Over the last few decades, people have created many pieces to a grand puzzle that is beginning to form. Yet, all the pieces are scattered around. Nobody seems to be putting them together. People have created ideas for monetary systems that don’t need central banks, but nobody has built a healthy functional economy around one. Others have proposed the need to sequester carbon dioxide from the atmosphere and trap it to reduce our carbon footprint. But that sequestration generally leads to the carbon just being trapped away and dumped.
Others still have come up with rather interesting designs for numerous building types including houses, hotels suites, restaurants, and many more options, all of which can float on the open sea. But most of these ideas are not taken to their full potential. Putting everything together, it is possible and now practical to build an entire society, separate from any existing nation-state, which does not require the control of land, and which allows for a lot more flexibility and freedom.
I have been simultaneously excited by the prospect of how all of these different ideas could change our way of life, and equally as disappointed by the failure by different groups to bring these ideas together. All of these technologies are failing to reach their potential, and in many cases even failing to move beyond the idea stage, in part because they need each other to succeed, and cannot succeed as their own individual projects. It is my hope that by detailing how each of these components can work together to build a new future, people will start to work together to make it happen.
Constructing a Monetary System
The monetary system proposed in this text is fairly different from any mentary system to date. It uses a combination of different approaches to economic theory, utilizing both the generation of fiat currency and non-fiat currency, and it takes advantage of the advancement in blockchain technology.
Government issued fiat currencies are largely maintained by taxes. However, taxes are not the only way to generate demand for such currencies. Store points are basically fiat currency. But they aren’t maintained by force or by taxes.
Instead, store points have value because the store that issues them provides a good or service, in return for store points. In other words, an NGO needs to provide a good or service to generate value for their issued currencies.
Reserve backed currencies, on the other hand, gain immediate value by allowing the exchange of the currency with the resource in reserve. Traditionally, the thing of value has been gold. However, there is no reason why a collection of fiat currencies could not be pooled together to create a reserve system for another currency. All that really matters is that those fiat currencies are fairly healthy.
There is also no reason why exchange has to be set at 1:1 for the reserve asset and the currency in question. That ratio is the traditional peg, but the currency could be pegged to something else instead.
These ideas form the basis of the monetary system proposed dhere. The system is rather complicated, but can be broken down into a few different interconnected components.
Core Resource Token
At the center of this monetary system is the core resource token (CRT), an ERC-20 token that can be used to “forge” narrow currencies. There will be no token sale for the release of this token. It will be released entirely through a faucet system coupled with liquidity pools.
CRT will double as the governance token for the DAO which controls the faucet and is funded by the faucet. The DAO will vote on funding requests for various projects.
While some of CRT’s value will come from having a say in the DAO, the majority will come from its use as the resource token in forging narrow currencies. The more demand for these narrow currencies, the more demand for CRT.
Narrow Currencies and Foundations
The purpose of the core resource token is to be used to forge narrow currencies. These narrow currencies are the fiat currencies that will form the basis for a stable value currency.
A traditional currency can be accepted for any good or service within an economy. But the goal of creating a narrow currency is to have a form of money that is mostly used within a given sector of the economy, such as entertainment and art, or health and medicine.
To obtain the narrow currency, a certain amount of CRT will have to be given to the DAO, along with a small ETH fee. Most of that resource token would stay in the DAO. The rest would be transferred back to the faucet.
As with CRT, narrow currency DAOs can vote on releasing funds for projects. These projects would be related to the concepts being promoted by their respective foundations. As the narrow currencies are fiat, and need to have value added, it will be the job of the foundations to aid the production of goods and services that can be paid for in their narrow currencies.
Potential Foundations and Associated Narrow Currencies
When thinking about what foundations to create, it’s important to consider what a community needs. It needs the basics, such as food, clothing, and shelter. It also needs to support the physical and mental health of its population. And finally, for a group of people to truly thrive, rather than just survive, they need something to provide depth to their lives, such as entertainment and the arts.
Food, Clothing, and Shelter (FCS)
The basic needs: sadly, far too many people in this world do not have access to even these core needs. There are people all over the world who have insufficient food, a lack of clean water, insufficient clothing to keep them warm or cool, or no safe place to live. This situation is unacceptable. We will definitely need at least one foundation to tackle these kinds of problems.
Public Health and Medicine (PHM)
Even if we have the basics, we still need to maintain proper mental and physical health. Unfortunately, support programs for both areas of health are often lacking, and mental health especially lacks proper support and recognition.
