Bigelow Aerospace has been at this inflatable space station thing for quite a while and it’s actually got two prototypes in orbit already. Of course, Bigelow’s modules, while they do inflate, are far more complex than a simple balloon. They contain radiation shielding that’s as good as or better than the current shielding on the ISS, and their ballistic shielding (which provides protection against micrometeorites and orbital debris) is also more effective than traditional designs.
NASA is interested in getting in on a piece of the inflatable action for several reasons. The first one is cost: using Bigelow modules, NASA could substantially increase the size of the ISS at a fraction of the cost of more traditional station modules.
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