Are cryptocurrencies a reliable tool for micronations?
Dernière mise à jour : 28 oct. 2022
As Liberland did with bitcoin when it was created, several micronations are studying the creation, recognition and use of cryptocurrencies. We took an interest in this financial tool to try to assess its compatibility with micronations.
Today, several micronations would be tempted to follow the example of Liberland, a micronation yet sidelined by the micronational community for questionable facts, such as offering the sale of their passports to migrants seeking asylum. .
In November 2021, the Liberland Aid Foundation presented the Salvadoran National Children's Hospital Benjamin Bloom with a donation of more than one bitcoin (equivalent to €27,203 / US$29,157).
Under this gesture of charity and great generosity, Liberland displayed its financial wealth here at the right time and in the right country. Indeed, it was on the occasion of the Lightning Adopting Bitcoin summit which took place at the time in El Salvador.
President Vít Jedlička and his delegation had gone there by presenting their Liberland passports which were stamped by the officers of El Salvador when they crossed the country's border.
According to Joey Langenbrunner, one of Liberland's delegates to this summit, a sovereign country such as theirs has difficulty opening an official bank account. With the adoption of bitcoin, this difficulty was circumvented, allowing Liberland to acquire most of its treasure.
The purpose of the operation is to welcome as many Bitcoiners as possible within Liberland with a view to becoming a cyber-currency power. This is what we can consider by reading the conclusion of the article by our colleagues from Cointribune, we quote them:
“The adoption of bitcoin (BTC) has allowed the Free Republic of Liberland to achieve various projects and get to where it is today. Bitcoiners need a state they can call home "The demand in the market is quite large. Therefore, ownership of territory becomes insurance against external forces. Liberland dreams of building Alexandrian cities for bitcoiners."
The problem in this story is that a micronation is not a state strictly speaking. The virtual has its limits and money does not like chance. This is why bankers are always much richer than poker players. As the story of the 3 little pigs reminds us, the straw house is the first to be completely blown up by the wolf, although it was the fastest to build.
Is it therefore wise for other micronations to invest in crypto-currencies and build their fortunes on this source of income?
Prince Jean-Pierre IV d'Aigues-Mortes is a senior executive in one of the main French banks, we asked him this question and here is his analysis:
“ Crypto-currencies were originally planned to be decentralized and unregulated currencies by banks and all their legal arsenal. At the beginning of their creation and especially in dictatorships, there was the intention to thwart the monitoring systems to carry out certain questionable transactions requiring the utmost discretion.
The idea at the start was therefore to obtain absolute freedom of transaction. This of course implies money laundering, tax evasion and corruption. It then became obvious to states that cryptocurrencies favored the circulation of "dirty money". A micronation embarking on this path will therefore be seen as a possible laundering organization by the states which will not reserve friendly treatment for it. "
"A report by the Federal Trade Commission (USA) estimated the losses as a result of embezzlement at $1 billion."
But this is only a first point for the Monarque Aigues-Mortais who further explains:
"Transactions are made via Block chain technology, it is an extremely complex technology but not totally secure since there is an increased number of cryptocurrency falsifications these days. In 2021, A report by the Federal Trade Commission (USA ) has estimated the losses due to embezzlement at $1 billion. For a micronation, it is therefore practically impossible to have the technical knowledge and tools to set up its cryptocurrency while having no guarantee that it will not be used for embezzlement."
He finally ends with a last important point:
" The carbon footprint of cryptocurrencies is an environmental disaster because blockchain technology is extremely energy-intensive. If we add up all the global energy consumed by cryptocurrencies in 2022, this sum is equivalent to the 26th rank of the most electricity-consuming country in the world. To better illustrate this, if I take the example of bitcoin, this cryptocurrency has an electricity consumption equivalent to that of Sweden or Argentina. For micronations that act in the fight against global warming, using a cryptocurrency would be a great absurdity".
With this more detailed analysis, the economic development of a micronation for a cryptocurrency seems to be a pure utopia, but above all, a risk and a harmful contribution to the environment. Isn't the primary purpose of a micronation to imagine a better world or society in the end?