MTL-fest 2024, expectations, part 1

In just a couple of weeks, MTL-fest 2024 will begin. The first MTL-fest took place last year, and it seems it will continue annually. There are quite clear expectations from the festival:

  • crowded hustle and bustle
  • interesting stories
  • exchange of practical experience
  • networking

Regarding the crowded hustle and bustle, there were about 250 people in 2023, and it’s unlikely there will be fewer this time. Moreover, the festival is now becoming a three-day event.

As for interesting stories: there were five speakers last year, and six are expected this year. The headliner then was Svetov; this year it’s Pozharsky. From related projects, there was Edlicka from Liberland last year, and this year there will be Biellas from Liberstad and Polozov from FSP. From the Montenegrins, there was a lawyer; now a bitcoiner is expected. Among the theorists, there was Usanov; there will be Shustov. From MonteLibero, Stas Karkavin is expected, and he looks somewhat more organic in public speaking than I do.

There was no separate block for the exchange of practical experience last year; instead, a musical block was planned, which didn’t take off at all. But now, the entire third day of the festival will be dedicated to practice.

In terms of networking, I want to understand the main thing: what benefit, specifically, can diverse libertarian projects scattered across the globe bring to each other? To pinpoint this benefit and learn how to extract it.

For those who have already planned a trip to Montenegro for MTL-fest—I can only be happy for you. For those who can suddenly drop everything and come—suddenly drop everything and come. Those who want to but cannot will have to make do with broadcasts and recordings of speeches, reports and interviews, stories from those who return from the fest, and the application of the experience they bring back from the festival. That is quite a lot.

On October 4, the first day of the festival, the official program will consist of a screening at MonteLibero Space of a documentary film about the defeat of the Hong Kong independence movement. Parallel to this, it is planned to gather at Tikhiy Omut and informally chat about the fate of libertarian emigration in general and MonteLibero in particular.


In the next post, I will briefly talk about what I expect from the speakers’ presentations on Saturday, October 5, the main day of the festival.

Games with MEREXP products

This post is accompanied by a donation of 30 USDC

On August 31, I released an interview with representatives of the MEREXP company, in which I tried to figure out how to make money trading cryptocurrencies using metrics based not only on mathematical wizardry, but also on economic theory. Even after the interview, I was left with a feeling of some misunderstanding as to how theory translates into practice, so we decided to continue studying the proposed product.

To start, I registered on the website merexp.com. Here, I must say, the process seemed quite insecure to me: the password was simply sent by email, and afterwards, I couldn’t find any way to change it in the personal account. However, as long as the service only provides paid subscriptions to certain indicators rather than taking money under management, it’s not that critical.

In the future, the company representatives promise a large set of analytical tools, but so far only Swallow is on sale. This is an AI that swallows news related to Bitcoin (and separately to other crypto) and spits out an assessment: how many positive and how many negative mentions accumulated during the day. Then the information is displayed as a simple needle indicator, which shows what the news background is right now, in the moment.

For those who want to understand the dynamics of the news background, graphs are provided, which look roughly like this:

A monthly subscription for access to the indicator is 17 dollars. They provided it to me for free for the first month so that I could play around with it and write this review. For those who register via my referral link https://merexp.com/?ref=ankap_tyan, the subscription price will be 12 dollars per month (this is for monthly payments; there is an additional bulk discount for quarterly or annual payments). Payment is made through a third-party service, cryptocloud.plus, in USDT or USDC, depending on your choice.

A natural question arises: how meaningful is it to buy access to a single indicator. Even the service authors are sure that it’s not very meaningful, which is why weekly reviews are included as a bonus, in which analysis is performed using an additional set of metrics (they are not ready to sell these metrics yet).

So, I have the ability for instant monitoring of the news background and detailed reviews, which, however, are released only once a week. I set a task for myself: to find out if this is enough to feel confident while trading. From the sale of DOGS tokens received in an airdrop, I had 0.00123149 BTC (about 65 dollars) lying in my exchange account; these were used for trial trading using the proposed analytical toolkit, as these were definitely funds I wouldn’t mind losing.

On September 4, MEREXP released another review: “Bitcoin: A Time of Uncertainty and Hidden Opportunities.” The content of the review boiled down to the following theses: seller pressure is growing in the market, while buyer activity remains stably low. The news background is consistently positive, so any drawdowns that occur are shallow, and after some time the exchange rate returns to its level. But as soon as the news background becomes negative, that’s it, expect a crash. Thus, an ideal situation was created for testing the news indicator specifically, since the price was supposed to depend primarily on it.

At that time, on September 4, I opened a position—a long with 5x leverage—at a price of 58071, using a quarter of my deposit. The rate almost immediately began to crawl down. Daily monitoring of the news background showed that it remained positive, sometimes shifting toward the yellow zone. Taking what was written in the review on faith, I interpreted this as a signal that “the drawdown is temporary, I can average down, we will go up soon”. And I averaged down. This is roughly what my trading looks like on a chart with daily candles:

The position was closed on September 10 with a slight profit. On September 11, it was opened again at a lower rate and closed finally on September 13 at a price of 58454, as I had to start drafting this report. Taking into account all the averaging, leverage, and trading commissions, the net profit was 0.00009351 BTC (about 5 dollars), which in relative terms means 7.6% over 9 days. Considering that I deliberately chose an unfavorable moment to enter, I consider the experiment successful. Of course, if I had honestly bought the indicator via my own referral link for 12 dollars, the purchase would not have paid off in such a short time. However, if a real deposit of at least a thousand had been involved instead of a toy deposit, the indicator would have paid for itself handsomely, with enough left over for some wine.

