The idea of setting up an “independent” nation has always been attractive to libertarians, even though a half-century of attempts to establish tax-free idylls have produced no tangible results beyond angering locals and wasting the pocket change of billionaires like Peter Thiel. Partly in response to this, the more artistic tradition of “micronations” has been overtaken by a particular trend of Bitcoin-fuelled ultra-libertarianism, which implies less a release from state repression than a form of anarcho-capitalism. This vision has more in common with Dubai’s brand of free-market authoritarianism — a vision of ultra-rich luxury and labour exploitation — than any true utopian ideal.

Vit Jedlička, a ruddy-cheeked, stout-chested libertarian ideologue and self-styled President of Liberland, is as emphatic as he is energetic. “We are not a micronation, but a nation of 700,000 people, with embassies in 80 nations, and relations with countries like Haiti, Somaliland, and Malawi. We’re serious about getting Liberland set up as a country.” Never one to undersell his project, Jedlička clearly has tremendous fun barrelling around the world promoting Liberland. Nominally based out of this scrap of marshland the size of Gibraltar, but largely operating online, it’s a Web-3 nation: businesses unfettered from regulation, a skeleton state providing only basic protections, and “citizens” issued with voting credits based on the amount of voluntary tax paid.

Never mind that none of those would-be citizens actually live in Liberland — instead there is a handful of activists moored downstream on a houseboat, under the close supervision of the Croatian police. Never mind that its diplomacy is rather more limited than Jedlička suggests, with the citizens of Malawi recently ridiculing their government for getting involved with a nation that is never likely to exist. The President is always ready with a litany of soon-to-be realised projects and promises, hinting at deals and meetings with billionaires and politicians. The crash in the crypto market is a blip; a Liberland houseboat has been torched, but there will be an insurance payout. Every potential threat is recast as proof his project will succeed.

We first meet in a half-finished holiday camp Jedlička has purchased on the Serbian side of the river. And there is a clear tension between this “eco-village” (a “diaspora” site where Liberland’s first “settlers” will train in survival and negotiation skills) and his Serbian supporters’ frustration at the lack of a clear business plan. But, even if its “ambassadors” are paid lobbyists or random Bitcoin enthusiasts, Liberland does have more political reach than other libertarian micronations. This is partly a product of Jedlička’s gregarious personality, which has kept the project alive since it began in 2015. Due to an arcane, post-Yugoslavian boundary dispute, neither Serbia nor Croatia prefer to lay claim to the 7km²  of territory, leaving it — Jedlička says — “terra nullia” for the taking. (The Croatian authorities disagree, tolerating the Liberlanders’ presence on their territory, but denying them access to the contested patch of land.)

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But this reach is also thanks to the political moment into which Jedlička announced his project. The conservative Czech politician found a natural home in the heady world of Web-3 technologies, securing capital backing (through cryptocurrency investments) and the means to place Liberland’s constitution on the blockchain in perpetuity. He generated a growing, global interest in his ultra-libertarian vision — resulting in collaborations with big-name architects, the Polkadot cryptocurrency development fund, and a host of global Bitcoin fans, including the Liberian (not Liberlandian) Consul General to Dubai, currently living on a barge just outside the UAE in imitation of Liberland’s ideals.

For Jedlička, these international supporters “understand the economic potential of a truly free zone in the European Union… they like the vision, and want to watch”. He presents it as “combining aspects of the most successful states to date”, bringing together Singapore-style meritocracy, the town-hall democracy of early America, and the low-tax environment of European microstates such as Monaco or Liechtenstein.

In practice, such a system would face immediate issues. As we ride rickety bikes along the course of the Danube, Jedlička says he prefers the “right to set up a lemonade stand in the street over the right to cycle down it naked”, suggesting that the freedom to practice business should trump personal liberties. Yet this approach opens the door to all manner of abuses, since those individuals or businesses able to spend the most money will also be able to determine law and policy, by securing the most voting credits. Already, in Serbia’s Liberland-linked tourist village, a promised wage of €600 a month has proved insufficient to retain the skilled workers needed to complete the camp, leaving it half-finished. The “non-aggression principle” proposed to prevent direct physical harm between Liberland citizens offers no protection of basic rights. There is no health or social care, workplace protections or minimum wage. To the Liberland activists, “welfare state” is a dirty word.

