@ Camilo

----------- > “If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.” ― Henry David Thoreau, [Walden](https://archive.org/details/henry-david-) ----------- ### The problem: lack of freedom in the physical realm Freedom is essential to human life. Being free is what matters. That´s our target, always. No matter the time or space. We pursue freedom because we know its the right thing to do. Freedom is the right to question and change the stablished way of doing things. Where can we find some freedom? Certainly in the cyberspace. The cyberspace is a free space. Humanity has been blessed by the magic of cryptography, a technology that gave us all the necessary tools to operate in that environment without intervention of undesired third parties. In cyberspace cryptography performs the function of an impenetrable cyberwall. So, whatever we build in cyberspace can be perfectly protected. Thank to this cybernetic walls we can be sure that the gardens we build and nurture will be protected and cannot be trampled. When we build our digital gardens we have the keys to open the doors to let in whoever we want and most important to leave out whoever we doesn´t want. In the digital world we can already perfectly interact with one and another in a peer to peer way, without intervention of undesired third parties. In cyberspace we have Bitcoin for freedom of money and [Nostr,](https://nostr.com/) torrent and Tor for freedom of information and speech. These open-source protocols are designed to fully realize and expand the promise of freedom, and they certainly deliver what they promise.  So, thanks to the magic of asymmetric cryptography, we´ve already achieved sufficiently descentralization and the possibility of any level of desired digital privacy. [Cryptoanarchists](https://www.youtube.com/watch?v=gTtbkguROdk) and [cypherpunks](https://cdn.nakamotoinstitute.org/docs/cyphernomicon.txt) have set their conquering flag in cyberspace and there´s no force on Earth than can remove it. The digital world cannot escape the rules of cryptography. This is great but it only works in the digital realm, meanwhile in the physical realm we are overrun by centralized attackers due to the impossibility of the creation of impenetrable walls such as the ones we have online. Humans have the upper hand in creating impenetrable walled gardens in cyberspace, but in the physical space authoritarians have the upper hand in bullying physical persons. The physical world is also naturally free. According to natural law each person is free to do whatever he wants as long as it doesn´t hurt other people. However due to unnatural -artificial and inhuman- centralization of power, the natural freedom of the physical world has been completely undermined. Mostly by Governments, the entities that centralize violence and law. ## Bitcoin as a bridge between both realms  Let´s take a look at one connection between both realms, the physical and the digital world. Bitcoin layer one is made essentially of software plus hardware. It consists of any software that produces the same output as the reference implementation - Bitcoin core- and the hardware needed to run that software. Layer two, three or any other layer above, is made essentially of other software and other hardware that interacts with layer one in some way. All these layers, one, two an subsequent, are completely protected by cryptography and a set of game theories that have been successfully tested. Each new block added to the timechain is a testimony of the unstoppable force of freedom and meritocracy. Before layer one we have Bitcoin layer zero, which is essentially the sum of all actions and inactions done by bitcoiners regarding to or because of bitcoin. In other words, layer zero is composed by flesh and bone people interacting in some way with layer one of the bitcoin network. Hence, an attack on a bitcoiner - on his way of life- is an attack on bitcoin, the network itself. First because it is an attack on a layer zero node, the physical person, the bitcoiner under duress or coertion. And second because is also an attack on the store-of-value-aspect of bitcoin. Nowaday, the most common attack against bitcoiners is the entirety of compliance regulations. This is the sum of all coercive regulations,such as laws, threats of more laws, imprisonment, threats of more imprisonment, taxation, threats of more taxation, requirements to prove the origin of funds, coercive removal of privacy such as the travel rule, unnecessary bureaucracy such as the needed to obtain a money transmitting license and many others rules, in a never stopping inflationary coercive legislation.  