
How Billionaire Asteroid Miners Make Money -- Without Mining Asteroids - mirceagoia
http://www.forbes.com/sites/alexknapp/2012/04/27/how-billionaire-asteroid-miners-make-money-without-mining-asteroids/
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shabble
_Part of the reason for using a swarm is rather than just one Arkyd is,
counter-intuitively, the cost. “The key is redundancy and safety in numbers.
We’re planning for a certain amount of failure, and it’s a lot cheaper to work
for 80% reliability than it is for 99.9% reliability.”_

This is going to be the killer [NPI] feature of using automated rather than
manned systems. Aiming for just-reliable-enough + spares, rather than Failure
Is Not An Option is going to impact just about every single part of it, and
reduce costs massively.

~~~
Nogwater
NPI?

~~~
kgrin
No Pun Intended

~~~
neotek
I once entered 10 puns in a competition hoping one would win, but...

~~~
DavidSJ
That's much less than 80% reliability per pun.

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sunir
As it turns out, they don't have a real plan to mine asteroids. It is just a
big hairy audacious goal. Their actionable plan is more realistic (cheap
telescopy).

Making a spectacular but unprovable and therefore undeniable goal is an
effective way of announcing and positioning your company to the world through
public relations.

Nothing wrong with that. People love to dream and back the dreamers.

~~~
ktizo
I have read through quite a bit of their plans for mining asteroids, such as
they have publicly released anyway. Are you suggesting that they are lying for
short term gain?

Surely that kind of approach would backfire quite badly on them as it would be
fairly obvious whether they are bullshitting or not in less than three years.

~~~
ctdonath
Not lying, but perhaps accepting that it is a big hairy audacious goal with
commensurate odds.

There's good (maybe not great) money in proposing over-the-top megaprojects. A
small office of people writing up plans, solving high-level problems,
presenting proposals, issuing news releases, soliciting investment, etc. can
generate a decent income. Many such project proposals are going on all the
time. My favorites: the floating libertarian city/utopia Oceania, the billion-
dollar indoor ski result near Atlanta GA, and the 5-mile-span bridge over the
Strait Of Gibraltar - all went nowhere, but were inspiring explorations of
what could be done if only for want of funding. These are not "lies", just
dreams on a scale so large that just proposing them attracts nontrivial
income. Kudos to those who try, knowing failure is almost assured.

Science fiction has long hypothesized asteroid mining. We are now at the point
where we have the engineering capacity to do it, and the economy to take
advantage of and benefit from the results; the one thing missing is the moon-
landing and/or interstate-highway scale effort required to make it happen.

...and once in a while, such megaprojects succeed. For those with money to
spare, facilitating asteroid mining (and maybe a space elevator to help) have
a chance to score incredible good for mankind.

"Strange how much human progress and accomplishment comes from contemplation
of the irrelevant." - Scott Kim

~~~
JoeAltmaier
Lots of steps with hard problems to solve.

How do you find the asteroids? (telescopes, answered) How to get mining
equipment up there? How do you mine in zero gravity? How do you get the prize
back home? How do you stop it when it gets here? How do you get it down?

Each of these has a dozen sub-hard-problems. Like zero-gravity mining: how do
you dock with/attach to the rock? How do you get enough energy there to
break/smelt/refine? How do you continue to operate in the ever-expanding dust
and grit halo mining produces? How do you deal with spares/repairs when the
store is a billion feet away? How do you keep your prize once other nations
realize "Hey! There's a trillion dollars of metal out there where there are no
laws! We could just divert them easier than mining them ourselves!"

and on and on.

So,

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hristov
I was excited to see this article, because I reacted the same way as the
author to the initial press release. I was wondering how are they making money
now. Especially since someone mentioned that they had 20-30 engineers and that
is pretty expensive.

Unfortunately the article completely failed to answer the question it posed in
its own title. It listed a bunch of ways they hope to make money in the
future, but did not mention how they make money now.

