Advocates of a self-proclaimed independent island in the heart of Europe, who hold libertarian beliefs, are placing their aspirations on a future reliant on cryptocurrencies. However, the unpredictable nature of the technology raises concerns about the micronation’s prospects.
- Liberland, established on libertarian principles and centered on blockchain and cryptocurrency
- Lacks international recognition and faces rejection from Croatia and Serbia.
- While local residents are hopeful for investments, concerns about inequality persist.
In Apatin, Serbia, the strains of Richard Strauss’s composition ‘Thus Spoke Zarathustra’ resonated from a portable radio situated on the Liberty, a two-story houseboat located near the self-proclaimed crypto micronation of ‘Liberland.’ This micronation is situated on a muddy Danube island bordering Serbia and Croatia.
The music, inspired by Friedrich Nietzsche’s novel about the concept of the ‘superman,’ was broadcast on what the residents of Liberland consider their unofficial state radio. They saw it as a way to commemorate what they view as an informal border arrangement for their nation, which was established based on a blend of right-wing libertarianism and cutting-edge technology like cryptocurrency. The nation itself is located on the marshy island of Gornja Siga.
During the 19th century, alterations to the course of the Danube resulted in certain small peninsulas, once part of Croatia due to the river’s meandering path, becoming stranded on the Serbian side of the river’s new course. Additionally, the 7-kilometer long island of Gornja Siga, previously part of Serbia, found itself much closer to the Croatian bank.
Croatia has managed Gornja Siga but is reluctant to formally claim it, as doing so would require relinquishing its claims to larger sections of land on the Serbian side. Meanwhile, Serbia is content with the existing status quo.
Czech right-wing libertarian politician Vít Jedlička intervened in this situation, asserting that the island was essentially unclaimed. In 2015, he declared the marshy and frequently-flooded wetland, which serves as a habitat for wildlife like wild boars, woodpeckers, and red deer, to be an independent entity.
Presently, Liberland is inhabited by approximately six to eight pioneering settlers who alternate between camping in tents on the island and enjoying relatively more comfortable stays on the modest Liberty houseboat or in nearby Serbian houses.
In contrast to their simple lifestyle, Liberland’s e-citizens employ cryptocurrency for voluntary tax payments to support the island and its vessel, the Liberty. They also use cryptocurrency for transactions at occasional pop-up shops in nearby Serbia, with the long-term aspiration of purchasing plots of land.
Jedlička, who was elected as Liberland’s president in 2015 by his girlfriend and a friend, claims to have invested around $400,000 in the development of a blockchain-based governance system that would allow citizens to vote through it. However, this system has not been implemented yet.
Nonetheless, the project has garnered support from libertarian enthusiasts worldwide who see a natural alignment between an ideology emphasizing private ownership and a technology capable of decentralizing governmental oversight of property.
Vít Jedlička, the president of Liberland who follows right-libertarian principles, pictured in front of the country’s flag during the Floating Man festival on August 6, 2023. Photo credit: Thomson Reuters Foundation/Adam Smith.
“Blockchain is synonymous with freedom; it emphasizes individual responsibility,” stated Mladen Milankovic, a Serbian software developer who was visiting Liberland. “Blockchain means retaining control of your own keys and assets.”
In the past, Croatian guards have made efforts, sometimes forcefully, to prevent access to the island. However, in July, an informal and precarious border arrangement was reached, allowing visitors to set foot on the island.
Both the Croatian and Serbian governments did not respond to requests for comments, but they have previously rejected Liberland’s declaration of independence.
Blockchain and bitcoin
Given the prevalence of mosquitoes on the island, most of Liberland’s activities occur in the ‘Ark Village.’ This is a permanent, rustic settlement located in Serbia, featuring shared accommodations, kitchenettes, a bar on the lower level, and an upstairs meeting room. The village is situated just outside the tranquil town of Apatin, approximately 200 kilometers northwest of Belgrade.
Although few individuals have actually visited the island, over 700 people worldwide have paid to become e-citizens of Liberland. The cost for e-citizenship currently stands at $2,500 or equivalent to 25 days of labor dedicated to the fledgling nation.
Every August, ‘citizens’ and supporters come together to host a festival known as Floating Man at the Ark Village, with a focus on the nation’s foundational technologies.
On the festival’s first day, a small group of curious locals ventured from Apatin to attend, but for most speakers, the audience numbered around 20 people.
Residents and advocates of Liberland installing a sign marking what they claim to be an informal border with Croatia. Date: August 6, 2023. Photo credit: Thomson Reuters Foundation/Adam Smith
A promotional visa stamp for the nation of Liberland. Date: August 6, 2023. Photo credit: Thomson Reuters Foundation/Adam Smith
Discussions regarding Bitcoin and blockchain technology attracted significant attention. It’s noteworthy that over 99% of Liberland’s reserves are held in the notoriously volatile cryptocurrency, a move that policy experts consider potentially unwise, especially when compared to the more traditional option of gold.
Bernhard Reinsberg, a lecturer in international relations at the University of Glasgow, expressed concerns about a bitcoin-backed currency for most nations, citing bitcoin’s high volatility as a drawback.
Christopher Carr, a cryptography and blockchain lecturer at Exeter University, echoed these concerns, highlighting the risks that Liberland might face similar to those encountered by El Salvador after adopting Bitcoin as a currency in 2021, including challenges in gaining public trust.
Liberland utilizes its native tokens, the Liberland dollar and merit, both of which can be purchased with bitcoin. These tokens form the basis of the island’s decentralized autonomous organization (DAO) government on the blockchain, a shared database across a network of computers.
Merits can be obtained through either purchase or work, and having more merits translates to more voting power. Citizens can use Liberland dollars as collateral to cast votes and ensure the efficient operation of the blockchain.
Liberland residents view DAOs as transparent and believe that their absence of central leadership reduces corruption. However, blockchains are susceptible to hacking, and in the United States, DAO members have faced liability for security breaches.
Reinsberg considers a DAO feasible for governance because decentralized networks are less susceptible to attacks, and technology can enhance the privacy of voting processes, which is particularly relevant in regions like the Balkans, where trust in government by a single ethnic group is low.
Nevertheless, some remain skeptical, as Carr noted that secure voting over any internet protocol is challenging, and skilled hackers might manipulate the vote in ways that resemble normal yet unexpected results.
‘Buidling the Liberverse‘
Liberland aims to attract people to the nation through its metaverse, commonly referred to as the ‘Liberverse.’ Given the arduous journey to reach the actual Liberland, which involves two trains, a taxi, and a boat, bike, or car ride from Serbia’s capital, Belgrade, a digital replica of the country holds appeal.
In the long run, Kaspar and Jedlička envision a strong connection between the real-world Liberland and the metaverse, using non-fungible tokens (NFTs) to establish property rights. Space on the island, which is roughly the size of Gibraltar, is limited. Liberlanders hope that eventually, land acquired in the real world will be matched with a digital plot. However, this will require time and a million-euro flood barrier to safeguard island nation buildings, as stated by Jedlička.
For residents of Apatin, Liberland offers the hope of much-needed investment. David Popovic, a 41-year-old IT professional and lifelong Apatin resident, expressed that the city is small, and many people are leaving. He mentioned that some locals may not yet comprehend the significance of Liberland and its connection to cryptocurrencies.
However, some visitors expressed concerns about potential income inequality resulting from an influx of people, particularly wealthy foreigners. They worry that Liberland might become primarily focused on wealth, although its primary goals are related to new technologies, data protection, and promoting equality and liberalism.
(Reporting by Adam Smith; Editing by Jon Hemming)