Other liberties would also come under threat. The project has been troubled from the outset by the question of whether free movement of peoples would be allowed, with Liberlanders congregated in the Serbian eco-village mocking the emailed residency applications of confused Middle Easterners who mistake the country for a real polity. While Jedlička generally presents an optimistic, modernising political model, Serbian supporters who drove up from Belgrade to visit their President describe themselves as proud “conspiracy theorists”. And this isn’t libertarian trolling: they cite the Protocols of the Elders of Zion and Ku Klux Klan associate Albert Pike in arguing that the world faces an imminent race war orchestrated by the same Jewish New World Order they allege was behind the Holocaust. Given no-one actually lives in Liberland, Jedlička is free to place his trust in a notional citizens’ veto to prevent abuses of rights. But it remains unclear how a clash between libertarian ideals of free movement and the survivalist, white-nationalist inclinations of many its followers would be avoided.

Jedlička is able to evade these issues through a mixture of blind confidence and the fact that his project exists only on paper — or on blockchain. A fully-fledged Liberland would resemble real-world microstates, in that it would rely on either the continued “mining” of cryptocurrencies or on accommodating international capital as a tax haven. Quoting a sympathetic, Belgrade-based think tank, Jedlička suggests a tax haven on the Danube would bring a GDP boost to neighbouring states.

But other libertarian projects have failed following local opposition: the 1972 “Republic of Minerva”, an attempt to establish a microstate on reclaimed land in the ocean near Tonga, came a cropper when locals decided not to allow rich Westerners to enjoy a tax-free oasis at the expense of their fishing rights. More recently, a “seasteading” project which aimed to establish a floating utopia near Tahiti, initially backed by libertarian billionaire Peter Thiel, met a similar fate, collapsing following angry protests from locals opposing a “megalomaniacal” project with no clear benefit to the local economy.

Recent attempts to establish crypto-friendly communities of expats in Puerto Rico and Central America have also foundered. Notoriously, El Salvador has witnessed a protracted effort by its president, Nayib Bukele, to force locals into using Bitcoin, while attracting the Western crypto elites to free-market resorts intended to serve as Bitcoin playgrounds. The attempted pivot to virtual currency has been met with indifference and protest. Following the recent crypto crash, the nation came close to defaulting on its sovereign debt. Bukele’s Bitcoin roll-out has also gone “hand in hand” with the introduction of a “police state” characterised by widespread arrests, detentions and torture, including the arbitrary arrest of those opposed to the government’s bitcoin policy. Liberland’s nominal finance minister Navid Saberin, a Luxembourger businessman, admits he personally visited El Salvador and found “no-one had anything good to say” about the Bitcoin pivot. Yet he also remains wholly optimistic that Bitcoin will bounce back, restoring his fortunes and justifying Bukele’s efforts.

Jedlička worries that finance journalists dismiss Liberland’s political programme as too utopian. In reality, the opposite is true. If realised, his “vision” would result in a dystopian combination: reliance on foreign capital which creates little benefit for local communities, undergirded by authoritarian excesses in defence of those elite financial interests. The Liberland proposal is not a challenge to the current economic order. It is its fullest expression, stripped of all protections, checks and balances.

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But this vision has its appeal. In the surrounding states, crony capitalism beholden to EU investment has brought few benefits to ordinary people. Liberland’s President is a genuine and infectious believer in personal sovereignty, and it’s little wonder frustrated young people are attracted by his dynamic, untrammelled version of capitalism, as they are by the get-rich-quick crypto promise. And though Jedlička is keen to distance himself from more playful, performance-based micronations, the political model has also been used to register protest against authoritarianism and homogenisation. Protest projects such as Germany’s Free Republic of Wendland or New Zealand’s Independent State of Aramoana stood up against the profit-driven destruction of local communities and environments, with the latter successfully resisting the state-backed imposition of an aluminium smelter. In nearby Slovenia, the Neue Slowenische Kunst (NSK) used provocative appropriations of state insignia to critique state authoritarianism.

