TFTC: A Bitcoin Podcast - #267: Free private cities, economic zones, and gradual progress with Rahim Taghizadegan

Episode Date: August 30, 2021

Join Marty as he sits down with Rahim Taghizadegan, President of Free Private Cities, to discuss: - Citadels - Creating free private cities - How economic zones work - Examples of successful free private cities - How to get started - Where are free cities most likely to pop up? - much more Follow Rahim on Twitter Check out Free Private Cities Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app. Lend at Hodl Hodl is a new non-custodial bitcoin backed lending platform, that allows peer to peer lending and borrowing between users, globally, anonymously & on your own terms. Create you offers & set your own terms on lend.hodlhodl.com Compass Mining. Compass wants to democratize bitcoins hashrate and give everyone the ability to strengthen the network while mining bitcoin profitably. Thanks to Compass, it’s never been easier to mine bitcoin. Check them out at compassmining.io Braiins. Braiins are leaders in the mining industry; running Slush Pool, creating firmware to make miners more profitable (Braiins OS+), and building out Stratum V2 to help further decentralize mining and make Bitcoin more robust. Check out their mining profitability calculator.

What's up, freaks? It's your boy Marty Band here to introduce this episode of Tales from the Crypt. The immense pleasure of sitting down with Raheem Taghazadegan, who is the president of the Free Private Cities project that is attempting to bring free private cities to individuals around the world. I love this conversation because it defines an actionable path via which we can get to more sovereign, autonomous cities that respect individuals and actually provide services

that amounts to the amount that the individuals are paying for those services. May sound a bit confusing the way I just described it. However, if you listen to the podcast, I think you're going to get it. You guys are going to love it. This was brought to you by our good friends

at the motherfucking Cash App. Cash App, so you stack sets, send sets, receive sets, and sell sets, if you so please we're saying sats sats sats sats sats because sats are the standard there's 100 million sats and one whole bitcoin you don't have to buy a whole bitcoin you want to buy a fraction of bitcoin you can stack whole sats instead cash app makes it extremely easy you can dca in the sats by daily weekly or bi-weekly you set it and forget it on top of that they have their boost program which allows you to get a personalized debit card that is accepted anywhere visa is

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order the court ordered restraining order and i have out on him he's not supposed to be within 500 yards of of your boy here and he was much closer than that it was very scary it felt threatened this was also brought to you by our good friends at huddle huddle huddle huddle is here to bring you freaks a lending platform and they're leveraging bitcoin's native properties to bring you this lending platform and they're doing it in a way that enables users to access it with no kyc no aml it's available to u.s clients too and the way they're this is possible is because they're leveraging bitcoin's native multi-sig properties to create a unique escrow account in which you hold one key or counter polar counter polar counter party holds another

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Go check them out. Go check out all these sponsors. Thank you to our sponsors. Thank you to you freaks for coming back. If you're liking the content, please like, subscribe, share, link, review, whatever it may take. It all goes a long way.

As the price of Bitcoin rises, we want to make sure people are getting quality Bitcoin content, so we appreciate when you send new freaks our way. Love all y'all. Enjoy this episode with Ricky. You've had a dynamic where money's become freer than free. When you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven.

I believe that in a world where central bankers are tripping over themselves to devalue their currency, bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be what is up freaks it's your boy marty bent here on a lovely tuesday morning sitting down for a podcast that's been rescheduled pushed back a week due to an emergency on my end i'm very happy to be sitting down it's raheem tag is that again uh president of free private cities a company that is attempting to bring what many Bitcoiners, I think, would deem as citadels to market. Is this how you would describe what free private cities is?

Yes, I mean, I like the citadel meme. A lot of people have different associations, maybe. But I think in the essence, that's what we try to do. It's a concept that's been around. Obviously, it's been popular amongst Bitcoiners for quite some time, like going and creating a private city where you pay for services and everything's very transparent. You know exactly what you're going to get.

You know the cost. You're buying services from a private company instead of paying taxes to leverage the state's monopoly on violence. Is that correct? Right. So we are not constructing castles, just to be sure.

We are trying to find refuges in the world of today. So I'd rather have free communities that are based on the values of the people that join voluntarily into these communities. And I think that's basically what the Citadel meme is about, is finding a refuge in a crazy world and some alternative institutions or building alternative institutions

in the field of living together, cooperating. And I think that's the essence of Bitcoin, having an alternative infrastructure of cooperation. And I think that would be the best sense of the Citadel meme. And that's what we're trying to do, right? Yeah, so let's jump into the first principles of why a free private city would be preferable to something like living in a city and paying taxes and depending on the state to provide services for you. So the argument is that the state, again, you pay taxes and you're able to be protected by their monopoly on violence to an extent. How does a free private city compete directly with the state?