It is clear that a single success does not guarantee further profits. However, you know, sitting in a serious drawdown is quite an ordeal for the nerves, when you have to guess: is the rate ready to collapse, and I must urgently close at a loss to avoid liquidation—or is it ready to bounce back, and I should buy more at the bottom. The news background indicator is exactly what answers this question. Without access to it, I would not risk trading with leverage, and you can’t make a serious profit with spot trading.

One last piece of advice for the MEREXP company. Try to set up a test deposit as well and illustrate your weekly reviews by demonstrating how you trade in light of your own analytics. Then, firstly, potential buyers of Swallow or other future indicators will gradually develop a clearer idea of how to use such tools. And secondly, by the time you resolve the legal issues and are ready to accept money for trust management, you will have a proven success story. You don’t need to show trading in real-time so that people don’t copy trades for free, but reporting on a weekly basis looks like a quite viable marketing move.

Why is the Montelibero project so vague?

Montelibero activist Stas Karkavin gave an interview to Plot publication, where he answered a series of questions about the community, which, in turn, prompted some reflections on my part.

When I first came across bits of information about the activities of the Free State Project in New Hampshire, I was initially surprised by the looseness of the community: they seem to have a large festival, PorcFest, and some influence on local politics, manifested in the election of project participants to local representative bodies—but there is no clarity. It is unclear how many people participate in the project, who its public faces are, where to read a coherent chronicle of its implementation, and how to acquire a franchise.

But when we started creating Montelibero, it quickly became clear that these characteristics are not so much a bug, nor a feature, but rather boundary conditions. The harder one tries to force the project into the framework of a single organization, or even just to count everyone, the more strongly its participants will resist. Simply because they are volunteers, and therefore owe nothing to anyone.

A bit later, after reading James Scott’s “The Art of Not Being Governed,” it became clear to me that this tactic of evading being recorded, counted, assigned to a supervisor, and provided with supervisory instructions has been inherent in humanity since the Neolithic Revolution and is an invariant human response to the potential possibility of power being applied to them.

For this reason, unlike Stas, I do not believe in the Montelibero Association—a normal libertarian would not voluntarily sign up for any jurisdiction, regardless of how “contractual” it calls itself—especially if this contract cannot be terminated at the first whim. A libertarian does not need power over other people, even in the form of participation in power over a public resource. He needs it so that power cannot be arbitrarily applied to him.

At the same time, a libertarian is perfectly capable of voluntarily associating with people on specific issues that interest them. For example, on the website of the aforementioned FSP, one can see a calendar with a schedule of various events organized by a wide range of organizations, businesses, and initiative groups. It looks quite spontaneous and decentralized (if we don’t count the fact that all this information is presented on a single website, which is, of course, a potential point of failure). Similarly, over time, I expect a similar calendar on the Montelibero website, so that anyone interested can quickly check: if I’m traveling from Budva to Bar tomorrow, is there anything interesting happening there—at the First Club, Tikhiy Omut, Tortuga bar, or a couple of other less-exposed locations.

At MTL-Fest, which will take place this year from October 4 to 6, Stas will speak on behalf of Montelibero. This does not mean that he is the head of Montelibero, that he knows everything, or that he is authorized by everyone. No, it simply means he is from Montelibero, he is a good storyteller, and he has agreed to speak. Similarly, there will be presentations by Sondre Bjellos from Liberstad and Yuri Polozov from the Free State Project—and both are speaking on behalf of their projects, but they will only be able to tell a small part of what is happening there, and some people from the respective projects may likely find these accounts inaccurate. No big deal: if they seem inaccurate, there will be something to discuss.

In the coming days, I intend to briefly talk about all six speakers at MTL-Fest: who the presenters are to me, and what I expect from their presentations.

Why haven’t libertarians been herded into concentration camps and burned to fucking death yet?

Nikolai von Neuburg on the Volga

To this short, joking question, I have a short, joking answer: we tried, it doesn’t help.

Now, slightly more seriously and in more detail. Under socialist regimes, systemic violence against any entrepreneurial activity is practiced, but this usually manifests as the suppression of any personal initiative—since personal initiative is usually aimed at personal gain, which is too easily interpreted as entrepreneurial activity. The result, naturally, is the degradation of the society under the rule of any such regime, the gradual loss of active support for the regime, and ultimately the transformation of the regime into something freer. Indeed, where would active support come from for a regime that suppresses personal initiative? The further it goes, the more the support for the regime will be coerced, and that is a rather fragile state.

Alas, when such a regime collapses from its own inefficiency and lack of active support, it leaves behind an apathetic society of people with a suppressed sense of self-worth, but who are excellent at envy, undermining others, and pulling back anyone who stands out. Such a society is easy prey for any political regime. If lucky, a more or less libertarian one. Usually, of course, there is no such luck, and the new regime turns out to be only slightly less dismal trash than the old one.

What further complicates the task for connoisseurs of class purity who want to send all libertarians to a concentration camp for subsequent incineration is that libertarians are usually slightly more proactive, and tend to establish their own libertarian concentration camp, relocate there, and flip the bird from there to all those who for some reason dream of burning them. In my concentration camp, Montelibero, there are of course not as many libertarians yet as in the Free State Project concentration camp, but they have also settled in quite well. The summer sun, of course, is trying to burn us to hell, but some find refuge in air conditioning, some in swimming, and some actually like it. As they say, Jedem das Seine, which translated into Montenegrin means Jedem čevap, a ti jedeš nacionalni ponos.

By the way, if you are a Russian libertarian and prefer to eat ćevapi rather than national pride, then a relocation assistance offer to our concentration camp has recently appeared specifically for you. Take advantage of it before you are locked in an RF concentration camp.

Continuing the introduction to MEREXP

Material prepared for a donation of 30 USDC.