If a physical attack is preventing any bitcoiner to exchange the value he created for bitcoin due to any kind of artificial obstacles -such as any kind of compliance- that specific attack is succesfull in the sense that even though the whole network keeps operating, the attack itself diminishes the value of all the bitcoins. So, even if layer-zero cannot be taken down, every interference on this layer is an attack on the bitcoin network. Attacks on layer one, two or any other layer that exists in the cyberspace can interfere with the network but they may hardly subtract any value from it. For example we have already been through plenty of times where hashing power was diminished due to government intervention and the bitcoin network remain completely unaffected. On the other hand successful attacks on layer zero subtract potential, but real and demonstrable value. This value is equal to the amount of value the frustrated user would have added to the network if he would have been able to use it freely, that means if he would have sold his product without the cost of compliance. I´ll demonstrate this in the next chapter. ## The cost of compliance Alice is a merchant specialized in a specific area and topic. She studied the market, her business, her suppliers, consumers, the logistics involved, marketing, design, and everything necessary to become a successful entrepreneur. After investing a considerable amount of resources, she developed a perfect product. Or at least she considers it perfect, that is, the best in its class. While developing everything necessary to create her product, she met Bob, who became her main lead and stereotype of a buyer persona. She knows what Bob wants and she wants to sell it to him. According to Alice's calculations, for her business to be viable, she must sell the product at ten satoshis per unit, and fortunately, Bob is willing to pay that price for it. Alice's product is finished, ready to hit the market, but just before sending it to production, Alice decides to take a pause to analyze her reality. Before taking the public action of making her product available in the open market, Alice analyzes her material, political, and legal reality. In doing so, she realizes that she lives under the jurisdiction of a State. She learns that the Government prescribes through its regulations how she must behave. She analyzes that in order to sell her product legally, in compliance, she must make a series of modifications to it. The product before hitting the shelves must first be modified both in the way it is presented to the market and also regarding certain technical characteristics that it possesses. She must also modify the way it produces her product by changing the contractual relationship with its suppliers, distribution channels, and all other types of logistics involved. She must make all these changes even if they bring about significant and insurmountable inefficiencies. Likewise, Alice also sees that she not only has to modify the product but also has to meet tax obligations. In addition to paying an accountant since the tax obligations by some irrational reason are not calculated by the creditor. Additionally, she must hire other professionals to assist her in studying the current regulations and how they should be applied in all stages of production, distribution, and sale of her product. Alice, being a rational person, wishes to avoid having to make these modifications since they increase her costs while also decreasing the quality of her product. But when studying compliance, that is, the entirety of applicable regulations, she also examines the consequences of not being in compliance. Alice realizes that if she does not comply with the regulations, she risks having all her assets legally confiscated, going to prison, being killed while they try to capture her to imprison her, and, if she goes to prison, being tortured in jail by other inmates or by State officials in charge of holding her in that place. So, since Alice does not want to suffer these negative consequences, she decides to modify the product and be in compliance. So, Alice makes the necessary changes and puts her new version of the product on the market. Then she has the following dialogue with Bob, her lead, the interested party in acquiring the product. Bob: *- Hey Alice, nice meeting you here in this market. I came to buy the product you were developing and told me about. However, this product I´m seein now is not what you promised me. This is clearly inferior.* Alice: *- Yeah, I know. I'm sorry Bob, but I prefer to sell this inferior product rather than risk having all my assets confiscated, going to prison, being killed while they try to capture me, and if they don´t kill but managed to put me in jail I could be torture there.* Bob: *- Ok, no problem. Thats quite understandable. I don´t believe anyone would prefer that kind of experiences. But given the quality of the product, I no longer intend to pay you ten satoshis; I only offer you eight. Shall we close the deal?* Alice: *- I'm sorry Bob, but I can't sell it to you for eight sats. Due to government intervention and its requirements, now I can't even sell it for less than thirteen satoshis.* Bob: *- Ok. Considering this I prefer not to purchase it. I will keep looking for alternatives. Bye*  Some time later, Charlie arrives at the market, who is also interested in the product and, despite it not being like the original version, decides to purchase it by paying the thirteen satoshis demanded by the seller Alice. Meanwhile, in the same universe, we have Daniel, the last character in this example. Daniel is a merchant competing with Alice. Daniel has a product that is very similar, practically identical to the one originally designed by Alice. Like Alice, Daniel initially also wants to sell it for ten satoshis. Just like Alice, before heading to the market, Daniel analyzes the reality in which he lives. And it turns out that he also lives under the jurisdiction of a State. Daniel too then analyzes the entirety of the applicable regulations and also comes to the conclusion that to comply