I'd say it's a more neutral and pragmatic argument. It's not really about the end result, and it's not so much opposition to state and governments, but opposition to them being monopolies and cartels. And so the most pragmatic argument is about lack of innovation. And we've seen in many fields what lack of innovation will do. You will have entrenched parties just fulfilling their or satisfying their hidden interests, hidden behind some legitimacy. So we think innovation can bring a lot of benefit to the field of people living together. And it's mainly an infrastructure question as well. It's what's the best infrastructure for people to live together?

And more important than living together is cooperating in the field. And I think we've seen lots of development in the field where innovation could operate in the digital sphere and technology. And so we expect to see a diversity of results in that sphere once we open it up. And we don't want to make an ideological argument there. It's really we build up on what has been tried and what is underestimated in its impact already. So there's been a lot of tremendous positive change already in our world. and it started with special economic zones. And there are a few people know that there are already thousands of them

all around the globe. And they've been tremendously important in shifting Asia and shifting Asian people out of poverty. And we think that the potential hasn't been fulfilled yet because it's mainly focused on bringing quick material progress, but not really the kind of innovation that's necessary in the basic infrastructure of corporations. So there's a lot of top-down, even North Korea has a special economic zone, but of course they wouldn't want to have their model challenged. So it's just a ploy to attract

investors. And we think that much more can be done on that basis. And more important, that special economic zones were even special administrative zones like Hong Kong and Shenzhen. And then basically, that was the example of Singapore as well as a hub that led to China opening up, unfortunately, mostly in a top-down manner. But already, the impact is tremendous on the world and on global wealth. So let's further define these special economic zones and how you plan to build on them. Obviously, you mentioned North Korea has one. So how do they vary from location to location? what are sort of the first principles behind their reason for being most special economic

zones are really like free ports so the offer beneficial customs regimes zero customs lower taxes up to zero taxes subsidies sometimes so it's an effort to somehow have zones where you can attract industry and you can attract investors but what we figured out most of those special economic zones aren't really working that well because it's not enough to just offer lower taxes if investors don't have the long-term trust and the stability and the arrangements and if it's not attractive for people really to settle down and work on long-term projects then that tends to be a short-term benefit where it just draws from the surrounding areas and companies that are already there just relocate but to attract more capital and more innovation new technology

to these places you really need something more and that something more is legal autonomy in a certain sense so you have legal innovation and some places on the planet have realized that It's the Emirates, for example. Of course, none of those are shining examples of a utopia, but they are examples of what has been possible and what the result has been. And that's been tremendous. It means going within one generation from a poor fishing village to a global hub with modern levels of wealth and technology, if you're able to afford it, of course, while living there. And what the Emirates did was following a bit the example of Singapore and Hong Kong, where you have a mix of more British-inspired common law, civil law, commercial law settings. So there's no Sharia in those free ports in the Emirates, but you have the kind of commercial law that's been established over centuries and makes it easier and have an easy framework for even expats and foreign investors to trust that the location is a good location to build long-term businesses. So a few places have been up front in the development, and we think it's still not enough. We think there's much more innovation possible.

And so it's not a utopian scheme in any ways, trying to learn from what has been tried, what the results have been and how to improve upon that. And we're seeing a lot of progress in that area only within the last 10 years. And the progress is increasing and speeding up rapidly over the last years. So a couple of things. So one, the progress that can be made on what's been done to date is better aligning incentives and trying to get stakeholders to have a long-term stake in the success of these free private cities, correct? Yes, that's part of that. and what's possible within the structure of sovereign nation states that we have nowadays.

And so it's building up on the special administrative zones and then have a better incentive alignment, better structure and more space for innovation there. And already, I mean, the first projects in place that use a new legal regime or that grants more legal autonomy than even the Emirates is in Honduras. It's a CD project, still not perfect, but progress on the way.

And we already have a few special administrative zones operating there on the ground. And what we try to do with the foundation is bring those examples to other places, have them work as role models and with any new trial, more or less, to improve and learn from the past experiences. And so right now there are negotiations with governments out there to have that kind of autonomy. And it's not a secession kind of autonomy. It's really improving up on special economic zones. So it's governments who are thinking about having special economic zones are realizing more or less that they are not the first ones to think about that. And they have a hard time attracting investors. So usually it's developing countries or countries which still have most of their potential in the future, to put it in a positive way.

And there is quite some openness. And the more practical examples there are, the more openness there will be to distinguish yourself as a country, as a location for this kind of long-term investment that brings the most benefit to the surrounding population. And there you see that the difference is not just you don't just have wealth relocated to there, but you have wealth emanating from those special administrative zones that are working well. And we've seen the example in Singapore, in Hong Kong. We see the example in the micronations of Europe, like Monaco. If you look around those destinations, you see there are like belts of wealth around them. So it's not that they are drawing from the regions. They are bringing more wealth to the region.

