The Ghost Protocol - Making $$$$ Without a Single Government Tie
Transcending the 7 flags
Note: this is part 6 of a series on how to go further by integrating asymmetrical defenses against overeager states.
Here are the 5 articles in the series:
Beyond the 7 flags, there is an even more advanced strategy: It is possible to transcend the flags, offering even less surface for exchange with nation-states.
Flags spread the surface of exchanges between different countries, considerably increasing friction through the cooperation made necessary by different borders, languages, laws, practices and customs.
But what if we could remove part of the necessary exchange surface with nation-states altogether? How could we do that?
By completely eliminating the need to plant certain flags.
Let's take a fictitious example, but based on an aggregate of real people I know personally, to fully understand how this is possible:
Thomas and his organization with no flags and no exchange surface with the States
Thomas has a consulting business specializing in supporting fast-growing crypto companies.
It does its consulting via uncensored audio and video communication applications such as Signal
He holds a passport from a country other than the United States, with which he interacts once every ten years, when he goes to the nearest consulate to renew his passport.
He left this country more than five years ago, following to the letter the procedure required to no longer be considered a tax resident.
His digital presence is solely on decentralized (and therefore uncensorable) websites3 such as Nostr. He also appears as a guest in articles, podcasts and videos on sites and social media 2.0, but which belong to other people.
His reputation precedes him, and most of his customers come from word-of-mouth.
He is a digital nomad and travels the world as he pleases, never staying more than three months a year in any one country.
He only accepts payments in cryptos.
In other industries, this would significantly diminish his potential customer base, but since Thomas only works with crypto companies, this is not a problem.
He doesn't have a company, and invoices his customers in his own name, using a simple email address and web3 addresses as contact details.
If one of his customers insists on having physical contact details on the invoice, he puts the address of his current location.
In some countries, this could prevent some customers from including his invoice in their expenses, in the event of a tax audit and challenge by the tax authorities, but his customers are prepared to take this risk, as it is a non-negotiable element for Thomas, and they see it as part of the necessary cost of working with Thomas.
He also knows, just in case, that he can simply rent a virtual address from one of the many companies that offer this service, such as Anytime Mailbox, Post Scan Mail, Virtual Post Mail, UK Post Box, Courrier du Voyageur, etc.
These services can scan any paper mail they receive and notify Thomas, but he's really attached to the idea of having no fixed point anywhere, so he doesn't use them.
To spend his cryptos and live, he has several strategies:
He pays for his SIM card and worldwide Internet subscription with services that accept cryptos, such as SimXL.
When he arrives in a country, he consults several apps1 which immediately let him know which businesses natively accept his cryptos. He prefers to do business with them.
When he wants to order online, he goes through e-commerce sites that natively accept cryptos, like Shop in Bit, Monero Market, etc., or buys vouchers via sites selling them for crypto, like Cake Wallet, Bitrefill and many others.
It's delivered to hotels, friends' homes and even anonymous Amazon lockers.
In cases where he has to use the traditional system, he has several bank cards, which are powered solely by cryptos.
He keeps any income he doesn't spend on cryptos, or invests it via DAOs and other DeFi (decentralized finance) systems.
A large proportion of his cryptos are stored in a wallet that doesn't even exist, either physically or in software: should the need arise, Thomas could access them by downloading one of the many pieces of software available, or by buying hardware wallets, and entering the twelve words he has memorized.
The essence of his fortune is therefore solely in his head, and someone who could search it completely and examine all his personal belongings (including digital ones) would not be able to guess it.
If he needs a loan, he can get one in minutes and without needing anyone's permission, by putting some of his cryptos as collateral on a DeFi protocol, like Aave on Ethereum, to receive stablecoins which he can then spend or convert into any crypto without going through a centralized exchange.
In the extraordinary event that he needs to use the traditional banking system, he has an account with a bank in Georgia, a non-EU Eastern European state, which he opened with a local address when he was there.
Only the Georgian state is aware of the existence of this account, and it is not interested in him, as Thomas is not a tax resident.
He has just enough money for a few months' expenses, so not much compared to his crypto assets.
Should the bank ask him for proof of residence in a few years' time, such as an electricity bill, Thomas can rent a cheap apartment in the country where he's staying for a month, in order to have a bill in his name, or offer to pay the bill of a friend who's putting him up in exchange for putting his name on it.
If the bank ever starts sending Thomas' account information to this country via CRS, that country won't know what to do with it, because Thomas isn't resident there.
And if Thomas wants to avoid this situation, he can simply return to Georgia to rent an apartment.
Or he can simply take advantage of the digital residency status of a state keen to attract profiles like his, and which offers electricity and water bills for such cases2 .
An elusive target that is very difficult for a State to control
Do you see how difficult it is for any state to try and control what Thomas does, and force him to pay taxes?
For Thomas's business, money and assets are not physically embodied; almost everything he does is located solely in cyberspace, via incensurable instances.
And you'll notice that everything Thomas does is legal: he's the epitome of the ideal smooth square.
Thomas's major physical incarnation is... himself.
But he lives in every country he visits as a tourist, without being registered anywhere except in the entry and exit registers at the borders. And he respects the laws of the countries he visits (not to mention the fact that visiting foreigners are allowed a little more margin for error in virtually all cultures, as people understand that these visitors don't know all their customs).
Of course, Thomas's example is more a Platonic ideal to aspire to for those who want to minimize their trading surface with nation-states, than a representative example (although I know people who come close to this profile).
But it shows what can be done with today's technologies: this is not science fiction.
Control through physical incarnation
States can only hope to control purely digital entities by forcing them to physically embody themselves on a territory.
And the more these entities are purely digital, with no physical incarnation, the more difficult it is for governments to control them.
Today, my business is above all a virtual business: my customers, although physically present somewhere, have discovered me almost exclusively via the web, and don't need to be in any particular place to do business with me.
My team is spread all over the world and works asynchronously: they don't need to be anywhere either, and several team members are nomads, some of whom I don't know where they are at any given moment, because it doesn't matter.
My company could therefore exist solely on the Internet, and the only reason it has a legal existence in any country is that today the States are forcing me to embody it somewhere.
But this incarnation is at best temporary and artificial: in reality, my company travels with me, and doesn't really have a location. If I move to another country tomorrow and want to move my business there, I can do so with a snap of my fingers.
Can you see how disruptive this is for governments?
Coming soon
In the next article, we’ll do a dive into the 2nd asymmetrical defense against overeaching governements : WELL-used encryption.
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And here are the 5 articles of this series :
At the time of writing, only the Republic of Palau, an Oceania country with a treaty of association with the United States, has this project, which has been promised for over a year, but has not yet come to fruition.
Wow, wonderful, a sterile existence without a family or community
This sounds so incredibly complicated. And what is the end goal of achieving this level of statelessness? It it fear of surveillance?