Month: March 2024

Bitcoin Nation – SHOW ME THE INCENTIVE (Pt.2-Ch.9)

My new book “Bitcoin Nation” was published on the 15th anniversary of the Bitcoin Whitepaper, October 31, 2023. You can read it below, one chapter per week. Or buy it here:

Let’s return to the present. Regardless, whether you consider my vision utopian or dystopian. No matter whether you agree with my analysis that totalitarian governments are the only possible alternative. There is likely one question burning in your mind:

“Why would states agree to this?”

The incentive structure for the bigger states is obvious. They can only gain by allowing citizens from other states to join. Especially as long as they can keep the monopoly on their heartland.

Why on earth should a small state allow its citizens to leave, though?

As Charly Munger once said:
“Show me the incentive, and I’ll show you the outcome.”

While not obvious at first glance, there is still a strong incentive pressure on small states to agree to the increasing digital citizenship invasion.

The first one is simply “might is right”. The so-called “rules-based world order” is only propaganda. If you speak privately to any politician in poorer nations, they are all aware that they serve purely on the grace of the United States and other big military powers. Whenever a leader tries to rise up against the US, he’ll either face assassination, invasion, or a coup. The only alternative for them is to ally with another nuclear power, e.g., Russia or China. Small and poor countries have no choice, but to accept a dictate by the superpowers.

Of course, other incentives exist as well. Already today, some countries offer services to ex-pat citizens. If you have a US passport, then you are liable to pay taxes, even if you live abroad. As a compensation, you receive all the freedom of movement this passport grants you and often, the US government will try to bail you out if you get in trouble.

US basketball star Brittney Griner is a prime example. She was imprisoned in 2022 in Russia for possession of marijuana. After 10 months in prison, US diplomats negotiated a prisoner exchange, freeing her.

Furthermore, the US already has tax treaties in palace with several countries, clarifying which portion of the taxes a US citizen pays will go to the United States treasury and which to the host state.

Such tax treaties are not simply brute forced on “third world” countries, but are voluntarily accepted by top 5 economies like Germany. The benefits of such tax deals are usually mutual. Germany has higher taxes than the US, so businesses and high net-worth individuals have a reason to hold their assets offshore. Thanks to the treaty, the US will report German citizens who try to hide their profits in the US of A, to German tax authorities.

The treaty is thus profitable for both governments, but to the detriment of the citizens.

As you can see, the first miles on the road to Bitcoin Nation have already been travelled. The next steps will likely happen purely out of governmental self-interest as well.

To put it in a nutshell:

State governments don’t plan to create Bitcoin Nations, nor to voluntarily give up their territorial monopoly. They will gradually progress to this end because they want to keep the wealth and power for their elites as long as possible. In a world, where the demographic bomb is making this exponentially difficult to do in traditional state structures, Bitcoin Nations are unavoidable, unless states are willing to commit horrific crimes.

Bitcoin Nation – THE DAWN OF A NEW ERA (Pt.2-Ch.8)

My new book “Bitcoin Nation” was published on the 15th anniversary of the Bitcoin Whitepaper, October 31, 2023. You can read it below, one chapter per week. Or buy it here:

In the following chapter, we will take a mental journey through the next decades and centuries, under the premise that Bitcoin Nations become a reality. This journey will obviously not happen as predicted, it is meant as an inspirational exercise. If I do my job well, you will hopefully return from this trip burning with excitement for Bitcoin Nations and ready to work hard on making them a reality.

It is the year 2042. The United States of America have just announced that they will now be extending their digital citizenship program with a real estate option.

Citizens paying for the top-tier membership will now have the option to convert any landownership

they have to US territory. Shortly after, the UN ratified a note clarifying that the US move is covered by the right to self-determination.

Any citizen who converts property in countries who signed the UN note will be able to convert the land to US soil. Upon payment of a small fee, the title will be transferred within 30 days. Property taxes, will be guaranteed to be less or equal to the current property taxes for the first 20 years.

For “national security reasons”, it is agreed that conversions between nationalities are only possible for territory outside the US mainland.

As a result of this last addendum China, Russia and many Brics nations refuse to ratify the UN note and instead propose their own digital citizenship concept. They do not enable to fully transfer territory between each other, but rather allow to rent territory for max. 99 years for private and 50 years for commercial use. Rented property is essentially treated like a consulate of the digital citizenship nation.

Over the next decade, the competition for skilled labor and investment forces more and more nations to allow territorial sovereignty. The big states, China and US, gobble up more and more digital citizens until they encapsulate over 60% of the total population.

In 2062, the growing tensions between the two giant nations results in a crisis, with more and more digital citizens moving into the competing mainland. Pressure is mounting that the mainland exception clauses are deprecated.

With the danger of WWIII increasing daily, diplomats are desperate for a resolution. In an unexpected turn of events, a delegation from the Bitcoin Nation sends an offer to both territorial market leaders.

The following deal is proposed:
All 2 billion members of the Bitcoin Nation, whether they already have any other digital citizenship or not, offer to subscribe to a digital citizenship by whichever of the big nation offers it certain privileges.

Since, the Bitcoin Nation accounts for only 20% of the world population, but 51% of global GDP, this deal is irresistible and the United States make an offer. This offer is quickly followed by a better Chinese counteroffer.

After several weeks of negotiations, the UN note is updated to now allow all digital citizens to switch their territory to a nation of their choice. To prevent a new colonialism, where nations coerce their citizens to let the government inherit property, a market solution for property ownership is found. Private residential property can be only passed on to heirs that also inhabit it. Otherwise, every property is put up for auction regularly, where corporations, citizens, and nations can bid on a property ownership, limited to a max term of 99 years.

This moment will later go down in history, as the moment when large-scale wars were finally ended.

This new system greatly favors the Bitcoin Nation, which by the year 2140 has acquired 80% of the population. It is not a giant super state, however.

The Bitcoin Nation only offers a very basic human rights protection service and diplomatic services with all the small independent nations.

All other topics are federally organized in location and preference-specific clusters that have not much in common at all.