When it first emerged, Bitcoin was a dream of libertarians and anarcho-capitalists. It was a payment system which had no need for central banks or governments. It's safe to say that libertarian-minded people have most definitely been an intellectual bulwark for crypto. But they have not gone on any great crusade with it, or fought any significant campaign on the back of it.

Recently, I found out about BitNation, built on the Ethereum platform. When I made an account and looked around, I found it was a tad limited - but then again, I don't exactly know what I was expecting. Vice wasn't too hot about it either. Years ago, when I was first learning about cryptocurrencies, I took private notes on what possibilities there could be. I believed crypto could be expanded into search engines (think of Google's monopoly on search traffic, despite it being integral to the operation of the internet), online marketplaces, web hosting and publishing, and content aggregation (the latter two of which have been partially realised today in the form of Steemit), then into the automatic management of driverless vehicles, 3D printers, energy production/distribution, and finally the services carried out by governments - namely, health, education, welfare and security/policing. Together, that would form a 'cryptostate'. 

In terms of providing governmental services, there is some ambition evident in Bitnation, but it remains coloured by the libertarianism of those who support Bitnation, and crypto more generally. My vision was democratic control of the cryptostate through delegative democracy, with the eventual intention that it could not be opted out of, but with protections for individuals to prevent the system being a 'dictatorship of the majority'. The vision of Bitnation's supporters seems to be that we should abolish conventional nation states, and allow people to opt in or out of DBVNs as they please. But my vision of a cryptostate would encompass every possible service - including, eventually, the capacity of developing more services, which would lead to a singularity scenario - and there would thus be no reason for anyone to want to opt out, because in doing so would be disconnecting themselves from society and the economy. 

Me and Bitnation clash there. But there's also the more commonplace concern that incredibly wealthy people will simply opt out of all DBVNs and therefore also any obligation to pay taxes - while poverty remains rife - and will accumulate ever more wealth until they control the system and it's a de facto dictatorship anyway. Bitnation supporters (Bitnationalists?) argue the wealthy would be kept in check by a reputation system. Which sounds promising and interesting - if hard rules are coded into the system that penalise reputation rather than arrest people for non-payment of taxes, and the reputations of others are penalised for doing business with and helping people who are harming society. 

Reputation would also need to have tangible effects within the system and not just be an indicator for individuals seeking to do business with you, which everyone could easily disregard if the system collapsed. By that, I mean, if you have the lowest reputation possible, you should be at the back of the queue for all services. That seems perfectly consistent with libertarian theory to me - it wouldn't mean arresting people and throwing them in jail or holding them at gunpoint, the most common complaint they seem to have. But it depends if Bitnationalists are actually keen on this. Or if the reputation system can be opted out of as well, in which case the whole thing somewhat falls apart.

I think one of the bigger challenges Bitnation and crypto overall faces is recognition by societies and governments. The most high-profile and significant acceptances of crypto into the mainstream has been the adoption of blockchain technologies by the financial sector. Asides from that, many libertarian-minded people are quite content to shun government recognition completely - even as governments seek to encroach on vital internet freedoms and civil liberties. Many believe it is simply a matter of developing tools robust enough that governments cannot crack them. For example, ever better encryption, ever more versatile tools like Tor. But I believe that approach is limited. To a certain extent, we also need to be actively participative in the system - not complacent.

I would advocate an alternative kind of cryptostate. One which mimics conventional nation states, with: 

1. a population determining itself to be part of the cryptostate
2. territorial claims 
3. the capacity to enter into relations with other states (and the will to be part of the international community and the 'brotherhood of nations') 
4. a government, operated by a parliament

Let me break that down.

1. A population

This would be made up of people authenticating their identities on the blockchain then ticking a box claiming citizenship as part of the new state. 

2. Territorial claims

Citizens would be able to authenticate ownership of land (as recognised by their local conventional nation state) on the blockchain, and submit this as a territorial claim. 

3. International relations

The government would likely have a Foreign Minister responsible for appointing ambassadors, establishing physical embassies and campaigning for international recognition.

4. Government (and parliament)

This is the key innovation compared to other cryptostate models. Parliament would be elected by citizens, who would have powers to petition for recall of members as necessary. There would be a system of delegative democracy - for example, to save yourself going through and voting for 100 people, you could vote for one person, a delegate, to do so on your behalf, perhaps a group or party leader. The more votes a delegate has, the more powerful they are in determining who serves in parliament. Citizens would also be able to vote for changes to the Constitution, which would require a supermajority (either two-thirds or three-quarters support, and requiring an initial number of signatures) as well as recalling previously elected members of Parliament. 

I would envision the head of government would then in turn be elected by Parliament, rather than being elected directly by citizens. The head of government (a Prime Minister, if you like) would put together a cabinet, including a foreign minister but also ministers to develop standard governmental services - health, education, policing, environmental protection, and so on. We could integrate with Bitnation in providing some services to prevent duplication, and consider in-house services later on. A finance minister would be responsible for raising cryptocurrency funds in order to provide the services, by seeking donations, then later by establishing a reputation system to provide priority access to governmental services for higher donors.

My point is, if we have some of the structures and characteristics of a conventional state, while maintaining the basis of cryptography and the blockchain, we can win recognition, work with conventional governments on areas of common interests, and win legitimacy which will attract more people to the cause.