Bitcoin Forum

The cryptocurrency movement has been wildly successful so far despite challenging many established power structures that would presumably seek to destroy it. I won't speculate on why they have been unable or unwilling to do so but from all indications they will not in the near future. Yet the cryptocurrency movement is hardly the first that seeks to provide alternatives to powerful and established structures. From the Principality of Sealand (https://en.wikipedia.org/wiki/Principality_of_Sealand) to Forvik (https://en.wikipedia.org/wiki/Sovereign_State_of_Forvik) the "micronation" movement has sought similarly to provide alternatives to existing state entities. They have almost universally failed, with some being raided by the existing authorities and most being completely ignored except for by hobbyists. Why the disparity between these two similar movements? Basic speculation suggests that it is because micronations have failed to adopt the most useful traits of cryptocurrencies. Below four of the most important features of cryptocurrencies that alternative states such as micronations should seek to emulate but have not are highlighted:

1. Additional value, particularly via the application of cryptography

This is the most critical feature that existing micronations entirely lack. Cryptocurrency systems like Bitcoin add plenty of value to the concept of a currency, their most important feature being the assurance that they provide above and beyond traditional currencies. With cryptocurrency a holder can be assured that pure mathematics and cryptography will be used to protect their currency, to prevent its seizure or transfer without their consent, and to prevent the arbitrary creation of additional units of currency. Separate from the later speculation and interest due to the possibility of material gain, it was this added ideological value, the inherent integrity of cryptocurrencies, that fueled the movement in its earliest stages and continues to provide it legitimacy today.

Micronations meanwhile provide no such additional value. Even those that have managed to transcend the digital world and "claim" a small amount of territory more resemble vanity projects designed to glorify their creators or mere roleplays for their amusement. Furthermore they do not in any way explore the theoretical possibilities of government, with most clumsily aping the representative democracy systems of existing governments or being simple autocracies. They are all style and no substance.

Yet this does not have to be the case. Cryptography can provide as much additional value to the concept of governance as it has to currency. When a voter today goes to the polls in any country, they have no guarantee of the accuracy of the results other than their government's assurance. Cryptographic voting systems (https://en.wikipedia.org/wiki/End-to-end_auditable_voting_systems) can correct this. Cryptographically-enforced identities, using required cryptocurrency payments, webs of trust, or required proofs of work, could help reduce vote fraud. Alternative states allow individuals to explore the possibilities of alternative government systems such as futarchy (government via prediction markets) (http://hanson.gmu.edu/futarchy2013.pdf) and liquid democracy (http://www.liquidfeedback.org/), much like cryptocurrency allowed individuals to explore alternative forms of currency such as deflationary and demurraged currencies that were not like to be considered by the dominant authorities. Just as cryptocurrency has provided a solution for many to the corruption of traditional currencies, so too can these methods be used to provide a solution to the corruption of traditional states.

2. Decentralization

Many existing micronations that have made territorial claims have eventually had said territory raided or otherwise interfered with. Others exist solely as a centralized website, easily taken down and only saved by their own irrelevance. If robustness is sought, then alternative states must remain just as resilient against attack as cryptocurrencies are. Decentralization provides this. Protocols such as Bitmessage and Freenet show that the communications necessary for governance can be achieved in a decentralized manner.

3. Gradualism

The worst failure of micronations is that they have refused to accept the nature of their task. The creation of a state, in its most fully realized sense, is a profound political change. Like all political changes, to be successful they must be supported by a larger number of people before their realization, not after. Most micronations attempt to function exactly as their more established predecessors from day one, seeking immediate diplomatic recognition from all of the other nations of the world, demanding membership in international organizations, and maintaining a fiction of equality with established states at all times. Cryptocurrencies have not suffered from this mentality. The creator of the first cryptocurrency, Satoshi Nakamura, did not seek a currency code from the ISO, recognition from the Federal Reserve, or listing on existing currency exchanges. He recognized that the adoption of an alternative structure was a gradual process. Existing micronations have put the cart before the horse in this regard. Any successful alternative state must support a governmental structure that allows for its gradual expansion.

4. Freedom of choice

In the realm of cryptocurrency, a user is no more forced to use Bitcoin than they are Litecoin. This freedom of choice allows the best ideas to flourish. Alternative states can allow their citizens a similar choice, to perhaps renounce citizenship in one state and gain citizenship in another without changing out of their pajamas.

Alternative states that apply the above principles, particularly the application of cryptography, are aptly titled "cryptostates" by analogy to the word "cryptocurrency".

