Sealand, HavenCo, and the Rule of Law
illinoislawreview.org
illinoislawreview.org
The summary of this over at Ars Technica is great too. (http://arstechnica.com/tech-policy/news/2012/03/sealand-and-...)
He had better insight into the legal issues than we (or any of the lawyers we talked to) did.
I still think it failed primarily because the economics changed under our feet (prices went from $2-3k to $20-30 within 2 years), and because we didn't raise enough money. The team could have been a bit better (and would be, today; I was like 20 years old back when we did this, and none of us had done a traditional startup before), but the brick wall we were up against on pricing and financing was pretty much a deal killer.
I don't think any of this is strong evidence against a similar effort working today (not an offshore platform for hosting, but cryptographic systems, or offshore for HR/visa compliance, or just for cost advantages).
The basic strategy of trying to push only a single challenge (technical or legal or whatever) vs. trying to innovate on everything at once, is valid.
I think eventually some smaller nations will catch on and become secure offshore data and processing hubs, just as today there is an entire economy around offshore finance. We will probably look back at DataCo as being a few decades ahead of time.
Do a good job of articulating socially good uses. PGP to protect you from spies is unrealistic, PGP to protect you from the law if you are a criminal is both unrealistic and bad PR, but filevault to protect my SSN when your laptop is stolen, that's a much easier win -- it's just hard technically and inertia, but those are easier than active political or legal opposition to overcome.
In parallel with that, try for political change, ideally using tech as much as possible to support that -- I wasn't an Obama voter, but what the 2008 campaign did with social media was transformative.
If all those fail, sure, consider doing something crazy like Sealand or offshore corporations or whatever, but ultimately I'd rather live in a first-world country WITH good laws, than something with technical or jurisdictional hacks.
Let's say cost is not an issue - some people with deep pockets have things they think are worth it to host outside the law, and will pay you with bitcoin (run through a bitcoin pool operating on the extra-legal territory itself).
How do you get around the fact that all your internet links will be run by companies in real countries subject to legal orders?
How do you get around the fact that any ragtag band of pirates can board and take over your "island" nation? Do you hire a team from G4S to guard your ship? G4S or any other security entity would be subject to laws and court orders, too.
If it's not a ship, but an actual island, you still have most of the same problems. Even if it's populated to provide some measure of physical security (you can't bomb an island with innocent civilians on it without a lot of bad press, not that other governments would need to bomb to shut you down), won't the existing government care more about protecting tourism and/or the interests of the natives before they care about protecting a data haven?
For transaction processing systems which need to be durable, I'd go with something with multiple levels of indirection on the network, using links which are locally secure for short periods of time. Sort of like tor/onion routing with hidden services.
You might still put your processing nodes in a concrete fortress of some kind, but they're basically anonymous data processing equipment. Use tamper-resistant technology and the worst that happens to them is denial of service.
The point of having a published high profile physical location (like Sealand) is to claim jurisdiction there, and thus get some legal benefits in interacting with other jurisdictions. To the extent that everything can be done on the Internet, you don't particularly need that.
Wars happen all the time, and you have no military of your own.
I guess losing the fiber optic link kind of ruined that. Or, you know, having to put your customers' data into a Zodiac to hang out on a plank of metal in the sea.
We planned to raise $3-5mm plus followon financing, and ended up raising only $1.5mm or so, most of which was spent on mechanical/life safety upgrades to the facility -- we didn't have a whole lot left for datacenter. Losing the 155Mbps link was a big problem -- the best we had was 4xE1 (8Mbps), some caching/CDN, and 128-512k of satellite. Thus, our costs never dropped the way we wanted, so we couldn't really be price competitive.
Wired has a 3-6 month lead time, so the Wired article actually got written while we were first looking at the buildout. This happened to overlap with the collapse of the dotcom bubble.
How far down did the towers go? Was the entire hollow space within them basically inhabitable (if uncomfortable)?
During the war, those towers were where people lived, and the lowest levels were shell magazines for the big AA guns (3.9"?). They had a bigger superstructure, too. I absolutely would not have wanted to have been there with 300 people; even with 6-10 it was pretty bad.
Having new machines shipped out also seems like a better proposition from a risk perspective, since hardware isn't cheap, but it's a whole lot less than some irreplaceable customer hardware, software, or data.
