Crypto Billionaire's Space Dream: Investing $1 Billion to Build Commercial Space Station

Original Article Title: A Crypto Billionaire's Gamble to Replace the International Space Station

Original Article Authors: Kiel Porter, Loren Grush, Bloomberg Businessweek

Original Article Translation: Luffy, Foresight News

Jed McCaleb, who has amassed wealth in the cryptocurrency field, is now prepared to invest a significant portion of it in his space dream.

The infamous founder of the Bitcoin exchange Mt. Gox and the cryptocurrency XRP, now a billionaire, is single-handedly funding an ambitious plan: to build the world's first commercial space station and send it into orbit.

If successful, his startup company, Vast Space LLC, could win a contract from NASA next year worth potentially billions of dollars to replace the International Space Station. McCaleb has stated that if the endeavor fails, he is prepared to absorb a $1 billion loss. By the end of 2023, McCaleb, through two foundations, controls assets worth billions of dollars, with $3.3 billion of the foundation's assets originating from his personal donations.

"For humanity to live beyond Earth, this step is crucial," said the 50-year-old McCaleb at his company's headquarters in Long Beach, California. "Not many people are willing to commit as many resources, time, and tolerate risks as I am."

Since then, he has hired an industry veteran as CEO, and SpaceX has been providing partial technical support to Vast. Meanwhile, Elon Musk is urging the U.S. to expedite the International Space Station's retirement schedule (currently planned for the end of 2030). Established in 2021, Vast's spacecraft incorporates some components developed by SpaceX, particularly the docking adapter for connecting SpaceX's Dragon spacecraft to the Vast space station and a space-based internet system through Starlink to provide Wi-Fi for the station. Vast has already booked SpaceX's launch services to send its hardware into orbit and transport astronauts to the space station, with SpaceX agreeing to ferry astronauts for Vast pending NASA approval.

However, the task remains formidable, and from McCaleb's background, it is hard to see him as the person capable of pulling it off. The Arkansas farm boy and UC Berkeley dropout has no aerospace industry experience. His career has been characterized by seizing early advantages in emerging technology fields, then pivoting timely before government regulation and other unfavorable factors disrupt the industry—a short-term mindset that seems to clash with the long-term focus required to win a high-stakes race to create a technological marvel.

Headquartered in Long Beach, Vast, Source: Bloomberg Businessweek

Sam Yagan is a friend of McCaleb's, having co-founded an online file-sharing company with him over two decades ago. Yagan is now the Co-Founder and Managing Director of Corazon Capital, and he describes the entrepreneur as a thoughtful adventurer. "He's very rational about these things," Yagan says, "but he's willing to take what you and I would consider enormous risks, a bit of a maverick."

Many of Vast's employees are former SpaceX staff. The parking lot at the company's headquarters is filled with cars made by Musk's Tesla. One of the Cybertrucks belongs to Max Haot, who joined Vast in 2023 after McCaleb acquired his company. Haot then became Vast's CEO, prompting McCaleb (who drives a more standard Model 3) to fly in from his home in San Francisco once a week to oversee the project's progress.

Prior to the acquisition, Haot had not been focused on the space station sector. Instead, he had been trying to emulate Musk by founding another rocket launch startup called Launcher. The company received a $30 million investment, made progress in developing rocket engines and launch vehicles, but saw both satellites it built fail after reaching space. In 2022, Haot encountered McCaleb while seeking investors.

McCaleb proposed the acquisition and agreed that Haot would serve as Vast's president, eventually becoming the CEO. Haot initially resisted the deal but changed his mind when he realized Launcher was struggling to secure the needed funding.

Vast Founder and Chairman Jed McCaleb with CEO Max Haot at the Mojave, California testing site, Source: Bloomberg Businessweek

Vast's grand vision is not only to build the first private space station but also to develop an artificial gravity system to simulate Earth's environment for future astronauts. This endeavor is highly complex, requiring the use of centrifugal force to set up large rotating habitat sections in space. The proposal is compelling as human experience on the International Space Station has shown that prolonged exposure to microgravity can harm various biological systems.

However, all of this is still far off. Currently, Vast needs to send its first space station into orbit. The company's workforce has grown rapidly from less than 200 people a year ago to 740 people, covering a wide range of talents from technical engineers to spacesuit manufacturers. Vast's headquarters operates 24 hours a day, with engineers and construction workers working in shifts, either expanding the Long Beach facilities or constructing Vast's first prototype space station, "Haven-1".

Space stations are a common element in popular culture, such as the Death Star in "Star Wars" and the eponymous space station in "Star Trek: Deep Space Nine". Since astronauts first boarded the experimental Skylab in 1973, space stations have been a significant part of U.S. space exploration. Decades later, following the end of the Cold War, NASA collaborated with countries like Russia to build the larger International Space Station. Since November 2000, there has always been at least one astronaut on the International Space Station, often conducting research on materials and human behavior in a microgravity environment.

A technician at Vast's headquarters, Source: Bloomberg Businessweek

Haven-1 is approximately 33 feet high (about 10 meters) and 14.5 feet wide (about 4.4 meters), designed to snugly fit into the nose cone of a SpaceX Falcon 9 rocket. The livable space of this space station is about 1600 cubic feet (45 cubic meters), roughly double the size of a typical RV. It will be equipped with private sleeping pods, a large window, wood paneling, and a table for four.

