Crypto Comes to Space: How Cryptosat Secures Assets From Orbit with Yan Michalevsky

In crypto, owning the private key of a wallet makes you the unquestionable controller of the assets it contains. This is great for sovereignty, but it means that if the private key is compromised, you have no recourse. But what if the private key is in space? This is the premise of Cryptosat, a company that launched several satellites to date, leveraging the vastly cheaper delivery costs enabled by SpaceX’s reusable rockets.

Cryptosat launched two satellites so far, Crypto1 and Crypto2. These are small, coffee mug-sized boxes that contain key machinery for Trusted Execution, enabling secure cryptographic operations.

Trusted Execution Environments, or TEEs, are small enclaves available in most modern Intel processors that enable encrypted computation. Nobody can extract data from them via software, and nobody can tamper with what’s happening inside of a TEE. At the same time, the results of these computations can be easily verified externally.

These features should make TEEs perfect for blockchain applications, but unfortunately, their security guarantees are hardware-based. This means that a number of potential physical attacks could compromise their integrity, which isn’t suitable for blockchain applications. With Cryptosat, the idea is to bring these TEEs to orbit, making it nigh impossible to compromise. We sat down with Yan Michalevsky, Co-Founder of Cryptosat, to learn more about how they’re trying to bring crypto to space.

Hey Yan, great to meet you! Let’s start from the basics of Cryptosat: what’s the use case of a cryptographic satellite in space?

YM: Sure! Cryptosat satellites provide a perfectly air-gapped and tamper-proof environment for sensitive cryptographic computation. Physical security is a major issue for blockchain infrastructure builders and providers, so a satellite in space can mitigate most of these. Specifically we can help bootstrap blockchain protocols, zero-knowledge schemes, and provide security for crypto-assets by protecting transaction signing keys.

How do you ensure the security of your satellites? You mention that there is no physical access to Cryptosat satellites, but what about the ground stations? Can they be compromised?

YM: While ground-stations can potentially be compromised by a powerful attacker, this wouldn’t really affect the security of the protocols relying on Cryptosat satellites. Our threat model asserts that the only part that needs to be trusted is the satellites themselves, and those are far beyond reach. This is because the results of the space computations can always be verified for correctness, so malicious data would be easy to detect.

What are some challenges to making trusted execution satellites? Space is harsh, and most satellites need to be secure from radiation, orbit decay, debris etc.

YM: There were definitely quite a few challenges that we had to overcome to create satellites that act as Trusted Execution Environments. Cryptosat’s in-house expertise enables us to build and launch satellites at a relatively low cost, while addressing challenges such as cosmic radiation and satellite attitude control in orbit. We also have a roadmap for addressing supply chain and physical access concerns prior to launch.

You recently announced an initiative to launch a “Space Wallet.” How does it work? Do you see satellites as a future mainstream solution for managing crypto assets?

YM: The Space Wallet solution protects key-shares that sign transactions as part of an MPC protocol. By preventing any possibility of stealing those keys, Space Wallet forces users to conduct operations through a strict transaction signing API that can ensure policy enforcement and transaction auditing, to prevent unauthorized malicious activity.

For now, this is mostly designed for large institutions that need the utmost security, so it probably won’t be available for Metamask or similar. But it could help make custodial solutions that much safer, so it would indirectly benefit retail users as well.

Prior to the launch of the Space Wallet, Cryptosat helped with the Ethereum KZG ceremony. How is this useful to the security of the upgrade?

YM: Ethereum implements something called Proto-Danksharding in order to scale and increase transaction throughput while decreasing their cost. Proto-Danksharing relies on the KZG polynomial-commitment scheme, which requires a number of cryptographic parameters that need to be generated randomly, and in a credibly correct way. 

Maliciously generating those parameters poses a risk to the entire scheme. 

Cryptographers managed to decentralize the generation of the KZG parameters such that as long as there is one honest party that used good entropy and correctly generated the parameters, the scheme will be fine. Cryptosat generated those parameters in a tamper proof environment: space. Here, neither the entropy used for it, nor the generation procedure itself could be tampered with, contributing to the overall trust in the ceremony.

YM: Will we see other interesting use cases for Cryptosat? Can it validate blockchains or secure private transactions?

Cryptosat is already on the path of helping secure private transactions with the Space Wallet technology developed in collaboration with Dfns Labs. Additional use-cases include trusted setups for zero-knowledge schemes, private voting for DAOs, sealed-bid auctions, and even plans for running an entire blockchain in space aboard a constellation of crypto-satellites.

YM: How do you see the interplay with crypto and space evolving in the future? Will crypto be the “space” currency in a future where Elon Musk’s ambitious plans come to fruition?

The lack of an existing standard for payments in space creates an opportunity for using a more advanced technology than traditional finance from the get-go, positioning blockchain very well as a candidate for filling this gap. However, Cryptosat itself is more focused on immediate applications of space for the benefit of blockchain rather than more speculative future use-cases.

The interview has been lightly edited for context and clarity.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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