Seems this submission is getting a lot more traction than my one 12 hours ago. http://news.ycombinator.com/item?id=3764331
But given the way certain nations have been behaving of late, having your own nation may not make much of a difference.
The fantasy business model would be to be rich enough to be able to personally cover these costs and establish a high tech R&D environment :) I'm not suggesting that this is actually possible, it's one of those things - what would I do if I had Bill Gates kind of money.
(And by the way, not trying to rain on your parade; on the contrary, I find this discussion fascinating, so thanks for starting it.)
History teaches us that there will always be hold-outs and that the most effective way to achieve this goal is through brute force. This is how the U.S. base in Diego Garcia came to be. The islanders who lived there were forcibly deported from their homes in the 1970s by the British who owned the islands.
That's assuming you want them all of the island and that you need everyone's consent to take over, you just need the majority to be take power trough democratic process and the few that wish to remain could be employed/incorporated in to the state.
I recently read a fascinating book called "Miles from Nowhere" which described life in the least populated counties in the U.S. One recurring theme is that counties with almost no one living in them are subject to being taken over by groups with their own agenda. For example, a county with only 150 people in it might be the target of a group of libertarians. 800 libertarians may agree to move there to set up a libertarian government. The point the book made was that virtually uninhabited is very different than uninhabited, and that there are still people there who have wishes, dreams and rights of their own.
So what you are describing is actually an act of force. Overtaking Nauru for your own purposes is a unilateral destruction of someone's home. Imagine for some odd reason the entire population of China decided to buy out and relocate to your city and turn it into a Chinese culture and economy. You may have nothing against the Chinese or Chinese culture, but you may wish to simply keep your home city as is.
Democracy is often thought of as peaceful, but it can often be a vehicle for the majority to disregard the legitimate needs of the minority.
But that's the system they already live in, I wouldn't change that, I would just use that system to achieve my goal. I agree that it's not completely moral but that's inherent in democracies, even with constitutions protecting the minorities, they will always be subjected to mob rule.
Pity there's no Kindle version:-/
If you like geography, this book is a good read. It's a bit dated, having been written in the early 1990s, but this, in my opinion, turns out to be a good thing. It gives us some great glimpses of how isolated these communities were and I'm sure the Internet has since changed this considerably.
But I don't have any right to do that. I only own my own home/property; 'my' home city as a whole doesn't belong to me. Attempting to control what my neighbors may do with their homes and what kind of social arrangements they'll be allowed to participate in, to the point of trying to exclude entire ethnic groups from settling within some arbitrary boundaries - simply because I feel some personal sense of propriety over what doesn't actually belong to me - is the more direct and clear act of brute force here.
> Overtaking Nauru for your own purposes is a unilateral destruction of someone's home.
No, it isn't. Unilaterally destroying someone's home is a unilateral destruction of someone's home. Purchasing people's homes with their consent, and leaving alone those who don't want to sell, isn't destruction of anything.
For example you can sign a contract to waive your rights to anual leave but its invalid and unenforcable.
If you want to do that with your own billions, have at it. But I wouldn't want to locate a business there, do business with you, or even go to work for you, an employer from whom I could have no possible legal recourse in the event of a dispute.
It sounds like you are risk averse and probably don't share the goals, wouldn't be swayed by the value proposition - so you wouldn't move there. It's true that there would have to be trust in the person doing this, but I'm assuming the billions didn't drop from the sky and I have done something to earn them, the process of getting them should provide plenty of material to evaluate my trustworthiness. Trusted third party insurance is also an option.
That part is easily solved: the dictator can put up a bond in some trusted country. The bond is forfeited if the dictator betrays you. The contract laws of the trusted country apply.
It could be that some enterprising dictator could gain a better reputation for respect of property than the US government[1]. A reputation for respecting property rights, combined with a country, is an extremely lucrative asset, and it would be costly to lose it.
> As a business owner, I then have the choice of doing my business in a major Western democracy with an elected government
If moonchrome can offer a better regulatory environment, you might prefer to do business with him. Maybe your business is melanoma detection. HN user danifong approached YCombinator with that idea, and Graham told her[2]: “The trouble with the melanoma detection idea is that you’d spend most of your time dealing with legal and regulatory crap. That sort of work doesn’t really take advantage of your skills.”