with them, he would also need to modify the product and cover all the additional expenses artificially generated to be in compliance. However, Daniel's ethics are different from Alice's. Daniel understands that his product is indeed perfect (the best in its class) and that therefore modifying it would go against its essence. Daniel understands that changing the product would be a betrayal of his creation and therefore a betrayal of his own self and the essence of his being. Daniel conducts an ethical analysis of his actions and the moral implications of putting the product on the market. Daniel sees that the product not only does not harm anyone but is also made to be freely acquired by adults who give their consent for its purchase and subsequent use. Daniel also understands that paying taxes only serves to promote the slavery system driven by fiat and that whenever he can avoid collaborating with the immoral fiat system, it is his ethical obligation to do so. Likewise, Daniel highlights the hypocrisy and inefficiencies of anti-money laundering regulations, as well as the futility of requiring licenses for naturally free acts that do not harm others. For all these reasons, Daniel decides to sell the product in its current state irregardles of compliance regulations. However, before going to market, Daniel also studies the possible consequences of neglecting compliance. By doing so, Daniel sees that if he does not comply with the regulations, he risks having all his assets legally confiscated, going to prison, being killed while they attempt to capture him to imprison him, and, in the event of going to prison, being tortured in jail by other inmates or by State officials responsible for holding him in that place. So, since Daniel is a rational person who does not want to suffer these negative consequences but also does not want to betray his product and himself, he decides to take the risk of not being in compliance. After making this decision, Daniel puts the product on the market and there he meets Bob. In doing so, they converse in the following terms: Bob: *- Hey Daniel, this product is exactly what I was looking for. A product like the one promised by Alice but never delivered. I love it! I offer you ten satoshis for it.* Daniel: *- Thank you for your feedback Bob and for the offer! However I am currently selling it for eleven satoshis. Ten satoshis seems like a good price to me, and it was indeed my original intention to sell it for that amount because at that price I achieve competitiveness and a sustainable business model.* Bob: - *So why are you asking me for eleven satoshis?* Interrupts Bob Daniel: *- Because that price is calculated before assessing compliance and the risks associated with non-compliance. By not complying with the regulation, I managed to maintain the quality of the product and avoided a large amount of unnecessary expenses, but there is no way to avoid the risk of facing penalties for non-compliance. To bring this product to market, I had to incur several expenses in order to minimize the risk of non-compliance as much as possible. While I am taking all reasonable actions to prevent all of my assets from being legally confiscated, from going to prison, from being killed while they try to capture me, and in case of going to prison, from being tortured, the reality is that I still run the risk of all that, or part of all that, happening to me, my family, or any of my company's employees. The remaining risk balance is transferred to the price along with the costs of mitigating those risks. The total of those costs and the remaining risk I estimate them at one satoshi per unit of product. Therefore, I can't sell you the product for ten satoshis, but I can sell it to you for eleven.* To which Bob, lacking a better option in the market, ends up buying the product for eleven satoshis. **In summary:** two products were made by two different merchants whose business model allowed them, in both cases, to put the product on the market at a rate of ten satoshis per unit. However, in one case, a lower quality product was sold for thirteen satoshis, and in the other case, a higher quality product was sold for eleven satoshis. That is to say, in the first case there was an overprice or inefficiency objectively measured at three satoshis, while in the second case there was an overprice or inefficiency of one satoshi. So, we are facing a total loss of value equivalent to four satoshis. The value represented by these four satoshis was absorbed by the inefficiency programmed and ruled by the State. The example shows us that whether one chooses the compliance route, as Alice did, or the free market route, as Daniel did, in both cases the existence of regulations generates an additional cost to the market. In this example the state attack on layer zero was successfull and extracted from the Bitcoin network a value of four satoshis. ## Bitcoin is money Bitcoin is many things but essentially is money. And money sole purpose is to store value in order to facilitate future exchanges of products and services with other people. Without the products and services to be exchanged for the money, money itself would be useless and worthless. We only use money because we may require favors, benefits, services, products from other people in the future. And we don´t know which services and products we´ll need nor exactly when we are goint to need them.  