On 17.05.2024, I posted a review of the telegram channel MEREXP analytics. Unlike many other channels analyzing the cryptocurrency market, here, first of all, crypto was viewed simply as another type of currency, and the analysis focused primarily on the impact of global liquidity on it—and secondly, homemade metrics based on economic theory were used, which, paradoxically, is not that easy to implement within the framework of exchange analysis. In short, I liked the channel. Therefore, when the company running this channel approached me with an offer for an interview, I didn’t need to think long, especially since I still had questions from my review that hadn’t been answered. And here is what we came up with:

Ancap-chan: During the review of the Merexp channel, it remained unclear to me what your business consists of. You call yourselves an investment fund, but from the published materials, it is completely unclear how and in what you invest. The reader sees only analytics but cannot understand how skillfully you use them yourselves, and therefore cannot determine whether they should entrust their money to you. Perhaps you are still in the process of formation, and the business model will become obvious later. So, exactly how does Merexp plan to make money?

MEREXP Analytics: Yes, we spoke earlier about the fund’s investment product, but at this stage, we are not ready to accept assets for management from mass clients. This is absolutely unrelated to our trading strategies and analytics. The strategies and analytics have proven themselves well; this is easily verified by analyzing our early analytics on historical data. Moreover, we are constantly improving and supplementing our analytics and trading strategies with new proprietary developments, such as the Swallow AI. Our current refusal of the fund’s investment product is more related to the legal side; we fully understand the weight of responsibility for client funds, and we are not ready to manage assets without the certainty that client funds are safe and everything is legally properly formatted. But we are resolving this issue, and as soon as we settle the legal points, our clients will see investment products in the fund’s tariffs. As for earnings, the plan to sell investment products hasn’t gone anywhere, but in addition, we also plan to sell analytics and other products, such as Swallow AI, because the fund’s capabilities do not end with investments alone. And we would also like to demonstrate the quality of our models and our approach before offering investment products.

Ancap-chan: So, you are working in several directions at once: achieving the ability to accept investments, preparing your analytics for sale, and continuing to improve them. I would like to discuss where this analytics comes from. Typical analytics look like this: here is a price chart, and here is our guesswork based on the chart about where it will go next. Or: such-and-such an event is expected, it should affect the exchange rate in such-and-such a way. Your metrics, however, look completely different: here is the balance of supply and demand, here is the ratio of bulls to bears, and so on. Where do you obtain the primary data? Is it available in the public domain? Even if it is available somewhere, you aren’t looking at all exchanges, only some of them. Doesn’t this introduce distortions?

MEREXP Analytics: Correct observation; our metrics indeed differ, and there are strong reasons for this. But first, let’s analyze conventional analytics, where a price chart is built and, as you rightly noted, a kind of “guesswork” occurs regarding where the price will go. This is indeed guesswork, because such analytics are based on historical data—on what has already happened. Everything else is just assumptions and attempts to match the current situation with similar ones in the past. But even this is incorrect, because there are never absolutely identical situations; there is always a factor that can change the outcome, even if conditions seem identical at first glance. We approach the market from a different side. We analyze fundamental supply and demand data with a deep dive. It is precisely this data that forms the current market state. Of course, we also use classic metrics such as the order book, the tape, and the chart, but we need them more to understand how the market reacted to an event we already knew about in advance. We obtain this data thanks to the calculations of our analytical model. As for the primary data sources, of course, some of them are public sources. However, another part consists of our complex calculations, the result of the work of our AI and analysts. Yes, we indeed do not cover all exchanges yet, but this is sufficient, as it is well known where the main volumes of the cryptocurrency market are concentrated. Therefore, saying that a limited number of sources distorts the data would be incorrect. It would be more correct to say that it creates some margin of error, but it is so small that it does not affect the quality of our analysis.

Ancap-chan: And separately, I want to know the details regarding the use of AI. It is known that AI is used for trading robots. For example, charts are fed into it, and it invents incomprehensible heuristics on how it could have made money in the past, assuming that the same heuristic will work in the future. In other words, it’s advanced technical analysis. You don’t use technical analysis. So what application have you found for AI in cryptocurrency market analytics?

MEREXP Analytics: In fact, we have many directions for the application of AI in cryptocurrency market analytics, and many of them are at the development stage. For example, take our supply and demand indices. After forming a suitable mathematical model, we can use neural networks for forecasting based on these indices, creating a new AI-based product. It is important to note that not all AI models rely on training on historical data with the assumption that the future will repeat the past. We consider such approaches too primitive, especially for our tasks. Our goal is to develop analytical models that will work not only yesterday and today, but also tomorrow, regardless of market conditions and external factors. First, we create correct analytical models, then we train AI based on them, and only then do we get the final product. A good example of such a product is our Swallow AI, which regularly analyzes news and evaluates the current news sentiment in the cryptocurrency market. We decided to offer this product to our clients so they could better understand how the news background affects the market. Today, news is one of the most important factors shaping market movements, but far from everyone can extract, process, and correctly interpret the necessary data for their trading strategy from a huge flow of information. That is why we offer Swallow AI as an ideal solution for instant news analysis, which saves a lot of time and minimizes errors.

Ancap-chan: Do you use only trusted news sources for analysis, or can the AI also draw data from one-off third-party sources? Your analytics have so far paid a lot of attention to fiat macroeconomic data. Will the AI also analyze fiat macroeconomic news, drawing conclusions about how it will reflect on the world of cryptocurrencies, or should this analysis be done for you by cryptocurrency news agencies?