Why these should exist and would help cryptocurrencies

The implications that cryptostates could have for human choice and freedom are obvious. One likely already either agrees or does not that existing states warrant alternatives.

What particularly deserves to be highlighted is the complementary nature of cryptocurrencies and cryptostates. Cryptostates, being of a similar nature to cryptocurrencies, would naturally be more disposed to them than traditional states. To the degree that cryptostates gain influence in lieu of traditional states, the holders and users of cryptocurrencies could expect profit and benefit in proportion to the amount of regulation biased in favor of traditional currencies that is eliminated or evaded. In addition, the noted danger that traditional states pose to cryptocurrencies is reduced.

Cryptostates could provide some of the stability and structure that is lacking in the cryptocurrency ecosystem, helping to eliminate the "wild west" perception plaguing cryptocurrencies. A cryptostate adopting a futarchist model could also give cryptocurrencies suitable investment markets (prediction markets) that they have been lacking, simultaneously spurring investment and interest in cryptostates via the profit motivation while aiding cryptocurrencies. The two are a natural fit. This and more should provide the economic incentive and justification for cryptocurrency users to pursue cryptostates.

Transition

The primary intended purpose of existing states is to provide protection for their citizens, to resolve issues that disturb the peace or otherwise violate the rights of individuals. If individuals find that cryptostates provide a superior resolution to these issues than traditional states, then they will prefer to turn to them rather than traditional states. This could already serve to put a number of financial issues and other non-violent crimes under the jurisdictions of cryptostates, who from the perspective of traditional states would merely be perfectly legal private arbitration courts.

Some might think that cryptostates would be incapable of emerging into the physical world and remain a purely digital phenomenon. This is not necessarily true. Like all potentially superior alternatives, they could be adopted via a gradual process in all facets of life. The necessary component of a transition into enforcing issues that affect the physical world is a physical presence. Cryptostates are not necessarily incapable of providing this. Once they reach a certain degree of saturation, they may enlist average citizens to enforce their laws among their populace, providing some form of incentive or gameification to encourage this. Individual citizens of the same cryptostate that are close geographically may convene to form courts, watches, or whatever other service they deem necessary.

Eventually, via voluntary donations of capital, enforced taxation (which individuals would agree to by joining the cryptostate in the first place), lotteries, or other means of gaining revenue a cryptostate might be able to afford more professional law enforcement. Individuals, even non-citizens, may choose to turn to these alternative law enforcement structures if they find them exhibiting more integrity and less corruption and brutality than existing law enforcement agencies. The power of existing states will be reduced as less criminal issues are brought under their jurisdiction. These alternative law enforcement structures will serve to advertise the cryptostates, causing more individuals to join them and increase their revenue base, allowing them to employ even more people.

Existing law enforcement officers, either for ideological, personal (if citizens think more kindly of cryptostate officers than traditional ones), or financial (if cryptostates, which would likely deal in sound cryptocurrencies as opposed to less stable fiat currencies, can provide greater financial benefit than traditional states) reasons might prefer to join a cryptostate law enforcement agency rather than its traditional equivalent. With less manpower to enforce their edicts and less people voluntarily seeking their services, traditional states could slowly and gradually fade into irrelevance, via a purely decentralized process. From the perspective of existing states, most of these actions would be no more illegal than those of private security agencies. Cryptostates enable civil and bloodless revolutions.

Cryptostates could also act as a vehicle for the creation of seasteads (https://en.wikipedia.org/wiki/Seasteading), and may be similar or complementary to decentralized autonomous corporations (https://en.wikipedia.org/wiki/Decentralized_Autonomous_Corporation)

Punishment

To have laws in any reasonable sense, a state must be capable of enforcing sanctions against those who violate them. Before cryptostates transition into the physical world, they must also have some means of doing this. This is not impossible via purely digital means. Some possibilities are presented below:

1. A citizen may gain more democratic influence in a cryptostate's government, such as more votes, as time goes on, or if they perform valuable services for the cryptostate. These may be taken away as punishment for criminality.

2. A citizen may be required to put up a certain amount of money as collateral (that would be returned to them in the event of their exit) to become a citizen of a cryptostate. This amount could be taxed as a penalty.

3. A citizen could be expelled from a cryptostate, or added to a "blacklist". This blacklist could prevent other citizens of the cryptostate from transacting or even acknowledging the blacklisted individual indefinitely or for a period of time, with possible additional penalties applied to those who choose to do so.

Mechanisms such as futarchic prediction markets could provide more alternatives.