The total value of bitcoin equals to infinite divided twenty one millions. This is because the total worth of the network mirrors the total worth of accumulated capital by the entirety of mankind throught its entire history. That is clearly a lot of value. But if the if the dividend equals zero then the divisor is also zero and if the dividend growth is obstructed through artificial means -such as compliance- then the divisor growth is also obstructed. Bitcoin layer zero, the bitcoiners and the services and products we create, are what give value to the twenty one million units of bitcoin. Freedom is without a doubt the best context for value creation. So, the more and better games we can create that allow humankind to find a way to exercise freedom, then the most value we can add to all the layers of the network. This is why the most important layer of the whole bitcoin phenomenon is layer zero, the bitcoiners. Hence the problem to be solved is not how to prevent bitcoin - layer one upwards- from successful attacks. The problem to solve is how to prevent attacks on layer zero. Or in other words, the problem to be solved is how to get bitcoiners in the physical world to practice the same level of freedom that bitcoin achieves in the cyberspace. Summary of the first part of this article: freedom in cyberspace has already been conquered and each further development in the digital realm contributes to further developments but only in the same realm. Meanwhile in the physical space, the layer zero of bitcoin is under constant attacks that successfully extract value from it. ## Exercising freedom in a sly roundabout way  In 1984 the [Austrian economist](https://mises.org/) Friedrich Hayek predicted that we couldn´t take money with violence out of the hands of government. He stated that we needed to do it in a [sly roundabout way.](https://www.youtube.com/watch?v=5lV5P7aPZic) Twenty five years later Satoshi Nakamoto discovered the sly roundabout way actually introducing something that the government couldn´t stop. Thus fulfilling Hayek´s prophecy. Bitcoin is a sly roundabout way that removed money without violence from the hands of the government in a way that they can´t stop it. Cryptography in general and protocols such as Tor and Tails are a sly roundabout way that removed confidencial information from the hands of the government without violence in a way that they can´t stop it. Nostr is a sly roundabout way that removed social media and public information from the hands of the government without violence in a way that they can´t stop it. **Special Jurisdictions, Free Cities and Bitcoin Citadels are the sly roundabout way that is removing the market of living together from the hands of the government without violence in a way that they can´t stop it.**  So, what are [Special Jurisdictions, ](https://journalofspecialjurisdictions.com/index.php/jsj/article/view/51)[Free Cities ](https://free-cities.org/)and [Bitcoin Citadels?](https://citadelium.com/the-seven-levels-of-citadels/) To understand what they are we can take a look at the current mainstream market of living together, at how the physical space is organized. Essentially the entire planet Earth and its surroundings are run by a conglomerate of Governments. They create all the rules, regarding every aspect of life, of all the individuals, and enforce every rule through coercive means. In the mainstream market of living together individuals have several alternatives to pick from. We can choose to live in a natural city or a pre design city, in a public neighborhood or private neighborhood or even in an intentional community with common interest amongst the users. But irregardles of the choice, every product offered in the mainstream market has the sames rules which are established by the host state to the entirety of organizations in his territory. In the mainstream market, even the most different products abide by the same high level rules such as criminal law, civil law, taxation laws, customs, enviromental laws, money laundering regulations and many others. To abide to the sum of all the laws and regulations is to be in compliance. The centralization of regulations makes extremely difficult to experiment in market of living together. The less experimentation is allow, the more human progress is hindered. So what is the sly roundabout that fixes this? What are Special Jurisdictions, Free Cities and Bitcoin Citadels? I´m using the term Special Jurisdictions as an umbrella term that includes the entire spectrum of iterations of products that aim to modify the mainstream rules of the market of living together. This term includes all the different models such as Charter Cities, Free Cities, Special Economic Zones, microstates, micropolis, start up societies, government as a service, self governing jurisdictions, autonomous intentional communities, network states and Bitcoin Citadels. The array of possible iterations is huge and permanently expanding. What they all have in common is that each of this experiments aims to create a functional game theory that replaces the lack of unbreakable walls in the physical space. Let´s take a look of a couple of examples. Special Economic Zones are bounded areas of countries that have their own rules and regulations. Worldwide, there are more than five thousands special economic zones located