Entertainment and Arts (ENA)
Life for the sake of living isn’t really what humans do. We need something that adds depth to our lives, and that comes from entertainment and arts of all kinds.
One way that foundations can generate demand for their currencies is by providing a combination of startup funds and loan programs available to projects that are willing to offer goods and services, in line with the foundation’s initiatives, payable in the narrow currency. Funding for these programs would come from the DAO, and the DAO can either vote directly on which projects to support, or elect a board that handles the evaluation process. For loans, discounts can be given to the companies if they pay back the loan in the narrow currency. In this way, the foundation can grow demand while also fulfilling its objective.
Necessity of Charity
To initially generate value, and to continue to generate value, each narrow currency foundation will need to work to generate demand for their narrow currency.
One very simple approach is to pre-seed each DAO with a certain amount of ETH. People will likely start using the faucet and minting in order to try to get the ETH for themselves.
Liquidity will have to be provided for CRT, as well as the narrow currencies. It will be funded using the initial supply of each token. The initial pool can be fairly small. The price should be set to the amount of ETH in the DAO initially, divided by the total supply of the token.
So for instance, if there was 10 ETH in the entertainment and art currency DAO, and initially one million ENT initially minted for the pool, then the conversion rate should be 100,000 ENA per ETH.
The need for external funding and donations largely comes from the fact that, initially, there are no tokens released to investors. There are no investors in the traditional sense, as there is no token sale. As a result, there is no direct profit motive encouraging the contribution of funds.
Instead, a lot of the initial contribution will have to come from those who recognize that their contributions create a new economy with potential for new profits from existing and novel business ventures, and that this project improves the human condition.
While there would be no direct benefit, as these entities would not receive a stake in the DAOs in return for their contribution, it can be argued that there is significant indirect economic benefit in that there would be new markets and new customers.
Even if nobody else joined the system, all tokens would have value so long as the DAOs are not drained. But the goal is to get people to join to continue to create more, but in a sustainable and ethical way.
How is that accomplished? Each narrow currency foundation needs to support the use of the narrow currency, such as by funding new projects that are willing to accept it, or by directly creating new goods and services that utilize it, including on chain services.
ENA would perhaps be the easiest, since collectible NFT series releases are often a good way to generate revenue. However, usually revenue is generated in ETH rather than in a narrow currency.
One issue is that the faucet system can easily be abused through automation. If there was a way to ensure that each individual could only use the faucet so often, the faucet would effectively function as a form of basic income. However, blocking double dipping usually requires some kind of proof of identity.
There are a few systems that are developing networks of trust and proof of identity. However, such rigorous methods are not necessary in this instance. So long as the odds of a person using the faucet twice in a set time period can be made sufficiently low, the system will work. One potential solution will be discussed later.
While the CRT DAO can vote to increase the supply, if there is no increase, eventually the faucet would run dry. But due some CRT returning to the pool when they are used to forge new narrow currency, the pool is replenished, preventing it from drying up.
Another way to help maintain stability of the system is to ensure that many of the services created by the narrow currency foundations include a burn function to burn some of their narrow currency.
Finally, with all of the narrow currencies generating value for CRT, it will then be possible to use CRT as the basis for the creation of a stablecoin. The concept of a stablecoin is not new. The idea of a stablecoin is that it is a cryptocurrency which maintains a constant trading value against another asset. But what projects so far are failing to do is create a stablecoin that is pegged to something of far more value than government issued fiat.
In many ways, the US dollar used to be a stablecoin. It was pegged to gold and backed by it. The value of gold in reserve gave the US dollar its value. Many people wish to return to the gold standard. Unfortunately, that is not really possible.
The reason why is that there simply is not enough gold to go around. The global economy is just too large to back it, and we are depleting more and more of underground gold deposits year after year.
Luckily, perhaps, governments are trusted enough and powerful enough to maintain their currencies, for the most part. A major way they ensure value for their money is through taxation. Since taxes are calculated in the government’s currency, it is required that taxes be paid in that currency, there is always demand around tax season.
However, central banks have a number of drawbacks, especially in that they, and their respective governments, often debase their currency to meet their own needs, and they monopolize currency production.
Thankfully, blockchain technology has given us a way out of this situation. And there are a few different approaches that people have taken. One is to simply have a custodial holding of government issued fiat, redeemable at a rate of one unit of fiat currency for one unit of pegged currency. USDC and others use this approach.