so it's a win-win solution for the host country as well and for the population there yeah it seems like it's got to be a tough conversation with the government like hey we need you to to back up and it's interesting that you can have these conversations in the first place and sort of come to the table and and try to create these zones what are they like and like you said obviously the government's incentivized because it brings wealth it brings capital and then most importantly towards the end there you said wealth begins to emanate from these zones which is it's all very pragmatic so it's not all ideological and it's not arguing about governments and how bad they are it's uh it's really a pragmatic conversation and it comes from the field of

mining i'd say that's the most closely related one and it's also the reason why the entrepreneur who started the foundation that i'm heading now titus gable is a german mining entrepreneur so So he knew the field of in mining, you need long term leases from governments. And of course, the reasons are very pragmatic. They need foreign capital because it takes a lot of investment to bring resources, extract resources and bring them to the market. And it needs a very long term view in order to be profitable. So you try to have a matchmaking for pragmatic reasons to bring wealth to a country, which if you have resources, usually it means poverty. so it's really a hard space but some countries figure it out and of course a lot of mistakes

are repeated but not every single mistake is repeated in every single place so as the world is becoming more diverse the chances are opening up for governments to learn from mistakes in the past and to learn from success models and role models from the past and try to for pragmatic regions find the best solution for their places but for now it's it's usually because they've exhausted a lot of other options so of course it's poorer countries that are the first and way it's easiest to have the kind of pragmatic conversation yeah so you've mentioned emirates singapore outside of those countries where do you see this beginning to pop up and then how does it uh how does it affect like um american how does it affect like the united states like do

you think it's not the singapore of today or the emirates of today there was a role model of what's possible within the generation so it's singapore and the emirates back then when they were poor fishing villages uh more or less uh and where no one would have imagined how fast wealth can be attracted and it was a similar reason i'd say it's you become a global hub of cooperation of investment by offering a legal structure that is marginally better than what's surrounding yourself and so it's a very pragmatic structure it's mainly based on commercial law and usually the negotiations with host countries are not about criminal law are not about like residency and sovereignty anything uh triggering ideas of sovereignty uh it's it's mainly about having

places where you have independent uh juries you have independent courts as well and where in our model you have an operating company which has skin in the game which is really kind of management where people put in the investment for the infrastructure necessary and reap the benefit of fees and mostly real estate increase of value in real estate and we've seen a lot of urban development successful urban developments are have the best incentives in line if the benefit from the increase in value of real estate and that's what we try to bring together here so you don't necessarily need tax funding or debt funding to a large extent we believe that it's possible build on private equity to really build the cities of the future and no one of us has a crystal ball

knows what the city of the future in 20 years and 50 years will look like so it's best to have this entrepreneurial approach of trying things and whatever works scale it up use it as a model as a prototype and that's the approach we have to that so every new project will have its own operating company and we'll and that's one of the most important things we'll need to have contractual arrangements with all the settlers which are transparent which are agreed upon in advance and which state clearly your rights and obligations and then it's a two-sided bilateral contractual agreement it's no top-down arrangement it's not like there's a government and then you are obliged to live under these arbitrary circumstances we've been used to be living

under but it's a contractual arrangement where you have a service provider and we think we we can pin down that a lot of governance in the positive sense is basically providing services to the population and we want to have this discipline of the market where if the services you are provided with are not at all what you've expected and the price is much higher than you expected to pay of course there's arbitration and that's built in in this mold that of course the operating company won't be the arbiter in any conflicts that arise so we can use there's already there's already something there's not a utopia there's a whole world of private arbitration between international companies that's used a lot and we can make use of that infrastructure that's

already there by of course stating in every contract that we use those international norms of arbitration there whenever there's a conflict arising so it's not this kind of top down whenever you have a conflict with government it's a government that decides who's at fault which of course are the worst incentives possible so is it fair to say or is it even makes sense to say you're replacing politicians with board members who are subject to the whims of the stakeholders in their private city and the courts associated with that i'd rather like to say replace them with entrepreneurs and investors yeah yeah board members i mean you have the association with large corporations and of course a lot of those corporations nowadays they live

in a very distorted field and it's of course it's a field of fiat finance that bitcoin tries to replace so it's not necessarily that kind of corporate structures that we try to emulate and where we are much more closely aligned with people in the bitcoin space i think it's really about alternative institutions, but not in a utopian way. It's about building, it's about having an offer and the choice that you can voluntarily refuse if it's not working out. But yeah, not just replicating what's there and not just having like shareholding companies that are finest in a traditional way. So most of the interest we're seeing in particular for investments and so on are aligned with the bitcoin space i'd say because it's the best precedence of

building an alternative institution that can be the infrastructure for corporation or international corporation that's a more leveraging natural law theory and in court systems as opposed to like a corporate structure that makes a lot more sense uh yeah and so how how did this these free private city start how big are they how do they grow um do you go in buy a bunch of land and if it's successful you're like all right we can chop this up later how does that work it's a whole diversity so there are two meanings to free private city one is a concept how you ideally go about it and of course that hasn't been realized in any place it's a gradual way so it's a really question what do you count as a free private city how close is it to the perfect model of course you're one side

