ESA Business Applications and Space Solutions has granted funding to SpaceChain UK to develop and identify commercial use-cases for its satellite blockchain technology.

The financing comes as a part of the ESA’s Kick-start Activity programme.

This programme is intended to make it easier for entrepreneurs and start-ups to explore thematic areas with promising business potential and to develop new commercial services and applications based on space assets and data.

The successful projects can further be developed with additional funding from ESA.

SpaceChain co-founder and chief executive officer Zee Zheng said: “It is an honour to receive support from the European Space Agency.

“The fintech industry currently suffers from low levels of security in relation to the storage and transmission of digital currency, preventing it from achieving the same level of professionalism and trust as the traditional banking industry.”

The satellite blockchain technology is intended to make the transmission of digital currencies and smart contracts secure by using a distributed satellite network and multi-signature transactions.

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SpaceChain has built an open-source operating system. It also launched and flight-tested two blockchain nodes into space in the last 12 months.

The current blockchain transactions have several security risks when a user’s private signature key stands compromised.

Therefore, SpaceChain has developed a multi-signature satellite wallet that is not only quicker but also more secure than the conventional approach.

Rather than using one private key, the SpaceChain wallet uses a two of three signature scheme, wherein at least two signatures are needed to finish transactions, with the satellite serving as one of those signatures.

This ensures that the funds in the wallet stay safe even if there is a connectivity failure as two ground-based signatures can continue to finish the transaction.

SpaceChain co-founder and chief technology officer Jeff Garzik said: “Multisignature transactions have been proven to be highly robust security measures for financial systems and we are very excited to be partnering with ESA and expanding these security measures to the new space economy.”

Furthermore, SpaceChain intends to team up with Deimos Space UK, whose expertise in flight systems, ground segment systems, space situational awareness, and satellite navigation make them a suitable partner.