~~~
yariang
From the article: "We already have contracts with NASA, some private
companies, and even a few private individuals."

~~~
borism
how does having contracts automatically amounts to "making money"?

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SudarshanP
I have no idea why the guys at Planetary Resources do not redirect curious
people to the KISS studies they talk about in their press conference.

[http://www.kiss.caltech.edu/study/asteroid/20120307_IEEE_Pre...](http://www.kiss.caltech.edu/study/asteroid/20120307_IEEE_Presentation.pdf)

[http://www.kiss.caltech.edu/study/asteroid/asteroid_final_re...](http://www.kiss.caltech.edu/study/asteroid/asteroid_final_report.pdf)

[http://www.kiss.caltech.edu/study/asteroid/20120314_ESA_ESTE...](http://www.kiss.caltech.edu/study/asteroid/20120314_ESA_ESTEC.pdf)

I had to dig around for sometime and I thought these papers must be behind
some pay-wall. I was surprised to find them on the KISS website. It is not
that they are clueless about how to bring back an asteroid and extract
resources from it. They just want their MVP to the be the act of prospecting
itself. Also I was really surprised to learn that Ion Engines have been
routinely used before for asteroid missions like
Dawn(<http://dawn.jpl.nasa.gov/mission/ion_prop.asp>). The scaling they need
to achieve for these missions is much smaller than the average non space geek
would expect. Does anyone here know if the scalability requirements of solar
ion propulsion systems they need for the mission of tugging an asteroid into
lunar orbit is realistically achievable by 2020?

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padobson
"That’s because by being able to put a high supply of precious metals on the
market, they might very well depress prices significantly, which would harm
their investment return."

They should consult with the diamond industry on how to keep prices high for a
non-scarce commodity.

As for the commoditizing the equipment for space travel, you have to be
excited about the possibilities. Hobbyist space travel can't be more than 100
years away if you can buy and launch an Arkyd for $5mm today. In the shorter
term, you could do space exploration ventures for the capital equivalent of
what it cost Columbus or Magellan to make expeditions to the West.

It's very exciting. I'm quite pleased work like this is being done.

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sage_joch
"In addition, the telescopes are capable of being pointed at Earth for
observati0n [sic], as well. All of this potential for gathering data is a
potential opportunity to sell that data to universities, businesses, and
government."

I wonder if this is the main source of their positive cashflow.

~~~
davidcuddeback
They could also sell it by access time. For example, University X rents access
to the telescope for $Y/week.

I think (but could be wrong) that's how observatories and other space
telescopes work (except probably government grants instead of outright
purchasing the time). Is anyone familiar with how access to resources is
determined in the astronomy world?

~~~
goodcanadian
Sort of . . .

Telescopes are usually owned by countries, their agencies, and/or
universities. When multiple agencies are involved, there is an agreement on
how to split up access time, usually proportional to the level of funding
provided. Each agency then allocates its share of the time to its stakeholders
based on its own formulas. Time is usually awarded on a competitive basis
where the best science cases win. Generally, from an individual researcher's
point of view, they are not charged for the telescope time. From a larger
point of view, however, it could be argued that their country (or university
or whatever) "buys" a certain percentage of the time. When a new partner
organization comes on board, the agreements are usually structured on an $X
for Y time basis, but it will be a multi-lateral negotiation rather than
simply setting a price and selling to anyone who can pay.

~~~
Tsagadai
So in other words they are entering a market filled with complex pricing
agreements with a simple cost for service structure. Not having to buy into a
consortium is probably a good deal for a lot of people.