At least, that's the goal. In January of this year, the company began building Haven-1, scheduled for launch in May 2026, a delay from the initial plan of this August. The company recently tested a prototype to confirm its structure could withstand internal pressure and is developing power systems, propulsion units, and other key components for manned missions. Its shell must endure the harsh environment and temperatures of space while maintaining the atmospheric pressure and gas composition humans are accustomed to on Earth.

"Right now, we are not yet a true space station company," Haot said. "We are an aspirational space station company."

The main structure of Haven-1 awaits further testing at Vast's Mojave base, Source: Bloomberg Businessweek

Assuming all goes well, after the launch of Haven-1, Vast will use a Falcon 9 rocket to send four astronauts into space to dock with the space station. If the first launch is successful, Vast plans to launch the first module of the Haven-2 space station by 2028. It will serve as a starting point for a larger base intended to replace NASA's International Space Station.

One of the biggest challenges will be to create an effective life support system. The International Space Station employs regenerative systems that recycle all wastewater into drinking water and convert carbon dioxide into breathable oxygen. Such a system is essential if passengers are to stay long term on the space station, but Haven-1 will not be equipped with one as the astronauts are expected to only have a short stay. Vast plans to eventually equip Haven-2 with such a system, but it is not expected to be continuously manned in the first few years.

Rival companies including Axiom Space, Blue Origin, and Voyager Space Holdings are also competing to build their own space stations, but one of Vast's advantages is McCaleb's willingness to invest heavily in the project. "Vast is the only major player relying on its own funds and ready to go," said Chad Anderson, founder and managing partner of Space Capital, an investment firm focused on the aerospace industry. "In this regard, they are an interesting choice." (Anderson has no financial ties to Vast but has invested in SpaceX.)

While these competitors have a background in aerospace and some launch contracts, they do not have such a close working relationship with SpaceX.

Engineers working on the life support system at Vast's headquarters clean room, Source: Bloomberg Businessweek

McCaleb is eager to downplay any personal connection, stating he has met Musk "a few times, he probably doesn't remember me," even though both have invested in OpenAI. Despite their differences in approach and demeanor, they have many similarities in interests and non-traditional paths to wealth: both dropped out of college (Musk dropped out later), founded software companies in emerging fields, and turned their passion for fantasy and games into financial success.

McCaleb's first project, eDonkey, was one of the earliest file-sharing services on the internet and a competitor to Napster. Founded in 2000, the company allowed users to share music and movies for free, bringing in millions of dollars in revenue annually through advertisements. In 2006, in order to avoid copyright infringement lawsuits, the company agreed to pay $30 million to the Recording Industry Association of America and subsequently shut down.

McCaleb's next success was Mt. Gox, one of the world's first Bitcoin exchanges. The website was founded by McCaleb in 2010, and a year later, he sold most of his stake at an undisclosed price. In February 2014, the exchange filed for bankruptcy, and users lost over $400 million worth of Bitcoin at the time, marking the largest cryptocurrency disaster in history until FTX's collapse in 2023. Despite still being a minority shareholder, McCaleb faced no sanctions and stated that he also suffered losses in this disaster.

At that time, McCaleb had already started his next venture: XRP, a cryptocurrency on the Ripple protocol, of which he was also a co-founder. McCaleb initially owned 9% of XRP. After disagreements with other co-founders, he left the company in 2013 but retained his XRP, gradually selling it off in the following years. According to XRPScan's analysis, during the cryptocurrency bull run at the end of 2017, XRP's value surged, eventually reaching a market capitalization of $130 billion in January 2018. Between 2014 and 2022, McCaleb netted approximately $3.2 billion by selling XRP and Ripple equity.

"He is one of the ten most important founders in the cryptocurrency space, although few really understand him," said Nic Carter, founding partner of Castle Island Ventures, a venture capital firm focused on public blockchains. "Interestingly, other key figures are mostly those flamboyant, high-profile, spendthrift types."

Despite his massive success, McCaleb's social circle is small, primarily collaborating with Yagan and other longtime partners. He has a house in the surfing haven of Costa Rica, a residence in Berkeley, and owns his private jet.

McCaleb has provided a stable source of investment for the notoriously volatile aerospace industry. In this field, once-promising startups often fold due to a lack of funding. While a former employee filed a lawsuit alleging that Vast attempted to cut corners, the company does not seem to have the same negative press as SpaceX. Its billionaire CEO spends most of his time at home with his wife and three kids rather than trying to take on the federal government.

Haven-1 at Vast's testing facility, Source: Bloomberg Businessweek

If McCaleb's plan succeeds, Vast has already booked multiple crewed missions with SpaceX to send astronauts into orbit. McCaleb and Haot have both expressed their willingness to take these flights themselves. "As a kid, I spent a lot of time outdoors exploring, looking up at the sky in awe of its wonder," McCaleb said. However, all of this hinges on whether the company can secure the final contract for the NASA program aimed at launching a commercial space station project that could potentially replace the International Space Station. The plan comes with a soft guarantee that NASA will purchase time and space on any station that makes it to orbit. This contract is expected to be signed by mid-2026.

Haot said that without the NASA contract, the commercial viability of any space station is questionable. "Winning this competition is a matter of life and death for us."

Original Article Link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia