Why we should issue a Mars cryptocurrency now
“The future doesn’t belong to the faint-hearted. It belongs to the brave.” (Ronald Reagan at the Challenger memorial service)
Setting up a Mars colony will be humanity’s biggest endeavor, in all aspects, including the financial one. If we truly want to become an interplanetary species, our goal has to be to set up an ultimately self-sufficient society, not a mere extension of Earth that remains dependent on the mother planet, like e.g. an Antarctic base on Earth that is dependent on constant support. In fact, I will stop using the word “colony” right here and use “society” going forward, in order to drive this point home.
In order to achieve this goal, the Mars society will need a number of things, including a permanently settled population, a moral code, access to basic resources, a legal framework, institutions overseeing that framework, and a functioning economy. Obviously, these are all interrelated — e.g. an economy will not thrive without the security of the rule of law guaranteed by the underlying legal framework and institutional oversight, and a thriving economy is necessary to attract and retain citizens. Fortunately, Mars seems to have all the necessary minimum indigenous resources like e.g. nitrogen, carbon, iron, etc. I am, optimistically, also not too worried about the moral code, as frontier conditions (and Mars is a ‘harsh mistress’ if there ever was one — night temperatures of -130F, anyone?) historically have often brought out the best of humanity (except the killing the indigenous populations part — which fortunately will not be an issue on Mars, for all we know at least). With regard to the other factors, the history of societies on Earth gives us some pointers, largely summarized in Daron Acemoglu’s and James Robinson’s excellent book ‘Why nations fail’ — e.g. that institutions cannot be set up to extract a society’s wealth for the benefit of a few (think the exploitation of the Belters in ‘The Expanse’, the Mars regime in the original ‘Total Recall’, or, of course, terrestrial examples like the Spanish Encomienda in Latin America). While the ingredients for a successful society may be relatively clear, the overall recipe is less so — the missing part being the process, i.e. how to mix the ingredients and in what sequence.
Terrestrial colonizations were, in a way, easy in that the societal parameters of the colonizer (e.g. legal system, institutions, culture) were usually just transplanted to the colony, even if with adjustments. Also, the colonizer, at least initially, usually paid for everything, as e.g. the U.S. did when kick-starting development in Alaska. On Mars, at least as it looks now, the initial settling is likely to be done by a private company — a private company which is, of course, based in a nation state on Earth, but this does not need to impose any binding constraints (but we will know soon — if the nation state e.g. mandates that the first major transfers of settlers to Mars include military personnel, we will have a fairly clear sign; also, one has to consider the Outer Space Treaty, but this is outside the scope of this article). The absence of a colonizer means no existing societal structures will be automatically transplanted — this should be seen as an opportunity in that we can start from a clean slate with regard to forming the society, mixing the above ingredients in the right way. We will not be obligated to bring any bad habits from Earth if we are prudent enough to avoid it. It also means no colonizer with deep financial pockets and we will return to this point below, it being the main focus of this article.
These are not simple processes and it now looks as though, if things are going well, we might arrive on Mars in the mid to late 2020s. I advocate therefore that a process of societal preparation should commence now, while still on Earth. As I think the project of the Mars society should belong to all of humanity (not merely to one or a set of nation states or other powerful groups), this process should be set up and happen in a decentralized way.
There are hopefully many fruitful discussions that can and will be had on the various aspects of Mars society formation, e.g. what its constitution should look like, but I will leave most of these outside this paper and focus on one tangible action that I think we can already take now: establish the Mars monetary base.
As we said above, the society will need a thriving economy and money lubricates economies — this will not be different off-Earth (even in the fairly socialist Star Trek, the very capitalist Ferengi deal in Latinum — interestingly, apparently a precious commodity rather than Federation central bank issued fiat money, go figure).
However, the Mars money will not only ultimately be a local means of exchange (and hopefully a trusted store of value). Issuing it right now could provide the necessary funds to pay for minimum structures to kick-start the society. That is right: I am talking about a Mars ICO.
A Mars cryptocurrency, issued now, I believe would have many advantages:
As mentioned, I believe it could provide substantial funds — in the billions (of U.S. Dollars) — in order to help pay for such things as setting up basic life support systems, habitats, food supply, power generation, transport hubs, communication systems, maybe a basic security apparatus, etc. — things that in terrestrial nation states would be paid for by taxes (think of the ICO proceeds as prepaid taxes). This also avoids having these sorts of facilities financed by terrestrial nation states or other organizations, which would be money that would certainly come with conditions and strings attached, and such that may not be in the best interests of Mars.
