The crypto-libertarians using technology to undermine the nation-state

Aside from the Artic and a patch of desert between Sudan and Egypt, there is only one piece of land in the world that is not claimed by any sovereign state. Gornja Siga is a seven square kilometre patch of uninhabited forest on the Croatian side of the Danube River. The border between Croatia and Serbia is disputed by the two countries. The Croatian government, which thinks the border should follow the Danube’s 19th century course, says Gornja Siga belongs to Serbia. Serbia says it belongs to Croatia. That makes it a terra nullius: sovereignty over it is claimed by no one.

No one, that is, until 2015, when a 30-year-old libertarian political activist from the Czech Republic called Vit Jedlicka stuck a flag in the ground and declared it to be the "The Free Republic of Liberland". He quickly rustled up a provisional government and released a constitutional document setting out how this new country would be governed: voluntary taxation, an almost non-existent government, zero restrictions whatsoever on speech or information. And you can do anything you want, as long as you don’t physically harm other people. The freest country in the world, says Vit. The first truly libertarian state. Tens of thousands of people applied for citizenship almost immediately.

Under a grey sky, eight people in a small rigid boat land on a muddy shore beside a derelict craft and a rubber tire. One of them waves the yellow flag of Liberland, while another wields a selfie stick
Liberland citizens occupy an island within their claimed territory CREDIT: JAMIE BARTLETT
Except no other country in the world has recognised this tiny micro-nation – and Croatia is determined to keep it that way. Last month I went to a conference put on by the leaders of Liberland, in eastern Croatia, just a couple of miles away from the promised land (we couldn’t hold it on Liberland itself because Croatia won’t let anyone get access it anymore. In a cruel twist, Vit couldn’t attend the conference, because the Croatian police stopped him entering the country). It was, as you might expect, a libertarian talking shop – 60 or so people from across the world discussing the merits of tiny governments, of voluntary taxation, and how to build all this in uninhabited shrub land.

One technology in particular was on everyone’s mind: blockchain. Blockchain, in case you haven’t heard, is the technology that underpins the crypto-currency bitcoin. Bitcoin works because a copy of every transaction between users is stored on a public, chronologically ordered database – the blockchain. Because a copy of that database is hosted on thousands of computers and is constantly checked by them, it is possible to add new transactions to this blockchain, but simply impossible to edit, change or delete old ones.

Lots of smart tech types have been hard at work figuring out what else bitcoin can do besides crypto-currencies. Turns out: quite a lot. Vitalik Buterin set up Ethereum, which allows people to run all sorts of applications on a blockchain. Microsoft picked it up to provide "Azure" – a way for people working in financial services use blockchain for recording business. Barclays started an "accelerator" programme to invest in blockchain applications. The list grows daily: people have built a decentralised market place, a decentralised Uber, decentralised file storage, and more. Millions of dollars are being piled in.

But the Liberlandians were especially interested in blockchain changing politics and government. Earlier this year, the Government’s chief scientific adviser, Sir Mark Walport, reported blockchains are an exciting new way to record financial, physical or electronic assets in a new, secure, transparent way. He suggested it could help with fighting fraud, reducing error and might provide new ways to prove ownership (George Galloway had an uncharacteristically excellent idea in suggesting public spending should be put on a blockchain).

Adam Kaleb Ernest is the enthusiastic co-founder of Follow My Vote, and had travelled all the way to Liberland from Virginia, in the US. He thinks that blockchains can transform voting. Adam is 33 years old. The first chance he had to vote was the 2000 US presidential election, with its recounts, re-recounts, hanging chads and judicial intervention. When he first learned about blockchain in 2014, he thought back to that contested election. With a public, transparent database of voter records, it might have all been avoided. At the very least, the recount would have been immediate.

So Adam set up Follow My Vote. He wants every voter to use a unique ID to vote, and every vote will be recorded on a blockchain. Double voting would be impossible (you could only vote once with that ID), and counting would be instantaneous. A person’s name wouldn’t be included on the blockchain record – so it would still be a secret ballot – just the fact a vote had been cast for candidate X or Y. Because it would be open to everyone and immune to tampering, everyone could check the results themselves – and that their vote had indeed counted. Stalin once said the voters don’t have any power: it’s the people who count the votes that matters. With Follow My Vote, that would be the same people.

Adam reckons the blockchain permits real-time voting: with a secure and public database, you could know how the population is voting as they are doing it. Imagine that! You could open the polls for a week and then voters could change their vote as the polls change. If your controversial third party candidate is doing well, get behind them. If not, switch to whoever looks most likely to unseat the incumbent.

