are not many crypto companies still around from 2014 and we are proud not only to have survived, but thrived over the years. We have grown from that 1 ATM in Boston’s South Station in 2014 to thousands of retail locations nationwide today.
In June, bitcoin ATM competitor DigitalMint expanded to 20 locations in Arizona and Nevada.
Bitcoin ATM photo via CoinDesk archives
Short of Target: Bitcoin’s $1K Rally Still Leaves Bear Bias Intact
- Bitcoin’s short-term outlook will remain bearish as long as prices remain below $11,080 resistance. A break above that level would invalidate bearish lower-highs setup.
- The bulls may have a tough time forcing a break above $11,080 amid news of BitMEX exchange facing a regulatory probe and talks of harsher crypto regulation.
- Prices could drop below $10,000 in the next 24 hours with daily chart indicators continuing to report bearish bias.
- A weekly close (Sunday, UTC) above $12,000 is needed to revive the bullish view.
Bitcoin (BTC) has rallied sharply in the last 24 hours, but the outlook remains bearish with prices holding below key resistance around $11,080.
The premier cryptocurrency jumped from $9,200 to $10,400 in just 40 minutes during the U.S. session yesterday, contradicting the case for a drop below $9,097 put forward by multiple rejections at $10,000 in the Asian trading hours.
Price rose further to $10,800 at 23:45 UTC, but closed at $10,648, leaving the crucial resistances of $10,759 (monthly opening price) and $10,850 (daily chart resistance) intact, as tweeted by popular analyst Josh Rager.
Rager wants to see BTC climb $10,850 before calling bullish revival. While that argument has merit, a much stronger confirmation of the bullish breakout would be a high volume move above $11,080.
That would invalidate the bearish lower highs pattern created during the sell-off from $13,200 to $9,049, as seen in the chart below.
Bearish lower highs
As of writing, BTC is changing hands at $10,330 on Bitstamp, having clocked highs above $10,770 at 08:00 UTC.
The cryptocurrency has come under pressure in the last hour or so amid news that the U.S. Commodity Futures Trading Commission (CFTC) is probing BitMEX, which offers trading of cryptocurrencies with up to 100-times leverage and products such as futures and swaps, over whether it allowed Americans to use its platform.
The latest CFTC probe could heighten regulation fears that have gripped markets over the last few days, making it difficult for BTC bulls to force a break above $11,070.
Technical charts are also calling a break below $10,000.
4-hour and daily charts
BTC is feeling the pull of gravity, having faced multiple rejections at the 50-candle MA on the 4-hour chart (above left) in the last 18 hours.
With bitcoin’s fall back to $10,300, the bearish crossover of the 50- and 200-candle MAs has gained credence.
Further, the relative strength index (RSI) on the daily chart continues to report bearish conditions with a below-50 print.
The Chaikin money flow index, which takes into account both prices and trading volumes, fell to 0.07 yesterday from 0.08, even though prices rose above $10,000. That divergence (marked by arrow) indicates the buying pressure weakened with the price rise and puts a question mark on the sustainability of the gains seen in the last 24 hours.
The 5- and 10-candle MAs have produced a bearish crossover and prices faced rejection at the descending 5-candle MA earlier today.
Further, the moving average convergence divergence (MACD) has turned bearish for the first time since December 2018, as discussed earlier this week.
All-in-all, BTC risks falling below $10,000 in the next 24 hours. On the downside, strong support is located at $9,097 (May 30 high). A violation there would expose the 100-day MA lined up near $8,100.
On the higher side, a high-volume break above $11,080 would invalidate the bearish setup.
That said, a weekly close (Sunday, UTC) above $12,000 is needed to confirm bull revival due to the fact that BTC has failed to close above that psychological level for three weeks in a row – a sign of buyer exhaustion noted earlier this week.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
What the CFTC investigating BitMEX could mean for bitcoin and crypto market
The Commodities and Futures Trading Commission (CFTC) has started an investigation into BitMEX, the largest margin trading platform in the crypto market, according to a Bloomberg report.
BitMEX, along with other major margin trading platforms, have not allowed U.S. customers to trade derivatives on the platform to avoid scrutiny from U.S. regulators.
The unexpected move of the CFTC comes after the remarks of U.S. Treasury Secretary Steve Mnuchin and his warning against increased efforts to tighten policies around the crypto sector.
Going after the biggest fish in the pond
Last month, BitMEX achieved $16 billion in daily volume across its derivatives products including the widely utilized bitcoin contract when the price of bitcoin peaked at $14,000.
Primarily due to the popularity of its bitcoin contracts, BitMEX has secured its dominance over the crypto market throughout the past several years.
However, the CFTC is said to be exploring whether BitMEX has facilitated trades for U.S. customers over the years and whether U.S. customers have been able to bypass restrictions set by the exchange by using virtual private networks or VPN.
A BitMEX spokeswoman told Bloomberg that the company cannot comment on investigations by government agencies. The spokeswoman said:
“HDR Global Trading Limited, owner of BitMEX, as a matter of company policy, does not comment on any media reports about inquiries or investigations by government agencies or regulators and we have no comment on this report.”
Why is CFTC going after the biggest bitcoin margin trading platform?
Earlier this week, during an official White House briefing, Treasury Secretary Steve Mnuchin stated that with the establishment of the Financial Stability Oversight Council’s Working Group on Digital Assets, various financial agencies including the Securities and Exchange Commission (SEC), CFTC, and FinCEN will vamp up efforts to tighten their oversight on the market.
Secretary Mnuchin said at the time:
“The United States has been at the forefront of regulating entities that provide cryptocurrency. We will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities. Treasury has been very clear to Facebook, to bitcoin users and other providers of digital financial services that they must implement the same anti-money laundering and countering financing of terrorism, known AMLCFT safeguards as traditional financial institutions.”
Secretary Mnuchin added that crypto money transmitters will be subject to the same standards and regulations as every other U.S. bank, indicating that FinCEN is likely to enforce existing regulations on crypto-related entities at full capacity.
The CFTC’s investigation into BitMEX, the decision of Binance to replace crypto-to-crypto trading in the U.S. with a fully regulated exchange called Binance US, and the geopolitical ban on certain cryptocurrencies by Poloniex and Bittrex indicate that companies are increasingly expecting stricter oversight in the near term.
In the short term, the BitMEX investigation could pose a negative effect on the crypto market especially due to the timing, which comes immediately after the release of the remarks of Treasury Secretary Mnuchin.