Starting a cryptostate

To start a proper cryptostate, the following would likely be required:

1. A means for citizens and government officials of the cryptostate to communicate in a decentralized manner

2. A means for deciding which proposals are to be adopted

Futarchy seems to be the most promising system in this regard. The "welfare metric" (as explained in Hanson's paper about futarchy) of the system could be the number of citizens in the cryptostate, the number of citizens multiplied by their respective satisfaction with the cryptostate, the same metric weighted by the amount of time a citizen has been in the cryptostate (encouraging citizens to hold on to their citizenship long-term and causing the value of a citizenship to increase over time, much like a deflationary asset), the amount of tax revenue received by the cryptostate, or any other reasonable metric that encourages prosperity and expansion (with changes possible via democratic processes). If prediction markets are as successful in determining information as existing results suggest, then a cryptostate adopting this approach would already have a major advantage over any traditional state.

3. A means for deciding legal cases

4. A means for applying sanctions to criminal citizens

How to do the above could be decided by prediction market.

5. A means for enabling citizenship

A citizenship in a cryptostate likely would merely be a cryptographic identity, much like ownership of currency in a cryptocurrency is merely a cryptographic key. In the future, cryptostates could possibly invest in offering more traditional citizenships based on biometric markers. The expense involved in acquiring a citizenship, in terms of time, effort, computational proof of work, money, or other resource expenditure required could be decided via the same process as everything else.

None of these requirements seem technologically prohibitive given the success of cryptocurrencies.

Cryptostates and anti-statism

Some who consider themselves anti-statists might be opposed to the idea of a cryptostate, believing that we don't need any states at all. It is true that there is nothing inherent in the idea of a cryptostate that prevents them from adopting policies as repressive as traditional states. It is also true that given the processes they would likely use and the communities that they would emerge from that they are far less likely to do so. A cryptostate may make it a basic, immutable rule that exit from it must be voluntarily available for all of its citizens, and refuse to associate with other cryptostates that do not. If this were the case, a cryptostatist world would more closely resemble a panarchy (https://en.wikipedia.org/wiki/Panarchy) than a traditional hierarchy, and not be incompatible with anarchist theories. Cryptostates may provide the means for an orderly transition to an idealized voluntaryist world by adopting and then modifying existing institutions.

A cryptostate federation

To aid in the development of the cryptostate movement while not impeding freedom of choice for cryptostate citizens, cryptostates may choose to belong to a cryptostate federation. The point of such a federation would be solely to promote the cryptostate movement, and not the interfere in any individual cryptostate's affairs. It might do things such as provide for legal fees and support for those who ever run into legal problems with traditional states due to their involvement with cryptostates, support the jurisdiction of cryptostates above traditional states, and other such similar things. Cryptostates might also contract and create treaties in more traditional ways.

I hope by now I've convinced somebody out there that this is a worthwhile subject of speculation. I'm sure it's not a wholly original idea but I couldn't find any discussion on it. The above represents simply some of my preliminary thoughts upon the issue.  Any thoughts?

Edit: If you're interested in the above idea at all, you should take a look at https://www.reddit.com/r/bitlaw which seems to be the project that's furthest along toward accomplishing something like this.

Interesting proposal

We are already doing something similar, with the same goal: To be an autonomos descentralized "state" (or no state, most of us, dont like this word...)
We called our project Cooperativa Integral Catalana:  http://cooperativa.cat/en/
and we are aout 2000 members

And our ideas Integral Revolution:  http://integrarevolucio.net/en/

Could be interesting to think in integrate the better of this cryptstate ideas, with what we are already doing.

We are already involved in the cryptocurrencies world
- Collaborating in some projects like dark wallet
- hosted on thursday the first local meeeting of bitcoin in Barcelona
- projecting a local marketplace accepting cryptocurrencies bu january 2014.

Anyway we are working and growing fast, and i think that about 2016 we will be completarly autonomous..

Those are interesting links, but I have a few points of contention.

I find it highly unlikely that a democratic model will be able to overcome the institutional momentum possessed by existing structures. The failures of democracy from an informational standpoint have been well-studied. Only an alternative political structure employing a superior decision making mechanism is likely to flourish.

In addition, I doubt that the masses will ever be converted over to alternative political structures unless analogy is made to the ones that already exist. Bitcoin is easily understood since it's the same old concept of money but in a different medium. If you tried to tell people that it wasn't money but a revolutionary value transfer matrix or something like that then they'd probably be confused. "State" is similarly the best word to use to describe cryptostates even if their character is intended to be vastly different than traditional states.