of a negotiation with a sovereign country so hardly ever you have the perfect result but you have good enough result and the important thing is to have marginally better results and thus opening up the space and the second meaning of a free private city is just whatever alternative arrangement of living together is found and so we include intentional communities as well and it's a space that's growing a lot it's just people trying to figure out ways of living together in an alternative way and it's part of the Bitcoin Citadel space, it's part of the intentional community space, part of the special

economic zones space of private city foundations space and lots of people take different approaches so we're very open and neutral about that as a foundation we are not sure yet, we have a preference

for one approach which we call a free private city approach but there are other ways to go about that as well and a lot of people just start with the land they buy or own and start from there we think it's better to start with the legal framework and to figure out the best legal framework you can have and then bring in investment and then choose to buy a land so we usually work with options for land not having bought it beforehand but having options that you can then use to get the land once you have the legal framework in space that really allows for

innovation in governance and innovation in legal structure but there are very lots of different approaches out there and lots of initiatives so the industry is very lively at the moment and we see what works out best what is most advanced right now i'd say is the city laws in honduras they are not perfect because of course honduran government hasn't been perfect and it's one of the reasons why honduras is a space that really a place on the planet really needs foreign investment and really has issues with governance and governments but the city laws really allow for much more legal autonomy than any other special economic zones around there so it has a lot of potential and but it took 10 years to get there and still it's challenged and still of

Of course, you'll have opposition with a lot of misunderstanding of what those laws entail and a lot of nationalist propaganda, I call it, about giving land to gringos. And so on. You'll always have that once you have development somewhere. But already at least five serious contenders to zones like that, to special administrative zones like that, and already buildings on the ground and people moving there and so that's already a role model to follow we hope that the next installment in another country at another place will be even better than that but then of course

every place has its own unique selling proposition and Honduras is a great place for people in the U.S. the same time zone the island of Roatan where there are two or three of those zones it's a beautiful location a very safe location for honduras great diving and so on so of course you try to find attractive locations as well where it makes sense to have to where really more development could be possible it has been possible under the legal framework that was there before and with the level of the local level of corruption and problems that you have yeah that's awesome and like you said business is booming it seems like particularly over the last 18 months as more individuals are waking up to maybe federal government has a bit too much power

what is going on here are there other options are you finding that to be confirmed with what you guys are doing like people are just trying to be like all right i need i need an alternative to this definitely and it's mostly one point it's it's not wanting to live under arbitrary rules i mean you can have different opinions about the whole covid situations but what most freedom loving people really don't like that much is the arbitrariness about it and and really feeling so helpless because you never know what what will be or what will be allowed the next week from now and so that's really where where this model comes in as an alternative it's mostly removing that kind of unprofessional arbitrariness which isn't even in the interest of governance in in the long

term and having functional structures it's really mostly true politicians trying to save face and a lot of bad incentives and a lot of how to deal with uncertainty where politics is really bad at because their game is is faking certainty is faking that there's someone who knows best and better than you and who has a crystal ball more or less or uses science or experts which doesn't make any sense because they're the most dynamic fields and we know that from economics, but of course, the same applies to biology, and so on. There just isn't that kind of certainty. So you need more trial and error, you need more diversity. And you need people really trying to figure out and bearing the consequences of their choices. And that's why

I think it's crucially important, not because we think that we'll have the better solution for every problem up there. And not because we are better COVID experts than those employed by government so it's not really about that it's much more pragmatic it's it's uh that we don't want to live in a situation where it's one size fits all rules that will fail in the long run because there's not enough feedback there's not enough learning going on and and that's worse about politics as people even if they fail they don't bear any consequences and and usually it just means that they are allowed to fail more because the more they fail the more they legitimize their interventions and we've seen it in many fields we've seen it in education

in health in in foreign interventions military interventions which is more relevant for us than for europe but still it's the same kind of intervention spirals that we see everywhere it only seems to be getting more chaotic and it's it's gotten to a point of insanity like you said the arbitrariness the logical inconsistencies of everything and most importantly the complete misunderstanding by those in power that you cannot control very complex systems like global economies from a in a top-down fashion which is truly frightening uh when you consider the last 18 months i mean it's quite possibly i think it's easy to say that the centralized coordination that we've experienced in the last 18 months is probably the most coordination the

globe has ever seen at any scale at any point in history and you can't just turn a global economy it's not a light switch you can't turn it off and on and expect it to go back to normal the externalities that are going to emanate from the top-down decisions that were made over 2020 and 2021 are going to be written about in history books decades from now so it's never been as important as it is today to have more diversity in governments and trying to figure out better ways to deal with things and then finance as important as it is i think it takes second place to debt but we i think we take a lot of optimism from the bitcoin story and where it went and without that i don't think that there would be a free private city project because it brings to