Another option is to use a combination of smart contracts and oracles to create an exchange rate between collateral in the form of Ether or some other cryptoasset (general on-chain digital asset) and the pegged currency, such that peg is maintained. DAI uses this approach and it is preferable for this project.
The Ultimate Peg
The question then becomes “to what will this new currency be pegged?” And the answer is “energy.” At the end of the day, energy is one of the most, if not the most fundamental resource in the world. Everything is created from energy. We have to deal with economics, the study of decision making under finite resources, because energy is limited.
Just as the Maker protocol maintains collateral in a way that allows DAI to stay roughly equal in value to the USD, the same approach can be used to identify the cost of energy relative to the collateral being used. Of course, there is no single price of energy. It varies by source and region.
So instead, a composite index will have to be created first. This index will be an average cost of one kilowatt-hour of energy, across various economies and resulting from different energy sources. With this index, a Maker protocol clone would then be able to create a new cryptocurrency, Decentralized Energy Currency (DEC), where DEC will be pegged to the approximate average value of one kilowatt-hour of energy.
CRT as Collateral
While ETH should be accepted as collateral as well, the primary collateral for this energy pegged currency should be CRT. The reason is that ETH’s supply does not grow with economic activity. It may become increasingly difficult to obtain enough ETH to pack the currency, which would lead to the same kind of problems experienced with a gold standard.
More detail on how an energy pegged currency can work can be found in “Toward a New Monetary Standard: Creating a universal energy backed currency built on blockchain technology.“
Obviously there is a need to avoid having to deal with securities laws, or go through the lengthy process of filing for each token. So the question is, does this system as defined produce any securities? Maybe. But legal counsel would be necessary to be certain.
What about the collectibles? Collectible NFTs themselves are not securities unless they are being used for a token airdrop. That is not happening in this case. The token is coming before the collectible. Other services to give these tokens value would be similar.
What about the narrow currencies? To be a security, there has to be an investment of money or something of monetary value. We might have an investment of money with the requirement to have some ETH given to the DAO, along with CRT being used.
What about the core resource token itself? Again, maybe because of the small amount of ETH used. It boils down to whether this payment of ETH and resource token can be considered a fee rather than an investment. The absence of an actual token sale here does help reduce the odds of CRT itself would be treated as a security.
One point that might help is that both the ETH and CRT go directly into the DAO, which means that this payment is directly increasing the worth of the DAO, without the aid of the DAO’s members or another third party. It acts more like a shared savings account if anything.
Still, I think the narrow currency foundations may very well be considered an investment and the narrow currencies very well may be considered securities, so they will have to be registered.
The really bizarre thing is that since these narrow currencies have no capped supply, and each forge increases the supply, there would be no way to calculate the fee necessary, as it is unbounded. Likewise, even if the total supply were capped, the cost of the resource token at the time of forging is again unbounded, so the SEC fee would be unbounded. Of course, the easiest solution is just to skip America as the location where this project is founded and set up the foundations in a much more crypto friendly region.
Income Support Programs
Beyond aiding the creation of various projects to use their narrow currencies, foundations will also be able to create support systems to distribute extra income to people, in return for promoting the core objectives of each foundation.
The foundations will do so by establishing training programs. For instance, the foundation for public health and medicine might create training programs which help teach people how to perform first aid, and how to better take care of their own health.
Foundations will be tasked with providing stipends for those who successfully complete their training programs, and who are willing to occasionally volunteer their time to continue to train others and improve the programs. In this way, self improvement, and learning skills that help society will have a long term effect on an individual’s income.
Unfortunately because of the nature of these programs, there will have to be a certain amount of centralization and record keeping in order to maintain the stipends. The exact organization structure used can be considered by each foundation.
A New Place to Live
Many people have tried to claim independence, including going as far as taking a small piece of land and claiming it as their own country. However, no such country has ever been recognized. The refusal to recognize such a country is not surprising. No existing nation-state is going to simply relinquish dominion to a group of people who want to create their own country.
Even in cases where many regions do recognize the validity of a nation-state that has fought hard for its independence, many other countries disagree with their sovereignty and consider the land under their control. That is the case with Taiwan and China and Ukraine and Russia, as well as many other countries.
A Semi-Nomadic Way of Life
That is why, rather than looking to land, it is time that we look to the sea. This idea is very similar to the notion that rather than seeking to find new planets to colonize, we should colonize space itself.
This isn’t to say that ocean living will in any way replace life on land, or that even a majority will ever live full time on the open seas. Instead, it will create a new nation-state of modern nomads. Houseboats and ships of different sizes and configurations could be brought together to create whole communities.
