An Indian government official from Ministry of Railways has put forward a new paper titled ‘Extra-Terrestrial Applications of Blockchains and Cryptocurrencies’ that explores on how value-based transactions can be conducted in outer space.

Authored by Dr. Kartik Hegadekatti, the paper envisages a scenario where extra-terrestrial settlements use money to exchange value. The feasibility of paper money systems on future settlements outside earth is deliberated. It also analyses various potentials and advantages of blockchain in facilitating economic activity in extra-terrestrial settlements.

“When the first human colony starts to function on Mars, what might be the best possible medium of exchange that can be used? It can be cryptocurrency systems. Using paper money or plastic money on Mars or anywhere outside Earth is ruled out. That is because; carrying physical money into space is a costly process,” the paper stated.

The paper mentioned that it will be illogical to use paper or plastic money in space due to the physical issues and costs involved. The first Lunar and Martian colonies can use cryptocurrency for trade and as a medium of exchange.

In the case of Moon, a blockchain transaction can easily occur and Regulated and Sovereign Backed Cryptocurrency (RSBC) system’s can be used as they provide stability of value, unlike decentralized cryptocurrencies. Also, governments will have a major role in colonizing space as they will be bound to use RSBC.

“Mars is a different case. Unlike the Moon-Earth system, we cannot maintain a single Controlled BlockChain for Mars and Earth. What can be done is that a separate Martian BlockChain with its own cryptocurrency can be created which can be traded in an international cryptocurrency exchange,” the paper explained.

The powerful microprocessors embedded in objects flown to Mars, can do ‘Smart Mining’ and provide the basis for a money exchange system. Those machines that contain embedded chips will 'Smart Mine' cryptocurrencies which can be used for extra-terrestrial transactions. As a result, machines launched into outer space will automatically add value to the world economy.

“There can be a MarsCoin, on a Martian blockchain, LunarCoin, JupiterCoin, SaturnCoin, TitanCoin, and so on, on their respective controlled blockchains,” it added further. Blockchain can also be used for extra-terrestrial contracting, voting, taxation, banking, among others.