Doubtless there are technical and legal difficulties. And like so many other new ideas, Follow My Vote started a Kickstarter page to fund its development. Adam’s asking for $3.2m. At the time of writing, he’s raised just $6,685. That’s a shame. Although modern Western democracies could benefit from a more secure voting system, developing world democracies where votes are too often rigged and ballot boxes stuff could be transformed. A blockchain can’t stop government thugs turning up with guns and intimidating voters, but it would be a pain for anyone trying to rig an election. Sadly, this is probably the reason it won’t be voluntarily adopted in places it would be most useful.

No one at the conference was as radical as the final speaker, a woman called Susanne Tarkowski Tempelhof, who is the founder of something called Bitnation. She doesn’t even much like democracy, considering a way of coercing people to follow the opinion of the majority. She wants to use blockchain to deliver nation state services, and eventually replace it entirely. Susanne, who smokes Malboroughs like a 1960s film star, is 32 years old and originally from Sweden, but she’s travelled so much that she’s be more accurately described as one of those ‘global nomads’ who has no fixed loyalty to a single country.

This is how it works. First up, you become a "Bitnation citizen" online and get a world citizenship ID card, a hash of which is uploaded to a block chain. Around 2,000 people have done this so far: Susanne hopes that there will be close to a million within 5 years. In 2015, Susanne found an unexpected use for her service – offering her ID services to refugees. A couple of hundred have taken it up, but I’m not sure how far it’s helped them. It does, at the least, get you access to a debit card which takes bitcoin.

Susanne’s big offer at the moment is a notary service. Using Bitnation’s notary service you can notarise an important document, such as a wedding certificate or land registry document and upload it to the blockchain where it will stay forever (according to the website, Bitnation also provides an "education program", "physical security", and even a "space agency").

In the UK, despite a few frustrations, we have a pretty decent system of recording births, marriages, land ownership and the rest. But that’s definitely not true in most of the world. Hernando De Soto, a Peruvian economist specialising in land ownership, estimates that five billion people live without adequate records of what they own, and that creates serious challenges for documenting their economic activities and their assets. In addition to making them vulnerable to government whim, without proof of ownership people can’t leverage what they own to invest or borrow finance. And that means they cannot climb out of poverty. Blockchain notary systems could actually fix that.

Governments are starting to take note. In 2016 the government of Georgia announced they would develop a system of registering land titles using a blockchain; the government of Honduras has plans to do likewise. In 2014, the small Baltic country of Estonia launched something called the e-Residency programme, which allowed anyone in the world to become an Estonian e-Resident. They then partnered up with Susanne to provide a joint notary service. But it’s not all dry documents about who owns what. In December last year Edurne Lolnaz and Mayel de Borniol, a Basque couple in their twenties got married on the blockchain, in Finsbury Park, north London. I went to the reception. Nice couple.

All this is a stepping stone to Susanne’s extremely radical vision: a world where consenting adults could choose their own code of law to live by. Let’s imagine a group of people decided to get together and live in some kind of secretive co-operative, with their own set of laws – polygamy, no private property, an internal tax system, whatever. They would write it all out, put it onto a bitnation blockchain and everyone who wants to live by it signs up. To give it some force, they would write smart contracts (contracts on the blockchain that automatically execute instructions if certain conditions are met) that are tied to assets they own. So if one rogue didn’t pay the internal tax, the contract would just take it anyway. It’s the pinnacle of libertarianism – a way of using technology to enforce agreement without reliance on a central power with a monopoly on force.

Of course we can’t do this while we all live in nation states, because we all have to follow the single law of the land. But Susanne predicts a time where millions of people start to think Bitnation is a better model for life because it’s cheaper, more efficient, and offers more freedom. Citizens, she thinks, will start ignoring the nation state and live by their own codes of law, all done using cryptography, untaxable crypto-currencies and invisible internet-based communication.

"The nation state is a criminal oligopoly, a mafia," she told me after the conference, because it doesn’t really rest on the consent of the governed. You have no way to opt out, since the nation state oligopoly covers all the world with the exception of Antarctica (and Liberland). If you’re born somewhere, you’re subject to that country's laws, whether you like them or not. She thinks the only morally defensible system of law is a voluntary one. I struggle to work out how on earth this would actually work, at least in the foreseeable future. "Maybe 50 years," she says.