in more than hundred countries. One of them is the special economic zone of Shenzhen in China. The Chinese government allowed Shenzhen the freedom to experiment with certain practices that were prohibited in the rest of the country at the time. This included allowing foreign companies to make direct investments in China, allowing people to buy and sell land, allowing Chinese people to set up their own private businesses and relaxation of the system that limited internal migration within China for Chinese citizens. It served as a place where China could experiment with market reforms. The experiment was such a huge economic success that it was replicated in many other areas of the country. Another place that has made extensive use of special economic zone is Dubai. The monarchic Government has more than 30 SEZs. In this case one of the many obstacles removed by the host state its the monopoly of the legal system. Dubai Government allowed the special economic zone to have its own independent legal system thus conceding a modification of the mainstream rules in that area. This kind of projects, such as Dubai or Shenzhen, are a top-to-down product. Fully created by the Governments thus compliant with their own regulations.  On the other side of the spectrum we have Citadels and several other archetypes of not so compliant projects . For example the [Free Commune of Penadexo](https://free-communities.org/project/penadexo/) it´s a grassroots project building a freedom-oriented community in one of Spain’s abandoned villages.  It´s model is based on building a peer to peer society avoiding government intervention as much as possible. They stablished themselves in an abandoned historic village and the started to track down the owners to purchase as much property as possible. Meanwhile, they are living there and expanding their users base while also reconstructing buildings. This is an example of a completely different way of dealing with the Government. While Special Economic Zones are fully compliant and created top to down, this model on the other hand is bottom-up and aims to add value to the users relying in factual freedom which is exercised by stablishing the commune away from heavily populated centers where Government grip is tighter. Under this model the interaction with the Government is kept as low as possible. Their strategy relies in ignoring the Government as much as possible and being a good neighbor. With this simple and effective tactic some Citadels enjoy the benefits of liberty in their lifetime without needing to spend huge resources in governmental lobby. There are countless models or archetypes of Bitcoin Citadels trying to solve the obstacles in different ways, trying to restart the system. And one of the challenges of the Bitcoin Citadels is how to connect the different projects to boost and help each other. This is where [The Meshtadel](https://www.citadel21.com/meshtadel) comes into play. The Meshtadel is a system where decentralized tactics are used to help and defend citadels connected in a global network. With real life connections with fellow bitcoiners. Its an organization equivalent to the hanseatic league built under a [starfish model](https://youtu.be/-2Fyd5VjuUw). If you cut off a spider’s head, it dies, but if you cut off a starfish’s arm, it can regenerate and even grow into a new starfish. The Meshtadel its a network of peer relationships, with ambiguous leadership roles, trust among participants, a shared ideology and vision based on the Bitcoin ethos, and an open system where new nodes - bitcoin citadel builders - can participate.  The long term goal of the Bitcoin Meshtadel is to help Bitcoin Citadels to gain the support of a critical mass of the total population. If enough people see that Bitcoin is as peaceful as it gets, in the long run, some nations could become friendly and supportive enough to legally tolerate the Bitcoin Citadel inside its territory in the form of a Bitcoin safe haven. In the Meshtadel we are fighting from the moral high ground using memes, Nostr notes and zapping our way into freedom creating an online and offline circular economy. ## TO CONCLUDE: Special Jurisdictions, Free Cities and Bitcoin Citadels are the sly roundabout way that is removing the market of living together from the hands of the government, without violence and in a way that they can´t stop it. Nation states, abusing the myth of authority, have halted development on the market of living together for so long that a blooming freer market is eating its lunch. The sovereign individual thesis is live and continuously expanding. The network state is forming and intentional communities are flourishing all around the world reshaping globally the relationship between individuals and the governments. With global internet connections, uncensorable means of communication and Bitcoin as the backbone of a new societal order, we are beginning to disrupt the old paradigm. The fashion of the present world is passing away, let’s help it to move forward along by building Special Jurisdictions, Free Cities and Bitcoin Citadels. --- --- --- --- --- --- --- --- ------ by[Camilo](https://camilojdl.com/)at 875.341 timechain. If you find this content helpful, zap it to support more content of the sort and to boost the [V4V model.](https://dergigi.com/2021/12/30/the-freedom-of-value/#accept-the-nature-of-information)