I also find it highly interesting that a group that claims to be against capitalism and private property is interested in Bitcoin. Care to explain?

I've thought about this question for a long time now.

The problems arise from not knowing what people know, what they are aware of, How things work; Getting their attention on important matters, subject voting parameters, and even actionable items and work assignments.

These problems begin to arise but cryptography can definitely solve a lot of this.

Cryptographically protected identities with voting privileges and reputation can solve voting problems; It is very easy to add encrypted additional data to verify peoples right ot vote in a certain jurisdiction or in certain matters. For example: There would be restrictions on what can be voted on by the public, if you don't know what your being told... should we let you vote? Are you voting for a village in Zimbabwe to build their water works even though your from Cincinnati? How much weight should technical aspects of a problem be valuated vs the general communities finances? Of course someone would have to set those parameters for voting and hope they were proper.

Other aspects are what do people know, If you vote for something should people see what percentage of voters have passed the subject knowledge test? or the more interesting parameter what do people believe? trust? wish to see? or hold to be true? This census information can guide the decision making process in a decentralized government where people can get the chance to agree or disagree, even counter a proposal with their own in full view of the public with reputation/knowledge information to prove their worthiness to propose their solution to the public; All relative information in an easy to get, least clicks manner to inform people.

We can do it now. but no one has built it yet.

It requires Bitmessage, Using Keccak cryptography, BitTorrent, Namecoin and obviously Bitcoin, gotta pay wages for people to do the work required.

Creating the voting rights? now that is a question for the community and still have to create a secure platform to gauge peoples understanding of all subjects, whether openly upheld as true or being part of the deep fringe: If you can't understand it, should you be talking about it? POW to prove propositions strengths... or just plain chance of success.

Creating consensus among the masses is easy with the blockchain, it's the fine tuning that requires work.

So how do we build it? getting started is the only thing stopping this proposal for a new world order to rise.

Sounds ripe for a military take-over, set it up, and we'll knock it down and integrate your government into ours. We can really make use of your economy.  ;)

You should read Hanson's futarchy paper. It addresses most of what you're talking about. In a futarchy, individuals are financially incentivized to be right and financially penalized for being wrong. Individuals who are consistently wrong quickly lose all of their money and are kicked out of the market, their incorrect information neutralized. In practice, most of the money in these markets would likely flow to firms created specifically to invest in them, who would make sure that they employ experts in every field. It is a system of governance that naturally selects the best information. The only (possibly) democratic part is the welfare metric, which you can think of as the scoring method. If you pick the correct scoring method, and give the players a strong incentive to win the game (money), then you will always get the result you want.

In your hypothetical example of wells in a village in Zimbabwe, a good welfare metric would be the satisfaction of the Zimbabweans in the village. In that case it wouldn't matter if you had people in Cincinnati or Zurich deciding the issue because they would be financially rewarded or penalized based on the needs of the local residents. It's a system that uses the profit motivation for social purposes. Of course this isn't the only form that a cryptostate could take but it would definitely be a good route to try.


Gradualism is the key. A cryptostate would not even start out with any physical territory to be taken over. The best strategy would be for cryptostates (in general) to gain a reasonable political mass before even trying to expand into the physical world at all, and even then only in small steps.

Sounds like you are trying to cultivate a bunch of sovereign citizens and anarchists, you are only inviting chaos that will devour itself. It would be a complete disaster.

I don't see how a little competition for existing states would bring chaos and disaster, especially since it would only be confined to the digital world at first. At best, cryptostates become organically popular enough to spread into the real world and improve society. At worst, they become an alternative online dispute resolution system. Your arguments sound exactly like the ones made against Bitcoin.

with a state full of individuals all with their own ideas and doing what they want, it will be ripped apart from the inside, not the outside. It will quickly separate into factions rivaling each other for control, lawlessness from the lack of law...it would be out of control.

I don't know where you got the idea that they would all be doing what they want. I outlined multiple mechanisms of punishment for law violators.

I was thinking about it in a different way, the knowledge system is just degrees in an online education system, it would be a blockchain of all known knowledge and you are allowed to be graded according to that subject matter... even if it would be a small villages general local consensus, understanding it as part of a course in becoming in sync with that local group to be allowed to vote as part of them.

Of course the power of escalation is always necessary, I envision people voluntarily trained to have strategic battlefield knowledge at every level... maybe even an openwarfare education system... every citizen knows how to defend what they hold dear reacting as individuals collectively strategizing and adapting to each others battlefield awareness. Enhances perception system to identify data for all citizens.