MEREXP Analytics: Yes, we use a huge number of carefully selected sources that cannot provide false information, thereby reducing the inaccuracy of our AI’s readings. As for AI analysis of other markets (fiat, stock, commodity, etc.), it is important to understand here that all markets are closely interconnected. As an example of such a connection, we clearly see the link between the price of Bitcoin and global liquidity, and this is very easy to track in our analytical reports. Therefore, we will certainly track these interconnections. Moreover, work in this direction is already underway. However, it should be noted that this is a very complex and comprehensive system consisting of many AI-based models. Each of its parts must be developed separately and integrated into a larger general model. For comparison, you can take our Swallow AI, which analyzes news. Such a model is just a small gear in a complex system. This process is not fast, but in our opinion, this approach is the most correct, since for analytical tools, quality is the most important thing, as we are talking about risks.

Ancap-chan: Out of all cryptocurrencies, your reviews only concern the Bitcoin to Dollar exchange rate. However, many trade in other currency pairs, and therefore could expect analytics for them as well, especially when it comes to “altcoin/bitcoin” pairs. Do your analytical methods work in this area? Do you plan to expand your analytics in this direction?

MEREXP Analytics: As of today, we can say with confidence that a significant share of the cryptocurrency market is concentrated precisely in Bitcoin, and this in itself is an indicator that Bitcoin data has a huge influence on the market as a whole. That is why we started with the analysis of Bitcoin and its most liquid pairs, such as BTC/USD and BTC/USDT. Certainly, we plan to expand our analytics and track other markets, including pairs with altcoins. Our software infrastructure is already ready to work with this data. First and foremost, we plan to add analytics for “altcoin/stablecoin” pairs. Regarding the effectiveness of our methods, we analyze fundamental market laws, such as supply and demand. These are analytical models that will work in any market, since any movement is a consequence of changes in supply and demand. Thus, our model is applicable not only to Bitcoin but also to other cryptocurrencies, as well as to various financial markets in general, since the law of supply and demand works everywhere.

Ancap-chan: This turns out to be interesting. First, the exchange analyst Carl Menger in the 19th century derived the subjective theory of value, understanding that the theories prevailing before that were completely inapplicable to exchange trading. From this grew the entire Austrian school of economics. Then humanity, to explain economic phenomena, became fascinated by mathematical models that had less and less connection to the real world. And now, at a new level of mathematical capabilities, you are once again bringing the very law of supply and demand into exchange analysis, which was originally formulated based on exchange analysis. Typical spiral development.

So, you stand on a strong theoretical foundation, but you are crafting practical tools literally on the fly. A good discount for early buyers suggests itself, since they are effectively destined for the role of testers of a new product that will continue to be seriously refined. What is the overall intended pricing policy for your service? Will you sell each tool separately or the whole set as one package?

MEREXP Analytics: To an outside observer, it may seem that we are “crafting tools on the fly,” but in reality, before offering a product to clients, we conduct long and painstaking work. Each tool undergoes thorough verification and testing in various market conditions. For example, Swallow was developed as early as autumn 2023, and the supply and demand indices in the spring of that same year. We pay huge attention to the quality of our products and adhere to strict, multi-level verification criteria before market release. It is important to emphasize that our clients by no means act as testers. On the contrary, we discard many tools at different stages of development if they do not meet our high standards. This is part of a normal workflow that allows us to be confident that our products actually work and meet the stated quality. Regarding pricing policy, we understand the needs of the market and know that users want to try a product first before deciding to buy. Therefore, we are ready to offer promotions, free trial periods, demo versions, and we are also preparing training materials for our products. Our tariff plans will include both separate products and package offers so that each client can choose the optimal set of tools and not overpay for those they do not plan to use.

Ancap-chan: Well, I think we’ve discussed enough for an introductory acquaintance. I’ll allow myself to briefly summarize:

  • In perspective, Merexp should become an investment fund, meaning taking money from clients and multiplying it. However, before that, you have a number of legal difficulties to resolve.
  • In order to make successful investments, you have created and continue to refine your own analytical toolkit. At the current stage, you intend to earn by providing these tools to clients, with which they can successfully invest themselves.
  • At the core of these tools lie those basic tenets of economic theory that have not yet been fully applied to exchange analysis, which makes the product unique, at least for the moment. This is primarily the analysis of supply and demand, as well as the automatic analysis of the news background using AI.
  • You plan to offer clients a flexible grid of tariffs depending on which tools they actually plan to use.

I think it’s also worth giving readers key links: to your website and other platforms through which you plan to publish your materials. Are there any other important points that we missed in the previous conversation and that should be mentioned?

MEREXP Analytics: Perhaps it’s worth adding that we have literally just launched our website. And Swallow AI, which we mentioned repeatedly today, will be launched by us on September 1st. And those who manage to purchase a subscription to Swallow by September 15th will pay 5 dollars for the first month of subscription instead of 15.

Ancap-chan: It’s a kind tradition to offer gifts for those who read until the end. Thank you for the detailed answers. I will definitely find time to browse your website and try this very AI—and then I will certainly report back.

Durov

Due to Durov’s arrest, an active discussion continues online.

For us libertarians, the position is simple: states, by their very nature, exercise aggressive violence and therefore have no right to exist. (Private individuals who provide any conceivable services that the state provides or has ever provided, but do so on a voluntary basis, do have a right to exist)

The world, however, does not consist solely of libertarians. There are numerous representatives of ideologies claiming the right of collectives to violate any conceivable rights of individuals for the sake of the benefit of these or those collectives, including such abstract collectives as, for example, “future humanity.” With them, it is sometimes possible to have meaningful discussions on the topic of “exactly how will this specific violation of individual rights help achieve your wonderful collectivist goal, and isn’t it ridiculous for you to throw so many resources at tasks with such a tiny cost-efficiency ratio, when here are far more effective solutions to your own problem with a much lower need to violate individual rights.” As soon as the interlocutor begins to angrily reject such economic analysis, the conversation can be wound up, essentially saying: come back when you’ve grown wiser; until then, there is nothing to talk about.

