Just when we thought that 2020 couldn’t get any deeper into the Twighlight Zone, along came Elon Musk, The Winklevoss Twins and Dave Portnoy.
For those uninitiated into the truly bizzare world of space-rockets-meet-bitcoin-twins-meet-barstool-sports-meet-mining-asteroids-for-gold……allow us to offer you a truly unique perspective on modern-day human-kind.
This most recent development is already most entertaining, BEFORE a US Government agency (NASA) decides to start encouraging private enterprise to scoop up moon rocks, for which they will pay handsomely. More on that as we proceed.
To paint an introduction, we’ll start with the dynamic individuals who will help us craft a basis for the story as provided below.
Most know who Elon Musk is. He’s the enigmatic US Billionaire, responsible for Tesla, SolarCity, The Boring Company, PayPal and SpaceX, amongst others.
Further, many readers may recall the Winklevoss Twins. These two brothers, in short, claimed to have invented Facebook, and sued Mark Zuckerberg to prove it. They settled for $65 million, and went on to, amongst other things, become die-hard Bitcoin and Cryptocurrency fanatics. Their investing escapades have netted them an estimated net worth of $1.8billionUSD.
Dave Portnoy, has vaulted into the investment and trading limelight in recent months from relative obscurity.
Portnoy is the founder of the omnipresent, and highly valued Barstool Sports, which he single-handedly built from a small sports-book magazine into a media and marketing behemoth.
Penn National Gaming recently purchased a 36% stake, and valued the company at $450million USD.
Portnoy, lamenting the COVID-induced shut-down of his beloved sports-betting pastime, replaced his speculatory inclinations with day-trading, and proceeded to garner a massive following while generating eye-watering returns.
What does this have to do with mining moon rocks?
Plenty, and the floodgates are about to open, setting a new intergalactic battlefront for mining rights and the associated conflict that goes with the development of any new resource.
Here at Icarus, we are great supporters of sound money theories, and general logic. We like gold, common sense and a general interest in reasoned thinking and traditional investments. We also like a scientific basis upon which investments can be made, and returns thereafter generated.
Musk likes launching rockets into space and wants to mine asteroids and interplanetary objects. The Winklevoss Twins love Bitcoin and cryptocurrency, and Dave Portnoy somehow managed to amalgamate these odd bedfellows into one of the most peculiar stories of 2020.
According to CoinTelegraph, a news site for cryptocurency enthusiasts, “The Winklevoss Twins suggested that Bitcoin (BTC) is a better investment than gold because the metal’s supply will increase after Elon Musk starts mining asteroids.
In an interview with internet personality and Barstool Sports founder David Portnoy, the Winklevoss Twins claimed that Bitcoin is a better investment than gold because gold does not have a fixed supply:
“There’s billions of dollars of gold floating in asteroids around this planet, and Elon [Musk] is gonna get up there and start mining gold. […] That’s why gold is a problem, because the supply isn’t fixed like Bitcoin.”
Portnoy reasonably asked, “Is that, like, a real statement?” to which the founders of Gemini cryptocurrency exchange replied, “yeah.”
To further reiterate the idea that gold is inferior to Bitcoin, one of the twins said that “gold is for boomers” adding that Bitcoin is “the only fixed asset in the galaxy.” We suggest that readers familiarize themselves with the key players in the embedded video below.
2020 has generated some ripping yarns, but this one was up there with the kookiest!
Icarus vehemently disagrees with the logic that cryptocurrency has any form of ‘limited supply’, making it a viable alternative to gold, simply by virtue of the fact that ANYONE can build a cryptocurrency, and depending on levels of acceptance – POOF – new supply is created.
The ‘Elon is going to mine gold from asteroids, so Bitcoin is better’ argument from the Twins was met with general incredulity, although their $1.8billion crypto-based wealth doesn’t care what you think. Fair enough.
The logic is, in our opinion, ridiculous, but according to NASA, they are not too far off the mark regarding the space-mining element. We don’t think NASA has an official opinion on Bitcoin.
As of the 24th of October, NASA officially posted an “Active Contract Opportunity” stating “NASA/NSSC has a requirement for Purchase of Lunar Regolith and/or Rock Materials from Contractor.”
