Exploring Liberland: The Microstate of Crypto Fans

Disembarking the Liberty houseboat moored off the frontier of the European Union, we’re met by a pair of Serbian police officers, their lit squad car nearly blinding us in the dark forest. “How many people are staying on the boat?” one asks, holding a large dog at bay. “I really don’t recall,” says my colleague from Reuters. Fortunately, they let us go. We must run, using phone lights to navigate the muddy path to the rally point a bit further in Croatia, in hopes that the departing presidential convoy has not left us behind.

We are meters from the border of Liberland, an unrecognized micronation of crypto fans claiming a piece of land between Croatia and Serbia on the Danube river. At just seven square kilometers — 2.7 square miles — the piece of land is roughly the size of Gibraltar. Liberland “president” Vít Jedlička explains it had not officially been claimed by either neighboring country, making it terra nullius — nobody’s land — when he planted a flag there on April 13, 2015. Though neither permanent infrastructure nor habitation has been established, the project has attracted a sizable community of Libertarian-minded folk.

The de facto home in exile in Liberland is Ark Liberty Village, a nearby campground on the Serbian side. It’s here that Magazine attends Floating Man, a Liberland festival including wilderness and water survival training, music, a two-day blockchain conference, and a daring visit to Gornja Siga, also called Liberland.

Breaking into Liberland

As the conference concludes, the president takes the stage in front of a huge Liberland flag, pointing out the borders of Croatia and Hungary and the best ways to cross into the micronation on the map. The route straight into Croatia to access the Danube is fastest, but most perilous — the border police know about our gathering and are expecting an incursion and, as such, are likely to prevent suspicious vehicles from entering. Flags, stickers or even Liberland-branded beer are a no-go at the crossing, as they will be confiscated, he explains.

Entering the Schengen area through Hungary is more certain, with the Hungarians being indifferent to Liberland, making it possible to drive into the Croatian countryside and get to its land border with Liberland without prior detection. The presidential convoy will go this route, while a boat carrying “settlers” will go upstream from a nearby port in Serbia to distract border patrols. Jet skis dragging inner tubes will take yet another route, with the aim of landing on Liberland’s island before interception.

“They may arrest you, but you are not breaking any law, so the longest they can hold you without charge is four hours.” It feels like a military operation. I begin to have doubts and unenlist myself from the jet-ski expeditionary troops to instead go with the convoy — I hadn’t bought a bathing suit, and being detained in international waters in my underwear was more than I’d do for a story.

Terra nullius not on firm legal ground

From the perspective of international law, the validity of Liberland’s claims depends on which theory of state recognition is considered. According to Declarative Theory, supported by the 1933 Montevideo Convention on the Rights and Duties of States, an entity is a state — regardless of outside recognition — if it meets four criteria: a defined territory, permanent population, a government and the capacity to enter into relations with other states.

The area in question is neither Croatian nor Croatian-claimed — Jedlička says that matter was settled when Croatia entered the visa-free Schengen area at the start of 2023, with clearly defined borders being a set requirement of entry. The land is also not Serbian. As un-owned and unclaimed land accessible from an international waterway, it appears to fit the definition of terra nullius, nobody’s land, which may be freely occupied. A permanent population is the only missing feature, which Jedlička says is only a matter of time. If they can get in, of course.

Web3 nation?

Jedlička recalls that he first heard about Bitcoin through his Libertarian circles when its value was under $1 and began to buy it on Mt. Gox for $32. When he proclaimed Liberland’s independence in 2015, the coin stood at $225. With many of the early participants in the projects making their contributions in BTC, the treasury gained value with each bull market. “Bitcoin is really one of the most foundational parts of Liberland — 99% of our reserves are in BTC.”

Attracting blockchain companies is a key part of the micronation’s strategy, with the vision to offer a low-regulatory jurisdiction with only “voluntary taxes” just off Europe, directly accessible via the Danube river. Who can become a Liberlander? Just about anyone willing to pay $150 for an e-residency, which comes with an ID card that looks like any other. Citizenship requires 5,000 Liberland Merits (LLM) — a little over $2,000 — or can be earned via contributing to the project.

According to “Minister of Justice” Michal Ptáčník, while Bitcoin is the preferred currency in Liberland, the Liberland Dollar (LLD) will be used to pay transaction fees on the Liberland blockchain, which is envisioned as the backbone of on-chain companies, the judiciary, government contract execution and Liberland’s stock market. The chain is built using Polkadot’s Parity Substrate Network, a solution from which customized blockchains can be built using modular components.

As we stand by the Hungarian border crossing, waiting to go in, I chat with the head ambassador of Polkadot, David Pethes. He notes that Liberland’s governance token, the LLM, already has 19 live validators, and the website explains the requirements: “Only Liberland citizens can run validators, adding an extra layer of security against bad actors even in a scenario where less than 50% of circulating LLD is staked.” Pethes, who is Polkadot’s man in Eastern Europe, notes that “Liberland is not on our list yet, but I’d like to have it formally included in the Polkadot ecosystem.” He sees the projects as ideologically aligned. “The participants in the ecosystem have very similar views on how money should work, how you can send value without a central point of failure,” he says. “Liberland governance and corporate governance have many similarities — the blockchain is basically forked from Polkadot,” he notes. A land registry functioning on NFTs is also on the roadmap, as well as the Liberverse.

Journey to Liberland

It begins to…