Finally, there are the realists. They condescendingly explain that values are called such because they have a price. That anyone can be bought. That Durov has already repeatedly made compromises with quite repulsive political regimes. And if these regimes, through threats to the creators of Telegram, easily turn it into a weapon on the side of evil, then it is foolish to demand that less repulsive political regimes not use threats against the creators of Telegram to turn it into a weapon on the side of good (or, if you prefer, the lesser evil). This position was expressed very clearly and consistently by Michael Naki in his video.

He essentially claims that, firstly, even if Durov was indeed arrested and will be accused, in violation of any legal norms, of all the nonsense that is causing so much noise online, it is justified if the result is his active assistance to the anti-Putin coalition in the war on Ukraine’s side. And secondly—that the arrest looks like a staging, and it is far more likely that Durov himself asked for the protection of the West and effectively promised assistance in the war in exchange for protection from pressure by dictatorial regimes, primarily the Putin regime.

As for what this could lead to, Michael himself concludes quite soberly: that later, so he says, Telegram will start to be used against Trump. And he immediately answers this consideration: won’t there be downsides, then? In other words, what can be applied for extraordinary reasons will easily be applied for any reason. War is a continuation of politics, and if Telegram can be brought under control in a total war, why not bring it under control tomorrow to influence the election process—why hesitate, since Trump, in Michael’s opinion, is a fascist and is just as deserving of having a total war declared against him. And the day after tomorrow, the Chinese experience is adopted—and what’s the big deal, since an honest person has nothing to hide. There are so many terrible things in the world worthy of having a total war declared against them: drug trafficking, trafficking… the state, right, Michael? Oh, what, the state isn’t on this list? Strange, strange.

Realists perfectly understand that their position is logically vulnerable because it is inconsistent. They don’t care, because logical constructs are an ideal construction, not a real one. Some momentary desires are declared by them as the highest value, others as meaningless whims; some methods are adopted, while others are only sweetly dreamed of—and the only criterion for justifying such an approach turns out to be the result. It’s fine if the result is declared in advance, but that’s not necessarily the case, as the target can be drawn around the point where the bullet hit.

What can be opposed to the realists? Only a change in reality. We have lived too long in a world of centralized systems, and therefore we are easily captivated by heroes, seeking hope now in Durov, now in Musk. But real hope is brought by another type of hero—the anonymous Satoshi. One who opens a new technology and makes it public property. We have relied on centralized systems for too long because it is fast, cheap, and convenient. And also, they can be broken quickly, cheaply, and conveniently. It is time to realize that we are not rich enough to buy cheap things.

A small centralized system competing on a free market with a million similar systems—why not. But when it comes to the global exchange of values or opinions—let’s forget about centralization. Bitcoin and its extensions—as protocols for transferring value. Nostr or something along those lines—as a protocol for transmitting statements. Some entity that has not yet gained widespread use—as a protocol for legal transactions (this function of the Leviathan must also be replaced by something decentralized). In the new world, there will be fewer heroes, and therefore—fewer possible points of failure. A hell of a lot of responsibility will not hang on one specific person. And therefore, there will be no point in arresting Durov.

But for now—let’s create hype around our hero and demand his release. Why? A strange question. Let’s be realists; it’s so fashionable. States as a means of forced unification of people must be destroyed. What will contribute more to the death of this institution—if Durov is kept in detention until he agrees to the conditions imposed on him—or if, as a result of a pressure campaign, the French state is seriously discredited and forced to release its prisoner? Of course, the latter. But even if pressure does not help the goals of liberation—that is no reason not to press. It is much more pleasant to observe a morally degraded state than a proud and triumphant one.

Law and legality in the transition to ancap

Another question about the subject was asked in the comments, and I don’t really want to answer from purely theoretical positions, because for a little over three years now, I’ve had the opportunity to try to implement something. So, I want to reflect on the problems of law and legislation in the ancap community using Montelibero as an example.

I will outline the conceptual framework I am using. Law is the order for resolving conflicts accepted within the community. Statute is a legal norm that the community considers permissible to impose by force. Court is a procedure for resolving conflicts by a third party not involved in the conflict. Jurisdiction is the venue, that is, the circle of conflicts that the community customarily resolves through a specific court.

Montelibero, like any other ancap community in the era of state dominance, cannot claim full jurisdiction over its members. Yes, any issue can be resolved within Montelibero’s jurisdiction—but only if the state is unaware of it. Otherwise, the state may impose its own requirements on what the parties to the conflict are obliged to do.

The Montelibero community is small. It does not provide the opportunity for full market competition between many diverse courts. However, this is no reason to bow before the state. After all, we have implemented tokenomics and now have our own very cheap and efficient financial system. On a single blockchain, without competition between them (we tried adding others, but they didn’t take hold). Although, privately, nothing prevents the exchange of any values: whether commodities, fiat, or various types of crypto. The same applies to courts: by mutual agreement, disputes can be resolved by a coin toss, mediation by a pre-agreed authority, or a duel—but if there is no agreement, one must rely on some unified default judicial mechanism.

Every jurisdiction is subject to a strong positive scale effect: the more conflicts it resolves, the more potential conflicts will specify this particular jurisdiction in advance. This is understandable: people save mental effort and will not keep many different legal mechanisms in mind without particular need, eventually leaning toward a single option, even if it is not the most optimal for a specific case. There are also negative scale effects: even the most efficient judge is unlikely to be able to significantly increase their productivity and will more likely raise the price as demand increases. Therefore, to scale this type of service, it is convenient to use a franchising mechanism: judges may differ, but they will use a single procedure and uniform legal norms.