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stcredzero
_...they’re focused on low cost delivery. To get to that point, they’re
bringing current approaches to building spacecraft into the 21st century by
focusing on mass production_

Jerry Pournelle proposed this approach to cheap space access decades ago. If
one used well established models for economies of scale, weekly rocket
launches in a free market would cut launch costs by an order of magnitude.
That's also what SpaceX is out to do as well: just take what we know how to do
now, and find ways to do more of it.

~~~
chii
" just take what we know how to do now, and find ways to do more of it."

I m not sure if this works for space travel in its early ages - i mean, doing
"more" of it (e.g., launching more satelites) doesn't mean more "value" is
created , thus doesn't guarentee more profit. Which removes the incentive to
launch more.

The demand for space tech is still low imho, and until it grows, economies of
scale won't apply.

Economies of scale works for things like cars, because everybody wanted one.
It will work when everybody and their dog wants to go up in space.

~~~
stcredzero
_The demand for space tech is still low imho, and until it grows, economies of
scale won't apply._

That's exactly what Virgin Galactic and Planetary Resources are doing for
suborbital vehicles and orbital launch. They're establishing businesses that
increase the demand. Increased demand will mean more vehicles built, which
will mean that economies of scale will start to apply.

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brianl
I can't really see a business case where these guys would make a profit before
their billionaire club gets bored. I don't think images from hundreds of
little cameras are going to be equal the image from the Hubble or its
replacement, the Webb. I hope these guys won't be another Iridium.

Maybe the military is funding them:
[http://www.darpa.mil/Our_Work/TTO/Programs/Space_Enabled_Eff...](http://www.darpa.mil/Our_Work/TTO/Programs/Space_Enabled_Effects_for_Military_Engagements_\(SeeMe\).aspx)

~~~
pavel_lishin
> I don't think images from hundreds of little cameras are going to be equal
> the image from the Hubble or its replacement, the Webb.

My expertise in this field extends to reading several Wikipedia pages and sci-
fi novels, but:

1\. Wouldn't that depend on what they're trying to look at? Can the Hubble
even focus on anything closer than Jupiter?

2\. Wouldn't they be able to use interferometry to effectively surpass any
single-lens telescope?

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burke
As an occasional EVE Online player, I keep thinking these stories are about
the EVE universe. It's always a little world-inverting when I realize they're
actually about real life. This whole concept of asteroid mining is incredibly
awe-inspiring.

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raldi
They say that the only people who got rich off the California gold rush were
the ones selling shovels and pickaxes.

It sounds like Planetary Resources wants to position itself to be the
"asteroid mining rush" equivalent.

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politician
Towards the end, did he say that yes, they will be dumping minerals into the
commodities markets? "It's not about scarcity, it's about access."

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mirceagoia
I am excited about this. This would be like a space Renaissance, after the
'60s.

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frankydp
I assumed they were profitable because they just stuck Billions of dollars in
a savings account... o and robot swarms are cool too.

Orbital fuel anyone? That may be a bigger deal than the automation, in regards
to launch price dropping. Just for assisted reentry allowing reusable
vehicles.

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aptwebapps
That's a pretty neat article but the title undersells it. It makes it sound
like it's just about finance. Robot satellite swarms, anyone?

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ja27
<i>“It’s like computers,” he continued. “They used to be in clean rooms and
handled by guys in isolation suits. Now they’re in your pocket and it’s no big
deal if you drop it.</i>

What computers have ever required clean rooms and isolation suits? Maybe chip
fabrication, but not assembled computers.

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pax
So, in short, How Do Billionaire Asteroid Miners Make Money, Without Mining
Asteroids? I didn't get it

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NDizzle
How billionaries make money: by being billionaires.

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btilly
This scares me. It really does.

These idiots are planning to put swarms of objects in orbit, planning on a
significant percentage failing? Are they actively trying to get the Kessler
syndrome under way? (See <http://en.wikipedia.org/wiki/Kessler_syndrome> if
you don't know what I am talking about.)

Seriously, they need to have a plan for what to do with the junk they will be
creating. If they have no plan, I don't think that they should be allowed into
orbit.

~~~
chc
Would you consider yourself an expert in this area? Because you can bet some
of the people working for them are, so I would feel a bit presumptuous saying
something like that. It _could_ be a legitimate concern, but it could just as
well be the outer space equivalent of the antivax movement.