people who are seeking alternative institutions and alternatives to what we are used to It brings this kind of optimism and that it's possible to build something and something may catch on and get a size where it becomes relevant and where there is no alternative becomes untrue and obviously untrue. And so I know it varies from location to location, economic zone to economic zone, but what are sort of the base services that the free private city model would recommend you start out when you're starting your own private city? the most important infrastructure is the legal infrastructure so having the trust that whenever there's a problem there's a conflict it's based on contracts and it's based on contractual law commercial law as you use it in the international sphere which means where it's not you're not evidently under a government but it's between or companies operating between nations so there's a lot of precedents there i think that's the most important infrastructure but then of course you'll

practical infrastructure and that depends on the location usually some of those and the more interesting ones are greenfield projects which means you have to bring kind of port infrastructure street infrastructure and then of course build based upon that with the kind of market-based urbanism which will be more independent for contractual residential areas where there's something to be learned from the gated communities industry but not in the sense that you have like giving communities within dysfunctional areas but you have contractual arrangements of people co-owning or having leases and there are all kinds of different arrangements which are already in place and which you don't have to i mean find new solutions to everything so we think you have like

people who are more closely aligned in certain preferences and then we think it's also part of of the legal infrastructure where if you are free to innovate without regulations already there, which are dysfunctional, it'll be a lot about negotiating aspects of rights where you can handle the externalities problem really well, the problem of aesthetic conformity versus freedom. We think that the current solutions in zoning and so on are terribly dysfunctional and they They don't really fulfill the functions that they may have or may have had in the past. So we think that the better approach is having the right infrastructure for the settlers and investors to really have a very finely and diversified way to deal with each other and to pay off people for certain rights and to buy certain rights. and that a lot of conflicts that are usually created by politics

would disappear right there. But, of course, you'll always have conflicts, and that's why this legal framework maybe is the most important one. And it's certainly not about specifying every square centimeter of how it's got to be used, but leaving up a lot to the spontaneous order and the emergent order of people figuring out how they want to live and the trade-offs, and there will always be trade-offs. And so we expect to have quite a diversity within a zone of diversity.

So it's like special zones or village-like structures within a more city-like urban development, things that may rather look like intentional communities. So there's also a trade-off. How much alignment do you want to have with the people? You live close to each other. and we expect that you'll have some communities which are very, very closely aligned where you even have the same aesthetic preferences and then you'll have zones which are very pragmatic

and leave a lot open and have a more chaotic look, a little bit more chaotic in a sense, they look more spontaneous and we think that's fine and people should be free to experiment on those ways and they are much more functional within solutions if you open up that space to the kind of experimentations

that we're used to in entrepreneurship in a good sense. So you have optionality, diversity of... I love that you can pay for aesthetics. I would pay for aesthetics if I can. The urban sprawl or the suburban sprawl, excuse me, suburban sprawl here in the United States, the strip malls, the plastic houses, the just cookie cutter fashion of it all across the country

is nauseating and it's very high time preference, right? The building material is not always great. It's an important point. So we don't think that the current kind of urban development is a market result. We think it's the result of very distorted markets with dysfunctional regulation, most dysfunctional zoning combined

with a very bad financial infrastructure that leads to the hoarding of real estate for lack of better investment opportunities. And really to a certain extent, bitcoin fixes some of that problem or could fix some of that problem uh and of course a short time preference uh which is one of the main results of the distortion of the monetary system and by financial order uh so we think a lot of the faults in current urban developments are really based on bad legal framework and bad financial framework and the bad financial framework is

addressed by bitcoin and the bad legal framework is addressed by free private cities so let's lean into like how quickly these changes can can happen if if citizens opt into something like a free private city again you mentioned emirates singapore one generation fishing cities to global capital uh capital capitals of the world if you will financial capitals of the world uh to some extent uh and maybe that's a like a problem a lot of people particularly in the west have today is they they see something like going and starting a free private city and they just think it's too arduous it's it's too daunting of a task to overcome it seems impossible almost like we have all this like what happens to all this like how uh and we just let it decay and then we move

on like what is the optimistic pitch for somebody being able to turn around a city and and have a booming uh bustling uh city that is actually aesthetically pleasing and an economic powerhouse We know from history how amazingly quick change can be once you have role models and once you use, I mean, the feedback loops of technology, of well-invested capital, and so on. But still, in a short-term preference world, those projects are very long-term and too long-term for most people. So, I get the point. Still, I'm optimistic. first i expect the speed of change to increase over time and things look like things are speeding up and second it's not a binary thing it's not a zero one thing really because a lot of progress

has already been made and it's a gradual thing and some of the projects may start very small and they have already started and they may end up small but we don't know which of these projects will scale either because they are just role models so or they make other people more optimistic about their endeavors because they figure out wow if something that small worked out in the end imagine what could be done if we increase the scale a bit so uh that makes me optimistic but still of course it's it's long term it's a long-term project that's why it doesn't really fit well into the current financial system i'd say uh it's still it's possible to calculate returns and mostly use real estate and that's a bit it's a bit of a compromise i'd say i don't

