Abstract
Hans-Hermann Hoppe argues in several books1, articles and interviews that Liechtenstein represents the optimal size for a state and that he can imagine a Europe
made up of “a thousand Liechtensteins”. His reasoning combines libertarian political theory, historical precedent and economic logic.
In foreign affairs, these micro-states should be neutral: “small state – small wars; big state – big wars.”
Yet a small state can still be attacked by a larger neighbour, because states naturally tend to expand and entrench their bureaucracies. This yields a dilemma: stay small and risk conquest, or grow large and risk destructive wars. Is there an optimal state size? Must an optimal administrative unit necessarily be small?
Can we design a self-adjusting system that allows administrative units to emerge naturally at the right scale?
We propose a thought experiment—a fictitious project for the self-creation of administrative units driven by economic strength. We expect many such units to converge on the scale of contemporary Liechtenstein.
The rebirth of an acient theory of the value of money:
A major monetary innovation has recently emerged: decentralised digital coins created by strict mathematical rules and outside the control of any state—Bitcoin.
In 1588 the Florentine gentleman Bernardo Davanzati published Lezzione della monete (Discourse upon Coin), the first coherent theory of the value of money. Davanzati argued that if we divide all valuable goods on Earth by the available monetary metal, we can deduce exchange ratios between commodities and units of money.
Ludwig von Mises2 dismissed this approach as “in no way supported by facts” and instead developed a theory of monetary value rooted in the commodity nature of money and his Regression Theorem.
Bitcoiners, however, use a Davanzati-style calculation: they divide the world’s total long-term capital by 21 million bitcoins to estimate the potential price of one coin—or they divide 21 million by the world population to illustrate Bitcoin’s scarcity.
Similar reasoning appears in Crusoe-style economic models: if five fish trade for $100 and the money supply doubles (ceteris paribus), the price of one fish rises from $20 to $40.
If Bitcoin’s price appreciation reflects a correct understanding of monetary value (rather than pure speculation as many oponents highlit), then Davanzati’s principle may guide reforms in fields beyond monetary theory.
Reconstructing Society
There have been numerous attempts to reorganize various social structures. Bitcoin, as mentioned above, is one such attempt—aimed at reforming the fiat-based financial system by replacing it with a decentralized alternative. Most efforts have followed a direct and straightforward path: establishing Bitcoin as legal tender in self-governed zones located in jungles, on remote islands, within existing states where seemingly favorable politicians hold power, or even by founding entirely new states.
However, these efforts are likely to fail, as such approaches inevitably come into conflict with the existing system. If certain states do adopt Bitcoin as a reserve asset, it will likely mean only one thing: the state will further consolidate its power over individuals—along with all its existing deficiencies.
DeLiecht (decentralised Liechtensteins)
We outline a fictitious framework—DeLiecht—for the spontaneous formation of coherent administrative units financed through Bitcoin.
DeLiecht (pronounced /delikt/) is a parallel tax system built on Bitcoin. Each node is an open-source wallet tied to a specific location—city, region or state. DeLiechters /delikters/ pay an agreed monthly amount of satoshis (e.g. 1 000 sats) to the wallet associated with the area in which they actually reside.
Payments must originate from the same location, proving residency. Spending requires a multisignature (multisig) transaction approved by 51 % of participants.
As fiat collapses and Bitcoin strengthens, shared wallet —where spending requires collective consensus—may prevent catastrophic scenarios, such as individuals fighting over food and foster cooperation.
DeLiecht nodes will accumulate value and attract banks, service providers and construction firms. Over time, decentralized “Liechtensteins” will emerge.
A DeLiechter must understand that from now he will live in the society where his vote is important. He should sign the transaction in the location where it will be decided how the collected resources will be used.
Description:
DeLiecht is an ecosystem composed of designated wallets, each linked to a specific geographic area. Residents of these areas contribute regular amounts of sats to their respective wallets. The following are key principles for how such a system could be designed:
- A reliable and coherent system for generating wallets must be developed, with each wallet clearly associated with a specific area — for example, a wallet for New York, a wallet for Paris, or wallets for entire regions or states. Natural selection will determine which wallets gain prominence.
- Anyone should be able to easily verify that a wallet is legitimate and part of the official network. Wallet creation should be simple and decentralized, without the need for an issuing authority.
- While various unofficial alternatives may emerge — much like altcoins emerged after Bitcoin — the official wallets will ultimately prevail, just as Bitcoin did.