Where would these come from? The Schelling point here is the procedures adopted in the hosting jurisdiction, that is, in the Montenegrin courts. Why? At least because that is where those dissatisfied with a Montelibero court decision will theoretically turn. But since the local legislation is full of various statist rubbish, it must, of course, be discarded and replaced with our own home-grown concepts. There are few basic principles in libertarianism, but specific legal norms that do not contradict them can vary. And here, precedents will become the Schelling points. It will be easier for each subsequent court to apply a previously used norm than to invent a new one for every new case. Moreover, it will be easier for all members of the Montelibero community to proceed from established legal practice, as predictability in affairs is the foundation for trust.

But, as is known, it is not enough to understand if the laws are good; one must ask if they are enforced.

While judicial practice is limited, one must rely mainly on the conscientiousness of the parties and the informal authority of the judge. The potential ability to turn to the state for enforcement of court decisions is relevant only for the largest cases, where the amount at stake justifies the accompanying costs. In the smallest cases, the losing party will pay without question because the amount is trivial. The problem lies in medium-sized cases, where invoking state enforcement is still too expensive and disgraceful, but the losing party is reluctant to pay.

The most civilized way to achieve the enforcement of court decisions is the widespread use of collateral. I envision a gradual evolution here from one-time deposits to secure a specific claim, to permanent deposits confirming a willingness to comply with the decisions of a specific jurisdiction.

Initially, it might work roughly like this. A community member wishes to enter into a legal relationship with another member. For example, rent a car or an apartment, borrow money, or enter into an employment contract. In addition to the direct contract between the counterparties, they also notify the court and transfer collateral amounts to a court-controlled account, the size of which depends on the amount of liability imposed by the concluded contract. Then, from this collateral, a penalty can be recovered—for example, from an employee for damaging equipment, or from an employer for an industrial injury caused by their fault.

But gradually, as the court builds its own reputation, deposits will become permanent: you recognize the jurisdiction of the MTL court and place a certain deposit on its controlled account—a sort of “price of honor,” in ancient Irish terms. Now anyone can be sure that within the limits of the price of honor, you can be trusted unconditionally. Want to increase your reputation—simply increase the deposit. Leaving the country, or, say, the last court decision caused your distrust—decrease the deposit. Leaving the jurisdiction—withdraw the deposit entirely (with some lag to ensure you have no debts from old contracts).

Moreover, based on this solution, an institute of suretyship could develop, where a guarantor increases trust in the person they vouch for by risking their own judicial deposit.

It would be great if increasing the price of honor contributed to respect within the community, but such an attitude will not form on its own—first, a tradition of involving people with a high price of honor in responsible legal relationships must be grown, for example, as witnesses to large transactions or plaintiffs in socially important cases. Also, a mechanism for increasing another’s price of honor through the payment of judicial deposits into another’s account could certainly appear—if a person’s personal integrity far exceeds their financial capabilities. The result would be something like a Hoppean natural aristocracy.

And, of course, this entire mechanism will work much worse if it turns out that there are a large number of community members who completely ignore it, yet enter into legal relationships with each other in the same way. They may be too poor to freeze money for the sake of reputation. They may not trust a specific court. And finally, they may not trust the mechanism itself.

The poverty factor is handled to a certain extent through suretyship mechanisms. The factor of distrust in a specific court—through competing courts. The factor of distrust in the mechanism—simply a matter of habit. Trust is built; one just must not try to impose it.

Internal conflicts of volunteer organizations

Not long ago, I published a long post Internal Dynamics of Libertarian Communities. Among other things, it mentions the danger of “beastly seriousness” over trifles:

Subconsciously realizing the certain comicality of their position, the disputant, in a polemical frenzy, begins to accuse opponents of violating even the most basic value principles.

And just recently, I received a direct message:

I believe that the current Secretary has exceeded their authority. The Council is unable to resolve this crisis on its own, as some Council members support the Secretary’s actions, while others remain indifferent to what is happening. This is not an isolated case that is being questioned, but this particular case is already egregious.

What is this egregious case? It turns out a Telegram chat admin enabled slow mode in the chat. Why slow mode is needed in a chat of two dozen people, I have no idea, but this case perfectly illustrates how easily, in a purely voluntary organization, people take offense at the slightest manifestation of disrespect from those endowed with certain technical powers.

And here is another case, a public one—and also indignation directed at the secretary: one of the MTL-court judges removed the court secretary from handling a case because the secretary, in the judge’s view, handled correspondence with the parties incorrectly and also for some reason was present in the chat where the judges were discussing the case. And the secretary, instead of stepping down, stayed put; instead, the judge was removed.

This pattern repeats constantly. What is required for it to emerge?

  1. An organization consisting of volunteers
  2. The presence of a sole administrative position within it
  3. The administrator having technical capabilities to restrict the rights of other organization participants.

That’s it. Sooner or later, a situation will arise where the administrator begins to interpret their functions broadly and applies their technical capabilities in a way that restricts the rights of other organization participants, and some participants will view this action as an abuse of power.

If the organization had paid employees, the administration’s actions would be perceived more calmly (any whim for your money). If there were a whole board instead of one administrator, one could appeal to one member to roll back the actions of another (also a very rich class of conflicts, though far less acute). Finally, if the administrator lacked technical capabilities that could be abused, it would be much harder for them.

Let’s leave point 1 alone, because conflicts in hierarchical commercial organizations can be discussed by Bitarch and Voluntarist.

Point 2 is much easier to overcome. If the group is small and consists of formally equal participants, then everyone should be made an admin (if some participants have a sort of probation period, admin rights can be granted after its successful completion)—this serves as a visible confirmation of mutual trust within the organization. Alternatively, one could do without admins entirely.

As for point 3, it depends too much on the chosen communication tools. In Montelibero, Telegram is used almost exclusively for this. In it, the only way to disable technical administration capabilities for a group is to create it using a service account, add participants, and then remove the creator from the group. In principle, this is also a solution for a small, tight-knit group that wishes to communicate strictly on business and does not want to lose internal cohesion over someone’s wounded pride.