Though dismissed by Jedlička, this spirit of protest is inherent to both the micronation concept and the libertarian movement. There is room for a more productive critique of an admittedly exploitative global financial system rigged to benefit certain states, which also recognises the limitations of crypto and the role that tax havens and free-market ideology play within that system. For now, though, we have only Jedlička’s vision of Dubai-on-the-Danube, and its handful of loyal followers.

Bitcoin Beach, with its old shacks and gleaming new hotels, is home to an eclectic mix from El Salvador, the United States and beyond. Its residents include investors and fishermen, YouTubers and surfers, former beauty queens and former mercenaries. It is more than just a beach club; it is a symbolic landmark of an 18-month-old experiment to promote the cryptocurrency in El Salvador, whose economy is otherwise driven by farming, sweatshops and migrant remittances.

Salvador’s Bitcoin project is championed by globe-trotting entrepreneurs, known as “Bitcoiners”, but is also a key policy of President Nayib Bukele, a 41-year-old former marketing executive who has revolutionised politics for San Salvador’s six million inhabitants. Bukele is most famous for his crackdown on gangs, having suspended civil liberties and incarcerated 1% of the population. But while he has taken an authoritarian approach on crime, in Bitcoin he has embraced a flagship of many libertarians — the controversial blockchain system for digital payment transactions created by the pseudonymous Satoshi Nakamoto.

Bitcoin crept onto the world stage in 2008 and gradually rose in value, attracting hundreds of billions of dollars by the late 2010s. Amid various downturns and scandals (most recently the collapse of the FTX exchange), many dismiss the currency, but it still attracts investment and hardened Bitcoiners insist it will eventually replace physical cash. In September 2021, El Salvador became the first country to declare Bitcoin a legal currency, alongside its use of the US dollar. All Salvadorans received the equivalent of $30 if they signed up to the state-approved “Chivo Wallet”, while Bukele spent $100 million from Salvador’s state coffers on the crypto, shortly before it crashed, immediately diminishing this investment to $66 million. Despite this, Bukele announced “volcano bonds” to raise money for a tax-free Bitcoin City near the Conchagua volcano on the Gulf of Fonseca. At the 2021 Latin American Bitcoin and Blockchain Conference in El Salvador, Bukele was introduced with a giant screen displaying an avatar of him in his trademark hipster beard as a flying saucer beamed him down to earth.

For all the fanfare, it’s hard to figure out the mechanics of Bukele’s scheme, such as how Bitcoin City will pay for garbage collection with no tax. It is also unclear what the incentives are, with critics claiming it is really designed to attract money launderers. Like the currency itself, the experiment seems to mean different things to different people, have varying applications (some useful, some shams) and is as much about the image as the product. In short, Bitcoin El Salvador is as cryptic as the virtual money itself.

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Likewise, it’s hard to classify exactly what Bitcoin Beach is. It is not an official district (and is not on Google Maps) but is part of an area called El Zonte. The Californian surfer, businessman and evangelical Christian Michael Peterson is credited with devising the concept in 2019, helping inspire Bukele to launch the currency nationally. Peterson had been visiting El Zonte for over a decade and conducted charity work through a non-profit called Missionsake. The Bitcoin Beach website describes itself as a Salvadoran initiative that Missionsake supports, and the beach as “a sustainable Bitcoin Economic ecosystem… where the majority of people do not have access to bank accounts”. However, while almost all businesses in the area accept the crypto, it’s unclear how many of their transactions use it; one vendor tells me it’s only a tiny amount and he uses those sales for savings.

The project headquarters can be found at Hope House, a white building emblazoned with an orange Bitcoin logo. There, I meet Jorge Valenzuela, a 33-year-old “coordinator” from Zonte. Valenzuela says Bitcoin Beach is registered as an educational and social project which has taught local youths to get a foot in the financial system. But he concedes there are other goals, too. “We can do transactions in Bitcoin and it works. But beyond this there is tourism, economy, new jobs, opportunities, many journalists coming here to see what is going on,” he says. “We have changed the country now. The country of pupusas. The country of waves. The country of Bitcoin. The country of good people. Now nobody is remembering a bad country.”