For example, DeLiecht wallets can be generated using a combination of the city name and its official
GPS coordinates. This ensures uniqueness and verifiability. A SHA-256 hash of the string “New York
40.730610, -73.935242″ yields: feb6b68e57b;2dcf8acb363a991a19e846894d9c75030699b88676951a30e62
Similarly, the hash of “Paris 48.864716, 2.349014” results in:
983a933a80ddd719d7fcba7dbbbbcc3281446c0ed24080c4e810cd328902ae69
This method provides a decentralized and tamper-resistant way to link wallets to geographic
locations.
- A reliable system must be developed to grant payment access exclusively to individuals residing in the corresponding area. Initially, this can be based on official records — for example, a registered permanent address or cadastral data confirming property ownership. Each individual may belong to only one DeLiecht node; multiple “citizenships” should not be permitted.
- Residents of a given area can begin contributing a regular, predetermined amount of sats to the designated wallet of their city, region, or state — for example, a default starting amount of 1,000 sats per month. A reliable system must be developed to ensure that sats can only be sent from within the corresponding geographic location.
- In other words, you cannot send sats to the Tel Aviv wallet if you are located in New York. Contributions must originate from the location where the sender resides. This ensures that individuals understand that they are investing in the community they live in.
- This mechanism also prevents support for regions where the contributor does not reside, and discourages nomadic behavior incentivized by current systems. In effect, individuals will be encouraged — or even required — to commit to a specific location.
- Wallets will be created spontaneously. If one lives in a large, homogenous area, it is likely that a broader DeLiecht node will emerge. In contrast, in areas with significant ethnic, religious, or natural divisions, multiple DeLiecht wallets may arise. In such cases, individuals will align with the node they most closely identify with.
- Accounts are fully transparent — anyone can see how many sats are being received. However, DeLiechters remain anonymous as they hold private and public keys, following the same principles as current Bitcoin wallets.
- Sats sent by DeLiechters are non-refundable — once contributed, they cannot be reclaimed. This mirrors the nature of today’s tax systems, where payments are final and not subject to reimbursement.
- By making regular payments, you contribute to the credibility and reputation of your location — a key factor in attracting future service providers, new residents, and investment.
- If you relocate, your record of past payments moves with you as proof of reputation — any location will value a reliable contributor with a verifiable history. A system for admitting foreign DeLiechters must be developed. For example,
every six months a vote could be held to determine which interested foreign DeLiechters will be accepted and under what conditions — including the level of influence they will have in signing transactions. - Your children will have accounts derived from yours — creating an incentive to build strong families with reputations that endure across generations. A functional and transparent system of inheritance must be developed to support this continuity.
- Records are encrypted — but at any time, you can use your private keys to prove your identity. Once verified, you may choose to return to anonymity at your discretion.
- Funds can be accessed only through a multisig system requiring at least 51% approval from the corresponding DeLiechters. This threshold can be adjusted depending on the nature of the node — in some DeLiechts, a higher or lower percentage may be more appropriate. Individual signatures may be grouped into clusters, with final authorization granted by a few designated cluster signers. If several attempts of approval fail, the algorithm imposes stricter conditions (e.g., higher interest rates, etc…) to encourage consensus by repeated signing among DeLiechters.
- The longer a person has been contributing, the greater voting power he holds within the multisig system.
- To achieve a higher rating, a DeLiecht node must receive approval from neighboring nodes. This prevents scenarios where, for example, DeLiecht1 builds a road toward DeLiecht2, but DeLiechters in DeLiecht2 refuse to construct their section —leaving the road unfinished and ending in a field.
- Approval from neighboring nodes is essential to strengthen the network of connections and foster cooperation among DeLiecht nodes.
- Conflict zones will be subject to stricter conditions, as defined by the algorithm—for example, in areas like Israel–Gaza. Over time, this will naturally lead to an outflow of DeLiechters to more stable regions.
- Additionally, DeLiechters residing in conflict zones will be required to pay higher fees.
Start-up phase
- In the beginning, only a few DeLiechters will send sats — some perhaps as a joke. Early contributors might include so-called “conspiracy theorists” or individuals concerned about the potential collapse of the current system.
- Over time, reports will emerge about the first payments made to wallets — tied to specific cities, regions, or communities. These reports will spark curiosity, drawing in new participants.
- Alongside the early “jokers,” it is likely that regions perceived as having “no future” will be among the first serious adopters — viewing DeLiecht as a potential escape from their current conditions (e.g., Palestinians, Kurds, etc.).
Accelerating Phase
- The crowd effect begins to take hold. Increasing numbers of people start to sense that the current system is unsustainable, and DeLiecht emerges as a credible alternative for peaceful future coexistence.