Basically we need a highly aware population or subgroups organized in specializations in key areas, a Highly educated population, A super connected civilizations: you can talk to anyone anywhere and be updated about anything you specify any way you want... I think it's possible now just need a better interface.

So how would be go about identifying key information for each individual? We would show them a web of knowledge and let them complete the web with suggestions on which courses to take for a specific outcome... any imbalances in the system would be advertised to be filled as highly desirable sectors to be aware of.

The question of law enforcement is always a difficult one, there are always people who never play by the rules. How do you prevent negative actions from taking place? Punishment? You are allowed to be free, but incur a penalty for misuse of freedom of action? I'm sure there is something better than this. How does a collective agree what is not to be tolerated? People would need to be clearly informed I think, about the positive aspects of a specific course of action; More of the Huxley model of social control, all carrot no stick, allow people to express themselves and provide every avenue for a satisfactory life. The negative aspects of a culture can be engineered around with enough data, information, and in a fully automated civilization it is possible; All shares go to the people that invest in key Decentralized Automated Corporations, all operational expenses and future capital growth projections would be saved for the next business cycle of a DAC.

the futarchy idea is sound, good choices based wealth, but I don't quite like the need for punishment. Our growth would be focused in a different way if no one had to work anymore just be informed about the world and make good choices... negative actors offenses would simply be inconsequential but for the most heinous acts(being robbed is impossible, being murdered is improbable... maybe in the future with HUD based contact lenses it would be possible to simply negate all negative actions by making them public, much like cameras do now or just guide each individuals mental state toward their desired awareness(pre-programmed A.I assitants to identify psychological disturbances in people or some other form of perception enhancement)

With maximum awareness of all the data in the world at your fingertips, custom filtered for your wants and needs we could establish safe zones that would simply pop up on your phone or HUD telling you where to avoid because of past criminal activities or inform you how to deal with it if you have to live in the zone, or even embrace it, if that is what you want.

You've mostly lost me. I don't see the relevance.

Our model is not a "democratic model" as you say. Our decision making process is something in evolution and can dinamically be adapted to a a new events. For instance, if we make an evolution that makes less posible our current system we will improve it.

Our project is not for the masses. At least not in the short orr middle term. Also is not a system to be monopolystic in a territory. I thint tkat with a crytostate is the same: freedom to chosse the money. Freedom to be part of a system...

About the question "why are we interested in bitcoin already discussed in this topic: https://bitcointalk.org/index.php?topic=295923.0

A Futarchy requires metrics, information, data, how do we get that data? Now my assumption is that the leaders of the land are the people; The people need to be informed. We are able to predict all data collectively, I'm simply voicing the idea of ideological and intellectual growth as a metric to pick the best decisions.

If we know how informed the people are on a subject that they are voting on, the leaders can decide to run informational campaigns to increase awareness of certain subjects, for better outcomes.

The over all metrics for voting with subject matter awareness can make decision making and future planning easier; The data is also publicly available so everyone can participate putting their own motions and ideas forward for leaders to consider.

But my ultimate vision is creating a society that is run in a decentralized manner where government has taken a radical change, it still exists but is composed just as it is today with a voluntary work force, except you've freely been given the knowledge to do the duties of a firefighter, peace officer, soldier or diplomat; Do the duties with trust as your fellow citizens would like and you will be rewarded; Anyone can join at any given time, but must complete the duties assigned in a dynamically structured civic duty roster to gain their pay and responsibility.

Predicting future trends can be a lot easier if people are actively participating in the development and direction of their society, besides if their active and feel welcome in participating in society social change can be undertaken with better and faster results; No more blockades stopping equipment from going where its needed, those people will be happily suggesting alternatives or putting efforts openly to fix the problem at the engineering point in a fully open society, because they know where the efforts are at developing solutions.

It a way i'm describing what we have now... just being able to know how much voters know. The blockchain concept that underlies the cryptocurrencies used for verified voting, bill submissions by verified citizens, accurate data freely available and unchanged from the original source verified... we know now if someone is trying to fool us with digital trickery... the blockchain security hash of the data will tell us the truth. Someone here on the forum suggested blockchain verified passports....

Cryptography can really change a society, when you can verify what you know, know who knows and who needs to know with all the authentic data that is available, a cryptostate as a decentralized entity that can cohesively act as a swarm is pretty impressive... not possible without cryptography, before you could never be sure if that certificate on that doctors wall is real or not... how do you know? how can you easily verify? I've heard of a few cases of people with fake credentials working for years, or how about moving from one country to another? Can they even accept your credentials? Cryptography fixes that, they know exactly what you've studied and what you are capable of... transferrable skills to any place in the world at any moment... I think that feels like freedom.