Of course, administrators are useful. But that is exactly the line of reasoning that etatists use to explain the utility of the state. No, the utility comes not from administrators, but from a tradition of respecting colleagues. Applied to working groups, this means self-restraint regarding off-topic posts and communication style. If such a tradition is established, an administrator is not needed. If it is not established, it cannot be implemented by the strength of one administrator alone. In any case, the goodwill of the other participants is required.

Network State — it’s over!

So, it has happened. The final, and key, chapter of The Network State has been translated. In it, Balaji explains in detail:

  • What a network state is (this is Montellibero, which received diplomatic recognition from El Salvador);
  • What happens if you remove one of the parts from the definition of a network state (in most cases it will break, but if you remove the point about the need for a dictatorship of the network state’s founder, it will be even better—roughly speaking, Bitcoin instead of Ethereum);
  • That digitalization is penetrating everything and it is impossible to fight, and a network state is precisely a way to lead the process, instead of fighting directly against the digital gulag of centralized nation-states;
  • That the startup community, if it aspires to develop, needs a high level of internal trust, and pleasant bonuses would be visible demonstrations of solidarity (for example, the MTL-fest) and the absence of public flame wars;
  • That tokenomics is cool (but Balaji focuses on the community’s internal currency, although having one’s own unit of account is a secondary matter; the principle of public recording of monetary and social obligations is far more important);
  • That it is extremely important to scrounge the first diplomatic recognition from anyone, even from Nauru, and then it will be easier;
  • And he throws in various technological ideas for connecting offline with online, through which you can feel that the person thinks based on a paradigm of abundance of capital goods—let’s be happy for him.

If anyone hasn’t picked up the book yet, now is the time. I don’t see much point in making an audiobook out of it—there are too many external links, many of which are quite interesting to browse. For the same reason, it’s unlikely that the text will be produced in epub format—such a book should be read while online, and preferably in a browser anyway. The author promises to update the book periodically. If anyone follows the updates, please send me links to new pieces of text, and I will update the translation.

And for now—thank you all for the long wait, the channel is now officially coming out of vacation. I’ll need to scour through to see if any interesting questions from readers have accumulated, write a new article for Hedgehog, and it’s about time to finish the translations of Mac and Molinyu, for goodness’ sake.

P.S. Readers quickly generated a pdf. It’s not without flaws—internal footnotes have become external links—but overall it’s perfectly suitable for reading.

Internal dynamics of libertarian communities

This will be a long-form text in three parts. It was written by request of Soz, for a donation of 50 EURMTL. The work took nearly a full month. For ordinary questions with attached donations, this is indecently long, but I recall that back when Bitarch didn’t yet publish on my channel himself but commissioned me to write long-reads, the pace was comparable. Unfortunately, I struggle to keep large concepts in my head, so as the volume of the task increases, the working time increases in a clearly non-linear proportion: a couple of days for a Telegram-format post, a month for a long-read, a year and a half for an 84-page book…

The task from the client was formulated not very clearly, but it amounted to creating and presenting a conciliatory narrative for the Montelibero community, which is currently experiencing internal friction due to differences in approaches to achieving the movement’s goals.

It seemed appropriate to me to expand the topic slightly, but not so much that the final recipes would be inapplicable to the specific community.

Part 1. Why don’t libertarians like contracts?

There is an opinion that libertarians adore contracts and almost pray to them. This is not true. Libertarians, for the most part, have a fairly ordinary system of values, and therefore they do not like contracts. What they love, like all normal people, is an atmosphere of openness and mutual trust. Anyone who claims otherwise most likely loved it once too, but their trust was betrayed.

What is trust? It is the conviction that the counterparty will sincerely defend your interests, and if they conflict with his own, he will still try to take yours into account as much as possible, and if necessary, occasionally compromise his own. Openness, on the other hand, means that the counterparties provide full and reliable information about their interests and other facts related to the subject of interaction. How could one not love this?

This is precisely why libertarians prefer to gather in communities. In a circle of people sharing common values, trust is usually higher, and if these values are libertarian, then—especially in business matters—mutual trust may, to an outsider, even border on naivety.

A contract, however, is a product of mutual distrust. Please state exactly what you will demand from me and what you are ready to give me in return, and what tools we have to compel each other to comply with what is written. And further clarify the meaning of the terms, so that it doesn’t emerge in court that you meant something completely different from what you hinted to me…

It’s not that libertarians completely neglect contracts when making deals among themselves, but usually it is just a brief summary of a chat conversation, purely so as not to forget: I borrow so much, for such a term, at such a rate, payments in equal monthly installments on the first of the month. The higher the trust, the more nuances are left out.

Trust in deals and the ability to rely on people to defend your interests is a huge treasure, as it reduces transaction costs to a negligible minimum, and thus ensures maximum market efficiency. But this treasure, unfortunately, is very fragile.

Trust can be destroyed by a fraudster. This is a very banal risk, and it is partially mitigated by simple tenure in the community. The longer a fraudster is forced to maintain an impeccable reputation to gain trust, the larger the deal he needs to scam the counterparty and ultimately still end up in profit.

But trust can also be destroyed by a pedant. Someone who, in a libertarian community, will demand as detailed a contract as possible, and then start insisting that it be followed to the letter—is a repulsive counterparty. He literally positions himself as an outsider, saying that you are all suspicious types ready to scam anyone at the first opportunity. Therefore, here are ten pages of fine print in tooth-grinding legal jargon, now let’s go get it notarized, and here we have a state court specified, and here is the penalty for delay, and so on and so forth.