like the real estate game but the best way to in a pragmatic way to make sense of those kind of projects business-wise the most short-term returns of course on real estate where you have you'd say where there's a kind of downside protection because real estate will continue to be hoarded over the next decades probably so you can still even if there's no development you still have a real estate and you can sell it and it's a kind of downside protection but the upside of course it's big because if the real estate becomes more attractive because it becomes part of a hub because you have this kind of industrial development there then that makes sense even for i'd say common financial guys but i think the better case for it is even more long term and but i think that

a growing minority of people are getting that more long-term vision and are able to grasp it even without the short-term real estate play behind it and can act as pioneers where you say okay it may turn out that i'm too early but there i think bitcoin is the best case for optimism that within a decade even it couldn't go from something very fringe and and very hard to sell to anyone to something that really becomes an important asset and something that the mainstream has to write about and there's no way you can ignore it and so I think the speed increases because we are connected and will be hopefully even better connected around the globe and thus the cycles of learning from failures even and trying out something new and scaling it because

people all around the globe can see a solution and can change their behavior and can change their mindset even if it's just having hope for alternative things for pioneering for going the other way uh trying out something new then still that could mean a lot of impact so i think it makes sense to be optimistic but of course one need to bear in mind that within our short-term incentives right now those are more difficult more long-term games but in themselves i think there's a lot of fun in being a pioneer and then i mean look at the alternative uh you can still of course uh run in the hamster wheel of the current systems uh um so i you also look on the downside i mean how much is there to lose uh uh it's not for everyone to go all in now i i wouldn't

recommend that the guy has a family and so on to just sell everything and move to some new project but some are pioneers and for some it makes sense because there's not too much to lose and and it's much easier nowadays it's basically it's a plane ticket and if it doesn't work out you you'll find a way back as well so it's not like settling in the west and in the u.s although the world is different and people are looking for those challenges and so that makes me pretty optimistic yeah and you got to figure these pioneers too they probably are willing to like you mentioned, willing to stomach lower returns because they want this to happen.

It's an end in itself, I'd say. It's fun. It's meeting great, interesting people, entrepreneurial people. And the ride is fun in itself. And that, I think, is enough value to try it out. So do you think in the future, if these free private cities are successful

and the model is replicable and people around the world, like you said it gets to a point where it's undeniable you can't not report on it and people are beginning to to realize the benefits of this does the model get exported to like whole communities that are already in place like the island i'm on right now could it be imported here hypothetically yes definitely because it's not a utopian new project it's already bringing back from the past what has been in place before the nation state that it's has become the military success story it's been and then of course the more imperial like structure uh with the american world order i mean nothing against the u.s i i i love americans and then how they uh

but of course we all know that it won't be forever that and we're already developing into a new world although we don't know if it'll be better something certainly will be worse with the U.S. withdrawing from its role as arbiter of worldwide peace. But I think it wasn't sustainable in the first place. And there will be a need. So it's not just the utopian ideas of how could it be. I mean, it's not like you have something working very well and you propose something untried, untested, very utopian.

it's you have something that's working worse and and and worse uh every year and and you have a failure of an international structure of a financial structure as well and people are seeking alternatives if you like it or not uh and we've seen in the past that the tried and tested approach which brought most wealth and most development which happened mostly in western europe before was the model of the autonomous city because there you have skin in the game It's the merchants, really, who benefit from the city, who bear the cost of the decisions of the city and that space. And it turned out to be a quite successful model. And it was mainly for military reasons and reasons of the world order, shaping world order with those nation states in a new imperial arrangement that has replaced those more bottom-up structures that were there before.

Never perfect, of course, and we are not romanticizing anything of the past, but it's not entirely new model. So there'll be, if you like it or not, there'll be new agents on the globe with new kinds of gradual sovereignities and distributed sovereignities and new challenges. So I think it's best to grasp the challenge and to figure it out well and to try to find solutions and answers to that. And the best answers usually are entrepreneurial answers where you try to really be transparent of what you try to achieve, your better cost if you fail, and you offer it to people. So I think it makes a lot of sense to go that way instead of proposing a one-size-fits-all solution for a new global order or a new world order. oh well it's it's great that we're getting live data and we're able to to see this experiment played out in the wild today because it seems like the pendulum is at one end of the extreme right now and the centralization of the political systems around the world seems to be getting to such a heavy point that it's it's about to collapse i mean here in the last 18 months

of the united states specifically i've been saying this a lot recently in the last six months particularly is the sovereign states exerting their autonomy from the federal government and running with different policies from state to state as you mentioned as we mentioned before we have recorded i'm moving to texas because i i like the way they're exerting their sovereignty in the face of this encroaching federal control over individuals in the united states and so it just seems like historically we're at a historical moment where the pendulum is at its extreme it's about to swing the other way and as it swings the other way i think it's very uh good that we have these models being played out so it is easier to adopt as as the pendulum that gets a swing back