I wrote about this a few months back, but it would be nice to carry all your medical records in a verifiable and easily accessible way that only you and your doctor could release. A blockchain solution with encryption values and security hashes. If you need to be booked for a doctors appointment it's done, the blockchain gets updated all the time, the doctor would see it immediately and be booked automatically. All doctors would simply sign in for updates and see what they are assigned, with security releases and awareness of all other doctors who have seen the patients file with contact information. Need paramedics to check your medical history? sign in to the blockchain server get the relevant patient data from the medical tattoo, verified and authenticated. It would not matter where in the world you went, they would know you as your family doctor would.

It would be interesting to develop a distributed anonymous voting system similar to Bitcoin.  Double majority voting system with a minimum turnout. Every "citizen" could vote Yes / No or simply abstain. Votes could all be verified publicly on the votechain with no chance of tampering. Maybe the miners would be the ones who would introduce the new legislation to be voted on. In this manner one could do away with the need for representative politicians entirely. A 'true' democracy backed by crypto.

The hard part of course is getting recognized and the land somewhere to set it up.

If you wait for them to recognize your claim to some land somewhere then you're going to be waiting forever. The idea of a cryptostate avoids the need to wait. The idea is to spread like a virus, not a weed.


All of my proposed welfare metrics are endogenous to the system itself (not requiring any external data source).


Futarchy actually requires "the people" to be much less "informed" than other government systems (not that it's good to be ignorant). There will never be a world where everybody is perfectly informed and rational. Futarchy allows us to consider the preferences of less informed people while nullifying the effect of their bad information.


In the long run, cryptostates will likely lead to a further decentralization of politics culminating in a sort of system of polycentric law. But that's in the long run. People won't sign on now if you make it too different from what they already understand.


It sounds interesting, but too vague for most people.

A decentralized formation could be more advantageous, multiple eyes and ears with actionable power located across the globe. Able to vote for the cryptostate in local politics for best outcomes of your crypto association.

It could be a subset of society, where we receive the rights and protections of the state but also the benefits of being part of the cryptostate. As part of the cryptostate, you do voluntary duties for group benefits or just pay a percentage for consolidated social protection: legal aid, medical assistance,  social support; Place your cryptocitizen request on the civichain and receive assitance from the rest of the community which you can update later to show other citizens that your request has been filled accordingly.
As time progresses and the community size increases more services can be provided for the citizenship.

This is definitely closer to the idea, though in the long run the hope would be to enroll as many people as possible, not exist as some sort of secret society. Putting cryptostate-friendly politicians in traditional states is not a good addition to the concept.

Cryptocracy - When the currency is created by the people.

That's all we need really. Everything else will follow suit, just watch.

I think things will move fast from now on.

Nice to see this being talked about.

In the Franko Collective we use our resource for voting. For instance, when we decided to pay people for folding@home. Someone proposed the idea, said it would take X amount of FRK and that would sustain the pool for Y amount of time. Everyone in the collective voted with their wallets. So the system is already in place for voting.

The term "cryptostate" is needlessly provocative and likely to push all the wrong buttons with those who see themselves as defenders of traditional nation-states or societies. It were better if a more neutral term such as "crypto-club" or "crypto-assembly" could be used--it would have no practical implications as far as the internal functioning of the construct is concerned.

I agree. Also crypto-assembly sounds cooler.

I've been working on a little project around the same concept.  Will hopefully be posting more on that as it develops.  I've seen the topic come up here a few times before, but it's never really gained traction.  Hopefully people will become more open to the concept of decentralisation in governance as more and more corruption seeps in to our current centralised one.

Could you post a link to the project? This sounds awesome.

It's nearly ready.  About 95% done.  Just needs some final tweaks and cross-browser testing before it's ready for launch.  I don't want to overhype it, though, as there's no actual cryptography involved.  It's more about spreading the message than the practical implementation at the moment.  Although that could potentially change with the right people involved.

What language is it written in?

It's just a website in effect, plain old XHTML.  Nothing fancy.  It expands upon the concept of how decentalisation will be a cornerstone of future governance because our current top-down, centralised system is so prone to failures, abuses and scandals.

Nice! Can't wait to see it when you release this.

Hit a bit of a snag with DNS issues, hope to have it sorted soon.