Therefore, libertarian communities tend to reject both fraudsters and nitpickers, striving to preserve the innocent simplicity of trust-based relationships. But consistent rejection also requires conscious and unpleasant effort. A fraudster can be charming, and if he hasn’t personally scammed you, there is a temptation to continue being friendly with him. A pedant can be a strong professional, and this provides an incentive to tolerate him despite all the discomfort of communication.

Therefore, in real libertarian communities, complete ostracism is rare. Usually, a community member who causes repulsion is simply pushed to the periphery. There, he can either reshape his behavior and over time return closer to the core, or remain in the vague status of a partial outcast, or leave the community of his own volition. So, libertarian communities are quite resilient to problems with individual people, and these do not have a noticeable impact on the atmosphere of trust. However, another phenomenon is far more dangerous. A split.

Part 2. Why don’t libertarians like corporations?

There is an opinion that the world of victorious libertarianism is a war of corporations. Having read the first part, it is easy to conclude that this is also not true. But it is not that simple.

Communities whose members share libertarian values are capable of having a very high level of internal trust. However, libertarian communities usually have not only values but also goals. Their members do not like the outside world, where freedom is quite poor, and they strive to somehow combine the efforts of community members to influence the outside world and make it freer. This noble aspiration, alas, is capable of leading to rather sad results.

In order to turn a community into a movement—that is, to prompt community members to achieve a certain goal—this goal must be either quickly and verifiably achievable, even at the cost of serious effort (for example, a movement to abolish some repressive law), or easily broken down into stages that obviously bring one closer to the final goal (for example, a movement for EU accession, for which there is a checklist of requirements).

However, it may turn out that the goal looks tempting but suffers from a lack of specificity in implementation (for example, making Montenegro a free country). In this case, several movements may arise around the goal, differing in their ideas of exactly how this goal is achieved. For example, part of the community decides to focus on political transformations in Montenegro, and another part on building an economy independent of the state. And another part declares that it does not wish to adhere to the proposed goal and is satisfied simply living in accordance with its values (that is, remaining just a community).

The situation is exacerbated if certain activities of the movement appear from the outside not only as not bringing it closer to the declared goal, but as completely contradicting it. For example, if the goal is a free society, then any regulations of communications and business relations can easily be declared as contradicting the final goal, even if they perform an important tactical task of lowering the heat of conflict in a dispute or improving coordination in a working group.

Add to this the natural isolation of participants of one movement from participants of another movement—and soon we will inevitably see that the level of trust between several movements within one community has decreased, despite the continuing unity of basic values.

This isolation is further strengthened if a movement is formalized into a corporation. What was simply the coordination of people united by a goal has become management procedures, delegation of authority, setting tasks for working groups, accounting and control—in short, the methods familiar to all of us for making an activity more efficient.

Against the backdrop of such complication of the primary community, those who try to return to the happy past, criticizing the present, are perceived as gloomy retrogrades denying any movement toward the goal.

Thus, a relatively homogeneous community cannot move in a coordinated way toward any complex goal. But with the appearance of structures for achieving complex goals, it, firstly, still cannot move anywhere entirely in a coordinated manner, and secondly, it also loses the atmosphere of trust. What is to be done?

Part 3. How can libertarians maintain a balance of trust and efficiency?

It is quite easy to determine from the outside how great the internal unity of aspirations is in a community. If they argue about fundamental questions, then there is no unity. It is simply a discussion platform, a community united by the value of discussion as such, not its subject. If, however, disputes are over trifles, it means that agreement on basic things was reached long ago; it isn’t even discussed. This does not, however, make disputes over minor details less ridiculous and potentially less destructive.

The devil begins with the foam on the lips of an angel who has entered the fight for a holy right cause. The best path to a community split is animal seriousness in trifles (recall the pedant from the first part). Subconsciously understanding the certain comicality of their position, the disputant in a polemical frenzy begins to accuse opponents of violating basic value principles. Thereby making it clear that they perceive opponents as strangers who somehow ended up in the community.

Therefore, the first rule for a libertarian community that does not want splits is: everyone here is a libertarian. That is, they agree among themselves regarding the basic principles of their ideology.

The second rule develops the first: do not demand ideological purity from others. One can call oneself not just a libertarian, but an agorist. One can gather a bunch of agorists around oneself. But claiming to other libertarians that, for instance, you are not agorists and therefore are latent etatists is a bad idea.

The third rule generalizes the second: excessive detailing is harmful. The more detailed some description, some contract, some charter, or some rules are worked out, the more likely it is that reality will not fit the description, rules will be violated, and the charter will be interpreted based on immediate benefit. A good document is brief, evocative, and strives to capture precisely the spirit of what one wanted to express.

The fourth rule develops the third: an alliance is better than a merger. If a certain group can exist autonomously—let it exist. If it faces a task that it cannot handle on its own, let it enter into an alliance with other groups. If, instead of solving the task, the groups start merging into a single organization to solve the task, all the momentum will be spent on arranging the merger process.

The fifth rule is an antithesis to the fourth: do not judge what is better for others. If, for example, some groups have already merged into something that seems unnaturally large, there is no need to panic and declare war on them. Either they are fine with it, or they will eventually split up on their own. It is better to contact individual members of that group, applying the fourth rule.

One could continue to fantasize, but five rules are already a lot, see the third rule. Therefore, I will limit myself to what has been stated, and in conclusion, I will briefly summarize all three parts of the text.

  1. Trust is what libertarians unite for in communities. Trust must not be destroyed, otherwise the community loses its meaning.
  2. Organization is what without which a community will not move toward a goal. But organization devours trust, and thus destroys the community.
  3. A balance between trust and efficiency is possible, but it is not achieved automatically. One can formulate several rules, the observance of which will help maintain the balance.

Do not be your own enemies; we already have enough enemies from the outside.