We would effectively set up one of the Mars institutions (the monetary system) already today and could shape it in our preferred way. My personal preference would be for a Milton Friedman style regular small increase of the monetary base. The decentralized nature would be in line with the above point about the idea of Mars being a property of humanity, rather than any limited group of people. I also suspect that quite a few potential Mars settlers will be of the philosophical type to whom a decentralized, trustless, censorship-proof currency appeals. Besides, money should definitely be in digital form on Mars — transporting bills or coins from Earth or printing/minting them on Mars seems like a waste of resources.
A more ambitious project that sets up an Ethereum-style decentralized ecosystem could enable the issuance of tokens within the Mars monetary ecosystem by entrepreneurs with specific business ideas for Mars, thereby seed funding those projects and helping to kick-start the Mars economy. Even just briefly brainstorming potential businesses on Mars, one can come up with myriad ideas — e.g., in no particular order, greenhouse manufacturing, solar panel manufacturing, metals mining on Mars (and the nearby asteroid belt), genetically modified Mars crops, etc. The availability of funding (and traditional funding sources, like VC money, for Mars businesses are for now likely to be very scarce…) could unleash human creativity and entrepreneurship. Within time, I suspect we will be talking about the “Martian Dream.”
Besides ‘just’ business projects by entrepreneurs, this kind of Ethereum-style ecosystem could also allow the setting up of decentralized autonomous organizations (DAOs), which, even if DAOs eventually do not successfully end up being part of the Mars governance, would kick-start the important discussion on the topic of governance.
For investors, the Mars currency could provide possibly substantial upside. The currency would appreciate as the shape, and the potential size (GDP), of a future Mars economy would become ever clearer, e.g. by virtue of the Mars entrepreneurs proposing businesses and raising funds via Mars tokens. If Mars ‘works out’, the GDP of its economy will be in the trillions, which in turn means that the value of its monetary base (assuming a ‘normal’ monetary velocity comparable to terrestrial economies) would also be in the trillions — even at appropriately very high discount rates, this could make Mars currency a good investment today.
The higher the Mars cryptocurrency (and ‘daughter tokens’) valuation and the more accepted and widespread it is, the bigger will be the clout and power of the Mars society, even before it formally exists. A power not to be used in a malicious way, but as a defense against any possible attack by malicious actors to hijack and pervert the noble idea that Mars represents.
Even purely from a terrestrial perspective, the Mars cryptocurrency may have benefits — it could become a major reserve currency and store of value, and one backed by a tangible future perspective rather than ‘merely’ by digital scarcity.
The specific mechanics of a Mars cryptocurrency (including, importantly, when and how to transfer part or all of the network from Earth to Mars) are beyond the scope of this paper and should be subject to a long and fruitful discussion anyway. I shall only make one point which is that, if the Mars cryptocurrency ends up using proof-of-work, it would be nice to find some computational problem that is actually useful, ideally useful for the Mars project itself.
So here is a call to arms:
Mars is not only about terra-forming, but, more importantly, about society-forming.
I believe some of the best of humanity, extraordinary individuals in very sense, will take up the challenge to go to Mars. By taking advantage of its natural blessings, such as indigenous resources and proximity to the asteroid belt, and through a lot of hard work, they have the opportunity to turn it into a very rich, thriving society. They deserve the best possible shot at making this work, for themselves, and also as the success of Mars will be good for Earth, not only as a ‘planetary hedge’, but also as a commercial trading partner, and, perhaps most importantly, as a reminder of what humanity can achieve and an inspiration to push on ever further — Mars will not be the end. Titan may be next.
A Mars cryptocurrency could substantially help in this process, it is something we can do now, and we should therefore set up a foundation to start the process for a Mars ICO now. We have to be bold with the ICO (we are literally about to ‘boldly go where no one has gone before’), including with the fundraising amount — it should be the largest ICO ever for a very long time. At this point, I have to give a shout-out to MarsCoin, an existing Mars-related cryptocurrency. Unfortunately, at the time of this writing, it has a market capitalization of just over US$50k — we have to shoot for something more like US$50 billion.
Most importantly, and to kick-off the decentralized decision-making process, start thinking about suggestions for a name of the Mars currency. And please let us use the very cool Mars coat of arms from The Expanse in some way.
“And that is why we must begin by taking on the challenge of Mars. For in doing so, we make the most forceful statement possible that we are living not at the end of history, but at the beginning of history; that we believe in freedom and not regimentation, in progress and not stasis, in love rather than hate, in life rather than death, and in hope rather than despair.”
(Robert Zubrin, Mars Direct: Space Exploration, the Red Planet, and the Human Future)