[1] The USA has questionable regard for property rights, e.g. http://en.wikipedia.org/wiki/Kelo_v._City_of_New_London
[2] http://daniellefong.com/2010/02/11/how-law-shapes-the-busine...
For example, requiring a dictator to post bond is all well and good until he decides at some point while you're within his borders that he's going to (a) kill you, in which case collecting on the bond won't you much good, though it will soften the blow for your investors, or (b) start cutting off toes and fingers until you release the bond. (Obviously you could structure the bond in such a way that option (b) is unworkable, which means that it either becomes a straight up hostage ransom situation, or reduces to option (a).)
Even given all of that, you're right that it still might make sense to do business there for a particular kind of business given a particular risk tolerance. It might well be an experiment worth trying. By the same token, if you develop a new kind of versatile routing software that does an especially good job of finding the optimal approach to trying to route materials past someone who is actively trying to stop you, selling it to Mexican drug lords might be an experiment worth trying. Just make sure you have a really good idea what you're getting into and that the risks to your person as well as your business are worth it to you.
It is a clear exposition on why people need to engage their local institutions to change the law to meet their needs, rather than to try to create from whole cloth new institutions. When folks argue that changing the law of the land is 'hard' I do not disagree, but when they say creating something new from scratch is 'easier' I do. Like a manager who just sees the effects of the software and not how it achieves those effects, creation tends to look easier to the ignorant than to the experienced.
Anyway, there are great lessons to be learned in the story of Sealand.
A series of small cases with a 12 volt auto plug, a small fanless computer, some batteries, and a 3G wireless connection. Hire some vehicle operators to keep it plugged in while they are moving. Once started, they will need a daily activation code to keep operating, otherwise they erase their hard drive encryption key and deactivate, requiring their encryption key to reactivate.
The small cases will constitute a low-powered cloud with no permanent address. If a case is seized in a raid, it becomes inactivated.
Granted. I was just thinking of what could be done with off the shelf parts.
I think the scheme can stymie anyone without a wiretapping or a search warrant. Eventually, the law will change to adapt.
How will you manage what addresses they are accessible on?
Steganographic messages posted on darknets over TOR.
Heck, you even made your data trackable down to a few meters by using GSM.
My design goal is to let the authorities eventually shut down the operation, but still deny them any information when they do. I think that's as far as one can practically go with off the shelf hardware.
I suspect there's a fair bit of USAID, DOD, etc. funding available to make reliable systems like that. It would also be great post natural disaster, some kind of automated repeater and bulletin board system which works with an existing base of smartphones.
Might this be an idea for the future of DNS and highly-independent web hosting in some form? No cooling problems for shure!
Of course, there's the minor issue of a connection to the wired internet...
I want a .orbital TLD!
Forget the "cloud" how about "space"?
Hmmmm, isn't there a prominent web entrepreneur who's building a rocket company?
And if your orbiting data haven is objectionable enough there's always http://en.wikipedia.org/wiki/Anti-satellite_weapon
In real terms that means any country could shoot your satellite out of orbit regardless of whether you're obeying any given country's law or not.
* It stays independent.
* It obtains a sustainable population.
* Commercial independence. Not just as a "data haven", but hydroponic food production, and stuff being built there (possibly just IP, but more than just what you get from legal arbitrage).
* A functional community, with a rule of law.
Not too likely. The platform is simply to small to support any of this.
(our plan was actually to use Sealand to get press, and then develop both technical means like anonymous ecash, and political means (going to various neutralish countries to try to sell them on the idea), which is why we did such a big PR campaign)
eg. Switzerland, Lichtenstein, Monaco, the Channel Islands, most of the caribbean etc. The US could probably manage to shut any of them down if their 'customers' didn't have so much political clout in Washington
The difficulty is going to be getting enough customers who donate more to US politics than the MPAA/RIAA
SEALAND IS AWESOME
The location and structure itself I mean. What a sweet pad that'd be. Sure, it makes no sense from an economical standpoint. Or if you value safety. Or any logical reason really. But it's awesome.
That is all.
(Ryan Lackey was founder of HavenCO.)
HAHA edit: RDL is already in this thread! I sent before looking at the comments :(