Companies like Jet Capsule have already been hard at work developing numerous configurations ranging from small suites to full scale sea ports. Put together, these vessels can form a small to medium size community. Yet those communities would be modular and could be restructured on the fly as well, and people could easily move from one to the other, as their foundation is the open sea.
This proposed community is only semi-nomadic. The goal is to have core infrastructure in place, including the carbon capture system, feedstock production system, desalination, and agriculture, as well as a number of common areas such as floating parks.
Another necessary piece of infrastructure is an airport. While there are a lot of designs for vertical landing systems, to be able to easily transport goods and services between the community and the broader global economy, it is necessary to have an airport capable of handling full size planes.
Finally, to really be as independent as possible, this community would need to be able to build more of itself. That means there would need to be shipyards nearby, which could produce more living quarters, and expand infrastructure as needed.
Luckily, there are already a few designs available which could be modified to handle all of these core services. The US military developed the concept of a mobile offshore base (MOB). These bases could be connected as modules as needed, to the point where they could form a full size runway. However, the proposal was rejected because there were cheaper alternatives which met the military’s objective. However, these systems would be perfect for the rapid deployment of core infrastructure for this proposed community.
Plot Grids and Travel Routes
Individuals and families will still be able to come and go, more or less as they please. However, there still needs to be a way to organize these vessels so that they don’t become overcrowded. Core infrastructure will therefore need to establish virtual plots as well as travel routes. People will be able to rent these plots, much like they would rent a piece of land. However, because the vessels on these plots are mobile, people can move without having to abandon their homes.
No Land, No State?
There is no single definition of a state, in a legal or political sense. A general requirement for the existence of territory. Usually this territory is considered to be fixed land. However, maritime law already considers vessels flying under a flag to be part of a state’s territory. Therefore, if there is a permanent collection of vessels which flies a flag of a new nation-state, whether recognized by others or not, the total space on or within those vessels is the nation-state’s territory. And that space is the totality of the territory of said nation-state.
Location Location Location
A major issue is going to be selecting locations for these kinds of ocean dwelling communities. They need to be located in international waters and as far away from busy shipping lanes as possible. They also need to be located in regions that are ideal for solar and wind farms.
One extreme option is to station a community in the middle of nowhere: Point Nemo. This region of the Pacific Ocean is currently used as a location to dump junk from space, as it is the furthest point away from any landmass.
The closest landmass to Point Nemo lies approximately 2,700 kilometers away. Getting everything in place would therefore be incredibly difficult. It would require slowly moving the core infrastructure into place. However, once a permanent airport is put into place, it would no longer be all that difficult to get additional resources to the area, and it would then be fairly easy to start building out the community.
While it would be a difficult location to build initially, choosing it has the advantage that there is limited risk of harming ecosystems in the area. Due to ocean currents blocking nutrient flow, as well as its isolation from landmasses, the region is biologically desolate.
However, in order to maintain safety, either the use of the region as a dumping ground by aeronautics and space administrations would have to be halted, or the infrastructure will have to be placed in an area far enough away from specific regions used for dumping. Given that there is concern about the environmental impact from space debris, the former would be preferable.
The goal is not to immediately and extremely demand sovereignty, nor would it be appropriate to hide the fact that sovereignty is the goal of this proposal. Instead, the territory and economic activity of the nation-state, as well as a shared identity of the people within it, should be built.
The nation-state will have to flourish for sovereignty to occur. Initially, almost all resources will have to be brought from existing economies. There would be a severe trade deficit. However, as more goods and services are produced by these oceanic nomads, and the society grows, the trade deficit will decline.
If imports and exports reach parity, or even better if there is a significant trade surplus, then the nation-state will have enough bargaining power to request recognition as a sovereign state. Until then, individuals will have to maintain their citizenship status in some existing country.
In order to gain a trade surplus, the community will have to create various goods and services of value. That may seem difficult on the open sea. However, before even thinking about exports, it is important to address some basics, like food and energy. Water can be obtained through desalination. And food can be grown using a combination of aquaculture and hydroponics.
Energy can be obtained from a combination of offshore solar and wind, as well as potentially from next generation nuclear reactors. All three together would be able to produce a constant source of electricity for the community. However, it can also be used to capture carbon dioxide from the atmosphere.
This carbon dioxide can be bound and dumped, or it can be used. Carbon capture can form the basis of methanol production, which can then be used as feedstock for a host of other chemicals. Currently, almost all organic chemistry feedstock comes from oil.
