The crankshaft is fixed and the crankcase, pistons and cylinders rotate with the propeller.
Rotary engines were used extensively in early aircraft.
In order to run engines at very low speed you need a flywheel to damp out the pulses and to carry the energy from one cycle to the next. In early engines the flywheel had to be large, using the engine as the flywheel allowed the flywheel to be deleted and so the overall mass of the engine was reduced drammatically.
The rotary engine was originally patented by Félix Millet in 1888 and first shown built in a bicycle wheel.
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