Beyond Fiber Optics: The Hardware Reality of a Decentralized Internet

A 2023 report by Access Now revealed 283 instances of internet shutdowns in 39 countries. State authorities and conflicting parties maintain ultimate power over internet accessibility, as they can issue directives to telecom companies to disrupt routing or cut off connectivity. Despite web3 developers' efforts to enhance consensus mechanisms and decentralized storage, physical fiber-optic cables owned by state monopolies render software encryption ineffective.

Governments may compel ISPs to block access based on software-level filters. This physical limitation underscores the importance of Decentralized Physical Infrastructure Networks (DePIN). Satellite-focused initiatives such as Spacecoin aim to decouple network access from terrestrial telecoms. However, bypassing legacy ISPs does not completely eliminate the risk of censorship—it merely shifts the challenge from software firewalls to hardware logistics.

While it is commonly believed that orbital networks circumvent terrestrial regulations, Starlink's legal dispute in Brazil exposes the constraints of centralized physical infrastructure. After Brazil's Supreme Court ordered Twitter to be blocked, Starlink initially resisted compliance. Following a court injunction freezing Starlink's local accounts due to potential liability for fines owed by Twitter, Starlink complied with the court's blocking order.

This sequence of events demonstrates how operating as a centralized corporate entity with a vulnerable financial status creates compliance vulnerabilities. Web3 infrastructure projects seek to address this by separating the coordination protocol from physical data routing. Nevertheless, it is essential to differentiate between protocol decentralization and physical hardware ownership.

Spacecoin's CTC-0 nanosatellite, launched in December 2024, and the subsequent CTC-1 satellites in November 2025, are physically owned and operated by a conventional corporation (Space Telecommunications Inc.). The Spacecoin protocol does not decentralize physical satellite ownership. Instead, its technical plan outlines a separation of tasks, with the protocol managing authorization, authentication, and accounting across the decentralized infrastructure, while smart contracts and crypto payments facilitate bandwidth coordination.

However, the actual implementation of these capabilities in the satellite network may differ from the protocol's stated design. On October 1, 2025, Spacecoin reported a successful demonstration using its CTC-0 satellite to transmit encrypted data across 7,000 kilometers between Chile and the Azores. Although Spacecoin has unveiled regional connectivity pilots and commercial collaborations in 2026, establishing a globally resilient, independently accessible satellite internet service remains a future objective, distinct from its preliminary proofs of concept.