//EDIT:  Done!  Please get involved if you're interested:   https://bitcointalk.org/index.php?topic=420451.0

The following might be of interest to some individuals in this thread:

Project Bypass: Decentralised Direct Democracy

https://bitcointalk.org/index.php?topic=423585 (https://bitcointalk.org/index.php?topic=423585)

I completely disagree. Anything less than the word "cryptostate" fails to convey the potential importance of the idea. A "crypto-club" sounds like something for nerdy boy scouts. The powers that be won't like anything that challenges their authority and you won't get around that by using a thesaurus.


Democracy is a flawed system. Consider futarchy. If you look at the average level of discourse on the Internet you'll realize the inherent failure of any sort of e-democracy.

There may be plenty of disagreements, but that doesn't mean it can't work.  Wikipedia is effectively e-democracy in action and that functions well enough, although it still needs moderators to ensure that, so it's not 100% perfect.  But I'm sure one day that's the kind of direction we'll be heading in.

Democracy can function but that hardly makes it the best system. Dictatorships can function too. Wikipedia is explicitly not a democracy, per https://en.wikipedia.org/wiki/Wikipedia:NOT. It is most accurately a meritocracy.

The flaws of traditional democracies are immediately obvious. Democracy treats every opinion as being equal, but we know that this doesn't reflect reality. Some opinions are objectively more informed or intelligent than others in that they objectively lead to better results (a higher GDP or longer life expectancy for example) when heeded. Futarchy corrects this imbalance of knowledge by making people financially accountable for whether or not their opinions actually turn out to be correct or not. Futarchy is to democracy as capitalism is to communism. Democracy is a communism of knowledge that promotes the equality of every piece of information in spite of the blatant falseness of this premise.

Keep in mind that this system doesn't entirely disregard opinion. It retains a traditional system of voting for determining what people want. It simply implements a superior form of decision making to find out what we should actually do to then get those things.

Think of it this way. The choice of whether to play hockey, basketball, or baseball is a subjective decision. You cannot objectively say that one game is better than the other, and voting is a fair way to determine the issue. But once you've chosen which game to play, winning becomes a matter of fact and not opinion. One strategy will be objectively superior at winning the game. Similarly, what issues (health, wealth, happiness, a mix of the three, or something else entirely) society chooses to prioritize is a matter of opinion, but what plan will actually get the best results in those areas is a matter of fact. Futarchy does what traditional democracy fails to in separating these functions.

In that sense it's actually more democratic than traditional democracy. People vote for what they want in an abstract sense (like less unemployment) and then the best plan for getting that is formulated automatically for them, eliminating the inevitable fact that in a traditional democracy people rarely get what they want because the details of how to actually implement things are too complex for people to reasonably understand. Can the average citizen really be expected to be an expert on politics, economics, the environment, and everything else they vote on? Futarchy eliminates that requirement while still allowing for everyone's preferences to be considered.

I suggest you read the original paper linked in the original post. It will explain more thoroughly.

These are some good ideas and my thread compliments this one.
https://bitcointalk.org/index.php?topic=483866.msg5326024#msg5326024

The problem with most states as we know them is that they aren't very good at certain things. For example providing social programs or basic income is something the traditional states suck at. A cryptostate or decentralized autonomous community would be better at this because there would not be a need to have a debate in congress, there would not be a need to overcome political barriers, it's just a matter of writing the code and then people who agree with having a basic income exist would use the cryptocurrency and join the community which enables it.

Only problem as I see it is, assuming this is a voluntary association, the society which does not have basic income is the society in which business flocks to (thereby making basic income unnecessary.)  As the people of crypto A, who do believe in a basic income, realize they're no longer generating enough revenue to pay for everyone to live, they're faced with two options: adopt the philosophy of the people of crypto B, or find a way to take their wealth in some fashion or another, the latter case being involuntary and back to step one of coercive states.

But it's certainly an improvement, I think, assuming no violence is involved.  What bitcoin is now is probably the perfect crypto for me, but I would be interested in seeing people making the basic-income crypto work.  I imagine you would need to prove every individual's identity, which requires some kind of central database, to ensure nobody receives double+ income while others receive half-.  You'd need to figure out who owns this database and how it can best be secured; who pays for the people who secure it.  Or find some other means to prove an individual is real.  Perhaps the cost can be directly removed from every transfer to a central wallet, i.e. what Freicoin does, as a fee for making the crypto function (I almost made the mistake of calling it a tax but realized usage is voluntary.)  I think these costs further push business away, but that's just my prediction; maybe it is the best way to go at it.