yeah even the increasing nationalism in europe of course is a sign it seems odd because nationalism was a centralizing force but now it is in europe is for a decentralizing reaction uh against the effort of the European Union and Germany and France to somehow have a United States of Europe with a more centralized structure in place, which is dysfunctional and would work even worse in Europe than it's working in the US. So I totally agree the pendulum is swinging back. We think it's best to use that momentum that's already there, but it's better not to play the game of politics too much it's not about secessions of ethnically homogeneous parts and and uh and nations themselves it's better to see it from more small scale more experimental ways of having zones

where you are able to fail and it's not because otherwise and we've seen it in europe uh that way to the smaller nation states means meant a lot of ethnic cleansing and nowadays it would be like cultural cleansing uh where you you'll have like people living in the cities very different mindsets and preferences than the people living on the countryside and it's like a state of civil war uh that you'll have ongoing so we think it's much better to either have like greenfield developments or have small scale zones and then building up on this kind of special economic zones free port idea which makes it easier and and easier to handle as well and it's not so much about who who knows the truth and who gets to decide what to do it's better okay where can we

have the safety wolves of trying out new things and if it don't work out okay it's not that bad it's not like a big failure where you have to punish those who pushed for going the other way and so on so within like the complex situations that we have in the complex politics i think it's best what i call a wall of a safe safety wall where pressure can go out and maybe be productive and and put something into motion that's working and then scales up because it's working not because you've convinced so many people uh not because you've convinced 51 to get rid of the 49% or something like that. So I think the best change is coming from small projects, from tiny minorities, to try out something that's working in a certain circumstance.

Well, I really like that framing. It's like, hey, let us try and fail, which is very different from, I guess, libertarian movements. What was it, Liberland, where they bought some land, and they just tried to do it all at once. And you've been stressing that throughout this conversation is a gradual improvement it's not going to happen overnight it's going to be small methodical steps over time as people realize the benefits of what we're doing and i think that that sets you guys up for for a lot of successes hey this is an entrepreneurial endeavor let us try and fail we'll we'll eat the the cost and the burden of that which is much more upfront and transparent compared to hey we're going to buy a bunch of land and in the middle of europe and

and it's going to be the best thing ever. Just come join us. Because a lot of things enter the mix. So you have cultural things, then you have, of course, the question of infrastructure, of location, and so on. And every place is different, and we'll have a bit of a different approach.

We think there's one pattern to follow, which makes sense, but still, of course, we could learn that, no, that wasn't really the crucial thing, that there was something else, and we really have to figure out. And most learning is done by trial and error. It's not, of course, you try because you want to fail.

You try to be as best prepared as possible and have the people who bring most experience to it and build up on what's already tried and working in the past. But still, every entrepreneurial effort, you'd be clear about that most will fail. And I'm pretty sure that most of those brokers will fail and have to fail otherwise something is not right about it yeah it's uh yeah skin in the game that's what i think it's on the game it's like the most important thing which again like you mentioned

the government has no skin in the game they can go spend two trillion dollars over two decades and afghanistan have literally nothing to show for it um no repercussions it's it's very infuriating you know uh there's a lot of infuriating things again the government again we mentioned lockdown i noticed you're this is something i wanted to touch on it's sort of tangential to the free cities conversation i noticed you're by your you're a nuclear physicist as well in background what do you what do you think that's something i've been very passionate about recently is the decommissioning of nuclear power plants around the world it seems completely nonsensical to me as as a nuclear physicist what do you have to say about this particular topic i think that's

been a moral hysteria hysteria how do you say that which is not dissimilar from the current covid situation so i think for some psychological reasons that some fear has passed on and it makes sense i mean it's it's possible to understand that fear but it has been abused by the way politics works because as i said before politics is based on the premise that you have artificial certainty that there is some way you can like have a certain result and you can avoid there's there are no trade-offs basically uh so uh i'm i think nuclear energy uh um or i i think we've stopped short of a nuclear age which was really bad because there was one of the reasons it's one of the developments which provided free and relatively safe energy or cheap and relatively

save energy and more energy is behind a lot of innovation which is making things possible replacing human toil and it's improving uh the situation of life for most people so i always thought it was kind of moral hysteria i know if i'm pronouncing it correctly i mean similar to covet if you actually like go and look at the data particularly the deaths per megawatt hour produced by nuclear energy compared to other energy sources it's real it's very low it's very low on the list of actually being dangerous if that's that's what you're trying to measure by and stopping progress it's also similar in a sense that the interventions that had to take place because there's a lot of pressure on politics in particular in old democratic societies in

the modern sense where people really expect governments to provide a kind of certainty for them, where you see in the case of nuclear energy and the few situations of nuclear accidents, like in Fukushima, fairly recently in Japan, you can really see the evidence is obvious that the cost in life of the interventions to keep people safe or protect them is much higher than the direct health impact of those accidents.