If the methanol and feedstock can be produced cheap enough, it can be sold competitively on the open market, and act as a core source of revenue for the community. Finally, when coupled with the sale of seafood and other food items, as well as other goods and services that will be produced by the community members, there will finally be a way towards an export surplus.
Maintenance and Order
While creating a traditional government is one possible approach, the goal should be to reduce the need for government as much as possible and instead use voluntarily maintained components that work together to maintain the system and provide order. Such coordination would require automated technologies, as well as service contracts with groups that can maintain the basic infrastructure of the system.
Automation and Positive Incentives
Technological advances have made automation of many tasks a lot easier. Factories can be largely automated, needing only a few people to manage and maintain them. This would allow most of the core services to be provided without much human involvement. The system itself will automate desalination, carbon capture, and many other areas of the core economy.
Electronic locks, self-driving vehicles, and many other technologies allow much of the system to maintain agreements voluntarily, as long as people agree to use compatible technologies. Incentives can be used to help ensure that people comply.
The use of punishment is generally an ineffective strategy for maintaining order. Positive incentives generally outperform punishment. Positive incentives can include payments and discounts for maintaining proper locations of vessels and the use of automated control systems which allow for the system to make minor adjustments as needed to ensure that individuals are staying within their own assigned plots.
Guilds and Service Contracts
One project that has been on the back-burner for a number of years is the Guild Association. A guild is sort of like a union, but their constituents are different. A guild is a collaboration between independent contractors or sole proprietors. They work together to find jobs, to obtain training in their profession, and to further the profession.
The modern economy has already shifted somewhat towards a more contract based system, with operations like Fiverr and Upwork and services like Uber, GrubHub, and others. However, so far these gig services have been handled by centralized for-profit companies.
However, all of these companies still try to treat their service providers as independent contractors. A guild ensures that these individuals truly are independent contractors, and that they are also in charge of the system that brings them all together as a cooperative.
Guilds could be established and supported by narrow currency foundations which support sectors of the economy into which their respective guilds might fall. With guilds in place, it would be fairly straightforward to hire these guilds to handle service contracts for maintaining core infrastructure and services, as well as provide security for common areas.
Because guilds are a collection of sole proprietors, there would be no need to have a corporate entity managing employees, and the DAO can help coordinate work contracts with ease.
Trust and Mediation
The goal of this project isn’t to create an entirely decentralized system with total anonymity. It is important to have a unique identity that can show itself to be trustworthy, whether that identity is tied to an individual person or a fictitious entity such as a business.
Highly trusted identities could then apply to be advocates. When disputes between individuals or organizations arise, they can select one or more of those advocates to arbitrate. This system will help solve disputes between situations that do not occur on chain, such as personal injury or property damage.
An additional use of this trust system is to act as a proof of identity for using the faucet. A trusted identity will be able to access the faucet, while an untrustworthy new identity will be unable to do so. If someone wishes to join the system, all they would need to do is receive enough support from existing members of the system.
Phase 0: Team Creation and Code Development
All of these ideas will take time to put together. The first step is to gather teams of interested parties for the development and management of CRT and the three main narrow currency foundations.
This stage would also include a feasibility analysis, cost analysis, and the identification of locations that would be best suited for the establishment of the pilot community. Startup cost will not be easy. Given that the goal is to essentially create a town from scratch, using new technology in new ways, it will cost billions of dollars, if not tens of billions of dollars, to implement.
Phase 1: Funding
Once the code is finalized and reviewed for security, the CRT Foundation will focus on generating initial capital. Since the goal is to generate interest in an ocean community, the foundation could start by taking orders for virtual plots, as well as for houseboats.
However, a major source of funding is going to have to be from donations and grants. Luckily, there is a lot of support for carbon capture systems due to the risk to climate resulting from greenhouse gas emissions.
Phase 2: DAO Launch
Once enough funding has been obtained to seed the DAOs and also fund the construction of core infrastructure, the DAOs will be launched and foundations will begin to build on-chain services for their narrow currencies, as well as begin the establishment of income support programs and guilds.
Phase 3: Infrastructure
With funding and initial support for the project obtained, the next step is to build out the basic infrastructure. That would include the mobile offshore base system which would act as the airport and house the equipment to convert carbon dioxide into fuel and feedstock, as well as the desalination plant and possibly initial agriculture.
The next step is to build the shipyard so that houseboats, restaurants, and shared community spaces can be constructed. At that point, there will be enough infrastructure in place to start