Considering that China has recently completed a highly-successful, yet broadly under-reported scientific mission to the moon, we wonder if the US Administration’s sudden interest in supporting private US enterprise to effectively colonise the moon for the purposes of ‘mining moon rocks’ has anything to do with increasing tensions between the world’s two super-powers.
If there wasn’t enough geopolitical bluster domestically on planet earth, the US just decided to crank the dial to 11 and effectively tell the rest of the world…..”US companies a’hem, not the US Government *cough*, is going to the moon….thanks. Goodbye”.
Alexander William Salter from the AIER pens a wonderful piece here, which we’ve included below for easy reference. It includes some superlative legal comment from well-informed individuals, which paint the picture for all to see. If we had to extract one line from Mr. Salter’s article that we think China (and many others) will disagree with, it would be: The position of the US government is clear: commercial activities in space are neither exploitative nor illegal.
Commercial space enthusiasts, we have liftoff! On September 10th, NASA announced that it’s soliciting proposals for private entities to collect lunar rocks and soil. Basically, NASA is offering to buy these materials from the corporations that gather them. This project has enormous implications for the future of commercial space activities.
“Today, we’re taking a critical step forward by releasing a solicitation for commercial companies to provide proposals for the collection of space resources,” announced NASA administrator Jim Bridenstine. One of his goals is to create “a stable and predictable investment environment for commercial space innovators and entrepreneurs.”
Furthermore, he clarified that NASA intends to take an “‘in-place’ transfer of ownership.” Translation: whoever harvests the moon materials needn’t bring them back to Earth. This initiative helps realize Congressional legislation to protect U.S. citizens’ property rights to celestial resources, and gives teeth to a recent executive order promoting the commercial development of space.
NASA is creating financial incentives for private companies to market lunar resources. This could be a first step to developing lunar mining capabilities. The biggest benefit of the program, though, is precedent. It puts the U.S. government’s imprimatur on space commerce. Given the ambiguities in public international space law, this precedent has the potential to steer space policy and commerce in a pro-market direction.
The foundational document of international space law is the 1967 Outer Space Treaty (OST). Drafted at the height of the Cold War, its chief function was to prevent a celestial arms race between the United States and the Soviet Union. That’s why it didn’t include any specific provisions for outer space property rights. Article II of the treaty forbids “national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.” This calls into question the permissibility of private property rights. And Article VI states “activities of non-governmental entities in outer space, including the moon and other celestial bodies, shall require authorization and continuing supervision” by their governments. This suggests that commercial actors must be micromanaged by their governments.
Subsequent treaties tried to clarify OST’s purposes. For example, the Moon Agreement of 1979 clearly frowns on property rights to celestial resources: It forbids making the moon or any of its resources the “property of any State, international intergovernmental or non-governmental organization, national organization or non-governmental entity or of any natural person.” Fortunately, none of the major spacefaring nations ratified the treaty. Nevertheless, a significant portion of the international community supports it.
With NASA’s announcement, the U.S. government decisively rejected this anti-commercial mindset. The U.S. government is not annexing lunar real estate, meaning it continues to affirm OST Article II. And as for Article VI, as space lawyer Laura Montgomery correctly notes, it is not self-executing. It isn’t “enforceable federal law” without Congress passing “domestic implementing legislation.” In fact, Congress passed such legislation: The previously-mentioned law to recognize and protect outer space property rights. It’s clear that Congress is comfortable with markets in space. Finally, because the U.S. government never signed the Moon Agreement, there’s no subterfuge.
The position of the US government is clear: commercial activities in space are neither exploitative nor illegal. Given the vagueness of international space law on property rights, the precedents created by national space law will have a decisive role in shaping the future space environment. Hence, NASA’s actions can support a pro-business turn not just for the United States, but also for the international community as a whole.
In ancient times, mankind extended the division of labor across tribes, turning enemies into friends. Later came trade across national boundaries, with similar largely peaceful effects. Now, humans are prepared to extend it still further: into the final frontier. Doux commerce is coming to the stars. NASA just made a “giant leap for mankind.” Everyone who cares about human wealth and welfare should heartily thank them.
2020 just keeps delivering!
Chart of the Day
Dave Portnoy is the Baron of Bitcoin with the Winklevoss Twins.