- Participation grows as more individuals begin contributing — all while maintaining full anonymity.
- Authorities respond by issuing warnings about the “end of democracy.” Suspicion spreads, and people begin asking one another: “are you a DeLiechter too?”
- The first DeLiechters face persecution. Sending sats to DeLiecht wallets becomes illegal or heavily restricted.
- Over time, these early contributors are remembered as pioneers — comparable to those who registered the first private businesses after the fall of communism, or to the early adopters of Bitcoin who laid the foundation for a new system.
Peak Phase
- Even state authorities begin secretly contributing to DeLiecht wallets — not wanting to be left out in the event of a systemic collapse.
- Bitcoin’s value, when measured in fiat currencies like the U.S. dollar, has risen significantly. As a result, what were once small and humorous contributions of sats have now grown into substantial sums — drawing attention from the media and wider public.
- The required monthly contributions in sats have become so high that some DeLiechters can no longer afford to pay. This creates pressure to lower the monthly requirement — a change that can be implemented with the agreement of at least 51% of DeLiechters.
- Being a consistent and reliable contributor becomes a matter of personal and social reputation — a sign of trustworthiness and long-term commitment to the community.
- DeLiecht nodes begin to attract the interest of service providers, as the wallets accumulate significant capital. The first major project funded through DeLiecht is likely to be a hospital or similar public good. Once the model proves successful, other services — such as private security, private police, and private courts —
begin to be considered as the next potential focus areas for DeLiecht.
DeLiecht of NYC
Assuming the budget of New York 114 billions dollars per year, 4,5 millions (half of inhabitants) paying 1000 sats per month, appreciation of bitcoin in dollars by index 10 every 5 years (in 5 years the value of 1btc rises 10 times – prooved in last 5 years when bitcoin has risen from 10.000 to 100.000 dollars), with decreasing tax index of 3% every 5 years: NYC can switch to DeLiecht system before the year 2040.
Further notes:
- In regions marked by religious, ethnic, or cultural diversity, there will likely be attempts to divide official DeLiecht accounts — for example, separate wallets for Christians, Muslims, or other distinct groups.
- Cities with significant minority populations may create various DeLiecht nodes and integrate them into the official network. This will be allowed and technically supported.
- The merging of neighboring nodes will also be permitted, provided there is a 51% consensus from both participating communities. Larger, unified nodes will naturally become more attractive to service providers, and may eventually grow to the size of modern nation-states — or, in some cases, even surpass them.
War:
- DeLiecht is an ecosystem, not a territory. If someone attempts to attack or invade a DeLiecht node, they will find only empty buildings. In the early phases, it is conceivable that a powerful state might try to suppress or even occupy DeLiecht infrastructure — but they will find no central command, no treasury, and no resistance army.
- All value lies in the blockchain. The credibility and reputation of a DeLiechter — as someone who pays regularly, votes on public spending, and helps shape the system — are immutably recorded. If a DeLiechter leaves, their entire identity and influence go with him.
- The emergence of traditional wars, such as the one in Ukraine, becomes structurally impossible. There are no centralized leaders like Putin or Zelensky in DeLiecht. Public decision-making is distributed, and each vote on resource allocation matters. The system is designed to retain contributors, not to dominate or sacrifice them.
- Minorities such as the Palestinians could have significantly greater opportunities for peaceful self-governance under the DeLiecht model tha they currently do.
- DeLiecht is capable of relocation. It can acquire new territory and move an entire city. The reputation of its contributors — recorded immutably on the blockchain — moves with it. Service providers follow reputation, not geography.
Questions
- Will “bad guys” create no-go zones?
- What will happen to state-owned properties outside of cities after the collapse of centralized states?
- Is it possible to build similar DeLiecht networks for social security or healthcare?
Conclusion
Numerous efforts have been made to reorganize society along different lines, including some that seek to reshape it through Bitcoin or blockchain-based systems. These initiatives typically follow a direct route.
We present an indirect, bottom-up alternative grounded in the location principle, according to which individuals contribute taxes in the place where they reside.
DeLiecht model circumvents the existing political system and its often arbitrarily drawn borders. Instead, it establishes natural administrative units of appropriate scale.
DeLiecht follows the path of Bitcoin—by the time elites recognized its impact, it was already too late to stop.
As Hayek put it: “We must find a sly and roundabout way to introduce something they can’t stop.”
Dr. Jozef Martiniak,
Ausekon – Institute of Austrian School of Economics