You're assuming that business is a centralized unified group consciousness that will logically flock to something it's not programmed to flock to. Businesses are machines which can be programmed to have basic income built into their DNA. Employees are humans/robots or software agents running on decentralized autonomous corporations.

If the business is a DAC and the employees are robots then the shareholders get dividends and that is basic income. There is no need for any central control and that means there is no need for a central government but there is a need for a decentralized governing process. Government becomes a process and the law becomes the source code/math.

You're telling me that the owners of the DAC would prefer not to receive the dividend? Businesses exist only to provide value to the community, society, and to bring profit to their shareholders. So all you have to do to provide a basic dividend is make every member of the community a shareholder. You don't need government or permission to have basic income you just need the production capacity and to write the necessary software.

" I imagine you would need to prove every individual's identity, which requires some kind of central database, to ensure nobody receives double+ income while others receive half-. "

You don't need a central database. That is like saying to exchange money you need a centralized exchange and government issuer. You can easily have an encrypted decentralized database DAC. Ethereum would easily allow for it in the form of a contract which would only be several lines of code in fact.

" You'd need to figure out who owns this database and how it can best be secured"

No one owns it. The database would be based on blockchain technology, and a decentralized encrypted Bittorrent style private cloud. Encrypt and store it in such a way that only the users themselves can determine who can access their identity or any other data they store in their private cloud.

None of it must be centralized. No one should own the database. The community itself would host the database via nodes just as the community hosts the Bitcoin blockchain. The community itself would own shares in itself. These would not be traditional businesses we are talking about here but DACs which seek to maximize both automation and profits for the community of shareholders.

"I think these costs further push business away, but that's just my prediction; maybe it is the best way to go at it."


You haven't shown an additional cost. Businesses already pay dividends to shareholders. Under my proposal businesses would operate even more efficiently because they would be DACs and these DACs would pay shareholders. The only difference would be that the shares would be distributed to the members of a community.

So if I started a business that is a DAC I could program the DAC to give 20% of it's shares back to my community. In a few lines of code my community would have basic income and if every member of a community who starts a DAC gives back 20% in order to remain a member or citizen of their community then basic income is achieved easily without any tax.

The only reason it wouldn't work is if people are so greedy that they don't want a community. Human nature has shown otherwise that human beings do care about their community even if they don't care about the government.
 
Because DAC shares are capital assets which pay dividends their value would appreciate over time as automation makes business more efficient. The end result of this process (if you believe in the technological singularity or similar theories) is that eventually a DAC will come along which is so efficient that it will remove poverty for the entire community.

"Only problem as I see it is, assuming this is a voluntary association, the society which does not have basic income is the society in which business flocks to (thereby making basic income unnecessary.)  As the people of crypto A, who do believe in a basic income, realize they're no longer generating enough revenue to pay for everyone to live, they're faced with two options: adopt the philosophy of the people of crypto B, or find a way to take their wealth in some fashion or another, the latter case being involuntary and back to step one of coercive states."

This is a somewhat valid argument but it will not hold weight long term as automaton becomes more advanced and technological unemployment kicks in. The only reason people cannot generate enough to live is because of artificial scarcity. That does not exist in deflationary economies where the cost of living decreases with time.

Automation and artificial intelligence will dramatically increase efficiency of production whether it be food, home construction, or more complicated things. A 3d printer today can print homes so what would stop a community from creating a home maker DAC based around 3d printing technology in the future?

The fact that it's a DAC automatically will make it far more efficient than the brick and mortar corporations which will not be able to compete. The cost of housing will dramatically decrease every year, the cost of everything could dramatically decrease at the rate of Moore's law. I speculate the reason it isn't decreasing is because of the inflationary monetary policies which prolong artificial scarcity by increasing the cost of living despite the fact that technology is decreasing the cost of labor. Policies like the minimum wage may actually exacerbate dead weight loss and also contribute to the prolonging of artificial scarcity so the sooner we remove the minimum wage and replace it with basic income the better.

If you have the technology to eliminate poverty, build more homes which are cheaper and more energy efficient, 3d print nearly any physical object, why not do that and pass the dividend to the community of like minded people?

This is an important point. The economy as a whole, beyond even just currencies, is in a time of transition and traditional states with their hegemonic ties to the existing paradigm aren't going to help us through it. Alternative institutions are needed.

Glad I discovered this old topic. Certainly makes me think.

If anybody is still interested in this topic, they should check out Bitlaw at https://www.reddit.com/r/bitlaw which seems to be doing something similar to this.