tl;dr: Why Bitcoin may be the reserve currency of the future. Hint: it has to do with outer space.

Note: the following was written by my partner and co-Chief Investment Officer of Crypto Futura Fund. It is reproduced with his permission.

As human societal structures have evolved over thousands of years, so have our systems of technology development and transportation—both of which have affected our systems of money and exchanging value.

In the earliest days, we were localized, moving nomadically only where our feet or a small boat could take us—often throughout a region, but we were not yet world travelers. During these times bartering was used to exchange value: “I’ll give you three coconuts for that wooden oar”.

Media of exchange were also used regionally—objects like cowrie shells or Yap stones. These items did not have value in and of themselves, but society accepted them as valuable because they took effort to find or carve, and everyone in that region accepted them as a means of payment or exchange. However, as boats got bigger and beasts were domesticated, we began to travel further and moving between regions became more common.

Gold and silver have been used as currency for thousands of years.

There is something universally accepted about the scarcity and value of gold and silver—about the fact that it is difficult to find these elements in the earth and it takes great effort and expense to extract and refine these shiny metals. As caravans with horses, camels and carts traded over great distances and ships explored far-off lands, it became clear that gold and silver were widely accepted by societies even at the furthest distance from each other. This universal acceptance led to gold and silver being the bedrock of future economic systems—with gold being held as reserves by Central Banks even in our modern world.

The Industrialization of the 1800s, with its fast-paced trains, steam ships, and the invention of the automobile caused a shift in society towards a medium of exchange that fit its increasing speed: paper money.

Printing press technology had been advanced over several hundred years, and it was ready for the big time. Lighter than gold or silver, and widely accepted because of (mostly) stable governments with coffers growing with newfound industrial wealth, paper soon became the standard. There was still a mix of gold and silver coins with the paper, and the paper could often be exchanged for silver or gold, but paper became the dominant medium of exchange for this faster-paced world.

Post-World War II, humanity took to the skies with a whole new form of travel: airplanes.

Even though airplanes had been around for decades, it wasn’t until after WWII that they were made commercially available on a wide scale. We could now criss-cross the globe in a matter of hours. Currency exchanges became a fixture in airports as people needed a way to change their country’s paper money into the local currency. Another solution became popular at the time: credit cards. There was no longer a need to carry around wads of paper as people flew around the world and crossed border after border—just one sleek plastic card. This quickly became universally accepted as a superior solution to paper cash.

The Internet revolution of the 1990s up to the current day, created whole new ways to speed the exchange of data, and also make purchases.

Most of us were wary of placing our precious credit card information on a random website, and it took a while for Internet commerce to take off—but now it has become a huge part of our economy. As the pace of information and products to be exchanged increased at a mesmerizing pace, a new mode of exchange was again needed. Venmo, Apple Pay, and PayPal have emerged in the US, but these pale in comparison to systems such as AliPay and WeChat, which account for the vast majority of consumer transactions in China. Mobile payment systems allow for a quick scan and payment is complete. Insurance, medical bills, utilities—all of these can be managed through an AliPay or WeChat account. You can hardly make a payment in China today without one of these payment systems.

Now, human society is readying to leave the planet on a whole new generation of spacecraft.

We are going to settle on the moon, Mars, and beyond. We are developing the technology to get off planet, and at the same time we are developing the currency to be used in this new human endeavor: crypto. This is no joke, and it is not just a novelty. Blockstream has leased 6 geostationary satellites and has two of their own allowing for Bitcoin nodes in space. Venezuela is using this technology to host nodes in space. BitMex is testing the ability to use Blockstream to allow users to run a node without an Internet connection—as long as they have access to a satellite. SpaceChain has hardware aboard the International Space Station (ISS), and has secured Bitcoin transfers via the ISS. Qtum was the first, however, with a blockchain node launched into space via Chinese satellite in early 2018. We are only two years into this new revolution in space money, but it is clear that crypto has many advantages:

• The blockchain keeps track of transactions from anywhere
• Lightning networks could keep track of off-planet transactions (you know, on the moon, Mars, Titan and such…) and then write back to the blockchain on occasion
• No country of control is necessary, it operates in a necessarily decentralized way
• A completely digital currency is as lightweight as space itself, with nodes easily hosted on satellites and spacecraft
• There is a different sense of time in space, and crypto is always on

The crazy thing about the speed at which we have moved through the different types of money, is that most of them (with the exception of Yap stones and cowrie shells) still exist today as forms of exchange: gold (for Central Banks, at least), paper money, credit cards, mobile payment systems, and crypto. Paper money seems to be on its way out—hastened, no doubt, by the pandemic. Credit cards have been updated from raised numbers and carbon sheets, to magnetic swipes, to chips, to RFID microchips. Mobile payment systems are still on the upswing of adoption and crypto is in its nascent stages.

It seems strange to think that crypto will be essential to getting off planet as a society, but it is underway: Russia, India, China, Japan, the EU, and the US all have plans for moonbase construction within about a decade.

To the moon!