As successful Bitcoiners have shown, crypto can be promoted not just as a currency or investment but as a lifestyle choice, involving living by the beach, working remotely, and rejecting government interference. Down the road in a gated community, I meet some of those attracted to this newfound libertarian side of Salvador. Nicki and James are a pair of Bitcoiners who moved from New Zealand in early 2022. James was an early adopter of Bitcoin from an entrepreneurial family; Nicki worked in finance. They met during the pandemic as New Zealand’s lockdown restrictions were getting increasingly harsh, especially for the unvaccinated. “They made a two-tier society. You couldn’t go to a café. You couldn’t get your hair cut. You couldn’t do all those things,” Nicki says.

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Then, in November 2021, El Salvador became one of the first countries in the world to remove all Covid travel restrictions. Nicki and James sold up, said goodbye to their families and began a new life by the Pacific, as well as a new YouTube show. Like the few hundred foreign Bitcoiners in the country, they do a mixture of remote work and social media in addition to investing in crypto. As well as saving Bitcoin, they also spend it at the local stores, using apps that can facilitate rapid transactions. “It’s really important for us to utilise it in both ways,” says Nicki. “Eventually, it would be really great to see the fiat system go.” James sees their decision as political: “We literally moved our monetary choices and our time spent to another currency system in another country,” he says. “That’s a really strong vote in our mind.”

The most famous Bitcoiners in the area are Max Keiser and his wife Stacy Herbert, formerly co-hosts of a financial news show on Russia Today. They are considered advisers to Bukele on Bitcoin, a badge that Keiser proudly announces on his Twitter handle to his half a million followers. Their podcast “Orange Pill” applauds Bukele, and discusses Bitcoin in terms laced with near-religious zealotry. “There is always a counterforce for everything in the universe, and Bitcoin is the counterforce to all this: that money-printing; those warmongers; those plunderers,” Herbert said in a recent episode. “Bitcoin cannot be stopped.”

One area where Bitcoin could certainly take off is with remittances, the money migrants send home from their work abroad, mostly in the US. In 2021, migrants wired $7.5 billion to El Salvador, representing more than a quarter of its entire GDP. They often send it in small amounts to their families, and pay high fees using transfer services such as Western Union. Bitcoin, with its blockchain technology, could massively reduce these.

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In the more deprived areas of the capital San Salvador, however, residents seem less enthusiastic. Flogging bananas on a stall in the Margaritas slum, Yamileth Gonzalez, 40, says she received her initial $30 with the Chivo Wallet but hasn’t used it since. “It’s fiddly. A hassle. I prefer cash,” she says, although she is a firm Bukele supporter. Meanwhile, less than 2% of remittances used crypto. The migrants sweating in fields and restaurants seem to lack the patience and trust to turn their earnings into Bitcoin. This isn’t too surprising: many cryptocurrency ATMs in the country appear to be broken. Standing on a street corner in San Salvador, I watch a line of people try to use one, only to walk away empty-handed.

Yet a few streets away, there are signs of El Salvador’s Bitcoin revolution taking shape. Outside Chivo Pets, a government pet hospital that charges in Bitcoin, a trail of dog owners bursts out of the waiting room and onto the street. Here, customers who pay in Bitcoin are charged massively reduced fees — just a few dollars for hundreds of dollars worth of treatment. One queuing dog-owner, Veronica Serrano, tells me she is not a supporter of Bukele but thinks that launching Bitcoin was a popular policy, despite people not using it much. “People like the idea of Bitcoin because it seems modern and futuristic. It seems like we are going forward,” she says.

This strikes me as a key motivation for Bukele, a marketing executive who is very tuned in to the image of his policies. In terms of its PR value, for Bukele, the country’s broken crypto ATMs are a sideshow. As long as places like Bitcoin Beach and Chivo Pets continue to succeed and dominate the headlines, there will always be a victory for him to sell.