The Lofstrom Loop might be hamstrung by the problem of The Political Economy of Very Large Space Projects. http://www.jetpress.org/volume4/space.htm
Prototyping ServerSky is quite the opposite, however: it's going to become much easier. And if prototyping it shows a clear-cut business case, the decision to launch ServerSky becomes only net-present-value computation, not a problem of political economy. If the Lofstrom Loop proves to be the most cost-effective way to scale ServerSky (and maintain it), it'll just happen.
Here's how I think prototyping ServerSky could become easier: Zac Montgomery at Cornell announced a Kickstarter project last year called KickSat: a CubeSat that sprays chipsats (Sprites). He met his funding target quite handily -- in fact surpassed it by a fairly wide margin. I think KickSat will be launched within the next year or so, courtesy of NASA's ELaNa program.
http://brad.denby.me/starblog/2012/02/
Zac's current emphasis is on proof-of-concept: he wants to just get a launch, and show that ground communication with customized chipsats can be established. The demonstration effect might be quite dramatic. With luck, it could become a global R&D phenomenon roughly paralleling the "mainstreaming" of VLSI design in EECS departments, as inspired by Carver Mead and Lynn Conway, back in the late 70s and early 80s.
Zac's a mere grad student, of course. But the Cornell prof who was leading up his group, Mason Peck (himself a pioneer of the chipsat concept), has since moved into NASA as Chief Technologist, replacing Bobby Braun. So I expect to see significant ferment on the chipsat front. Testing the ServerSky concept any time soon (soon enough to reduce terrestrial energy consumption, anyway) will probably depend on global, massively parallel concurrent engineering and testing of real hardware under real space conditions. I think the financial barrier to such an effort is about to drop to a point where even engineering students in the developing world can consider participation in projects that actually go to orbit. Out of such a milieu, the chance that some very useful innovation arises as an unintended consequence seems high enough to make the effort worthwhile, regardless of whether ServerSky itself hits a showstopper. The Mead-Conway design movement had many flaws, but the first RISC on a chip was one of its early successes; if I'm not mistaken, the ARM chip in your smartphone has a heritage tracing back to an ISI multi-project chip design at Carver Mead's home university, Cal Tech.
I've written on the subject of whether there's anything like a Moore's Law for space launch. I don't think there is one -- launch is governed more by something like Moore's Second Law (the cost of fab lines keeps growing fast), only with a much bigger problem of establishing the Killer App for commercialization.
http://www.thespacereview.com/article/180/1
But I think Moore's Law can still be a driver for space development. New products and services made possible by VLSI scaling (both on spacecraft and on Earth) could result in higher launch rates, which could improve the economies of scale in launcher production and launch operations, and maybe eventually trigger funding in radical space launch technologies -- maybe even Launch Loop, among other ideas. ServerSky is one scenario for "new class of commercial space value propositions". I consider it plausible, at least, if not yet probable.
I have reservations about BitCoin, but mainly on the monetary policy level. Inflation sometimes has its uses in economic policy, and deflation can sometimes be a lot more disastrous than inflation. I think BitCoin, by capping the total amount of money that can possibly circulate, would lend itself to liquidity traps - a deflationary spiral.
However, the idea of "computationally mining the sky" (not just using solar energy, but also using the cosmos as a heat sink) is positively brilliant. Perhaps the only question is: when will its time come?
To be clear: I wasn't proposing KickSat as a business model. That never even occurred to me. For one thing, immediate practicality seems like an awful lot to ask at this point. If the goal is massive computing power in orbit, KickSat isn't going to deliver practicality. (I've got a Sprite coming, and when it arrives, I'll be writing code for a slow 16-bit microprocessor for the first time in perhaps 25 years.)
The more important goal at this point is obvious: to get more reality-testing of the ServerSky idea. We can get more reality-testers if there's an increase in awareness of the idea -- which is why you're posting this notice to Less Wrong, yes? Thinsats seem like an absurd idea on the face of it. But the same could have been said of the planar transistor before it happened. As soon as you had one planar transistor, people started thinking about it the whole idea a lot more. That first planar transistor wasn't a commercially practical device. Probably the first few thousand fabricated at Bell Labs weren't practical. What drove commercialization efforts at that point wasn't profit, it was promise -- a promise made more credible by a physical realization.
Call it "hardware as propaganda", if you like, but most people don't really believe in what they haven't first seen. Less Wrong isn't "most people" -- it partakes of a strong speculative mindset. Please understand -- I like powerful speculation, personally. But it's hardly representative of what makes most people invest time and effort, much less money, in an idea. Talking about planar transistors didn't put the word "germanium" on people's lips. Making one did. It turned out silicon was really the ticket. But if a germanium planar transistor hadn't gotten people saying something, nothing would have happened.
If I had to pick a key phrase in what I posted above, it's "demonstration effect." At this point, it seems the best way to physically demonstrate anything remotely like ServerSky is with a Sprite fleet.