So, of course, most people died due to the floods happening And of course, there is leakage and it's a fairly well-known process of that there's a health impact of radiation, but it's overestimated because it's hidden, it's secret. So there's a kind of instinctive fear of people of like being haunted by demons that could attack you without seeing them. So that's closely related, I think, to the fear of viral contagion. And again, I think it's pretty obvious, and you degrade it, of course, there is a kind of contagion, of course, there are potential health issues arising. And of course, it's not that nothing is there. And, but I think we're seeing again, that the interventions, the cost of the interventions on human life is higher. not only how many babies have died there are estimates out there due to the COVID interventions

I think a few hundred thousand babies have died all around the planet as much more of course than have died to challenge to their immune system by this virus which I think is real and might very

well have leaked out of the Wuhan lab so I think there's something there But still, I think for politics, it seems like there's no alternative because a lot of people expect that kind of certainty. And if they don't see the cost of it, they expect that someone else is paying it and they're just getting the benefit of being protected 100% of whatever a secret danger is lurking out there. Yeah, it's the inability of the masses to understand risk and accurately react to that risk. The interventions in the economy particularly are, I think, very straightforwardly overreactions if you look at the data and understand the true risk of what's going on. I agree. Obviously, COVID exists. I do think it probably leaked from Wuhan as well.

Yeah, it's just that miscalculation of risk leading to an overreaction that causes negative externalities that nobody thinks through. They don't think of the trade-offs. They don't understand the trade-offs. How could you understand the trade-offs? These things are extremely complex. You can't have all information at every point in time, which gives you the ability to make perfect decisions, unfortunately. That's just not the way the world works.

And our instincts are not very well geared for modern complex life and societies full of strangers, billions of people cooperating, cooperating, interacting, and really our intuitions have been built and developed in an environment that was very, very different. Let's shift back. We'll wrap it up here. I have a question. How can Bitcoin help free private cities?

Do any of these free private cities start with the treasury that holds Bitcoin on the balance as an attempt to preserve wealth over time and potentially grow wealth significantly? Yes, all the projects I'm involved with, for them, it's crucial to have the infrastructure there should bear in mind that Bitcoin is one of the most important or could be one of the most important assets for our potential customers, which means people investing in a free private city, settling in a free private city, which are usually people that are open to institutional innovation, are usually location independent in a certain sense that they are able to move or relocate. And for those kind of people who try to address Bitcoin is becoming more and more important. So it'll be built up into the legal infrastructure as well.

And there is no, it makes no sense at all to have a legal tender, of course, in a free private city. We don't expect as a business model to use seniorage, not even a kind of token model where you have a pre-mine or something like that. We don't think it makes sense in the long term. We really want to look at it

that we are offering a service to people. We don't try to trick them. So it should be as transparent as possible. So don't bring in the financial riggedness to fund something. It's really by providing a long-term service. And I think it's just the need of our potential customers is how can I handle the situation

that Bitcoin will be a relevant asset to me as well, a location-independent alternative asset for which the case becomes the more important, the more top-down imposing interventions are happening around the globe. And it's very similar to the need for free private cities and alternative jurisdictions, let's say that way, so that there's a very natural match between the kind of alternative assets of Bitcoin and alternative jurisdictions of free private cities.

And as I said, Bitcoin is a very important role model. I think it's the main reason that something seems as crazy as the free private city project has become feasible. And it's not just crazy French people who, I mean, have dreams. And it's really people who've made money, who are successful, who are entrepreneurs, who are willing to consider those kind of alternatives, and that makes it much more realistic. So it's not just some libertarian pipe dream and stuff like that.

We've surpassed that level already. So there's a lot of serious interest and serious investment interest there in getting those things working. so if my listeners many bitcoiners are interested in in learning more about free private cities and potentially investing and moving to a free private city what what can they do where can they go how can they begin to get involved if they're interested in this free private cities.com that's the swiss foundation so we try to be the neutral place that keeps well informed about all The different projects we are a bit closely related to an entrepreneurial branch, which is doing negotiations and preparing the ground and starting the operating companies as well.

But the foundation itself is distinct from the entrepreneurial arm and the foundation is there to inform in a neutral way to pass on the idea and to help people make sound investments in the field by knowing the different projects, knowing the trade-offs of different approaches as well. So everyone who's interested, go to freeprivatecities.com, look at what's on the site, subscribe to our newsletter, or just send us an email if you have a more specific inquiry or interest already. And we try to figure out how the foundation can help you being part of the very exciting space and I think most exciting industry of our lifetime. Yeah, it's infinitely fascinating. And thank you for working on it and being passionate about it and educating people about it. again i think it's imperative as the governments of the world become hyper centralized and and try to act in a coordinated fashion to control the global economy i think having free private cities city free private cities is uh actually imperative if we want freedom in the digital age

and so freaks if you're interested go check it out raheem thank you for your time again i'm sorry for the for the reschedule at the last minute but uh it's been a fascinating conversation i think think you're going to crush it it's an incredible idea like and as as we said the pendulum seems to be beginning to swing back so the momentum i think is only going to continue to grow from here definitely thanks a lot i greatly enjoyed talking to you greetings from vienna well go enjoy your night thank you uh for joining us that's all we have today freaks peace and love