Strangely Enough, Vanuatu Proves Why Bitcoin Will Never Be Banned

Authored by Simon Black via,

In the late 1500s, an Englishman named William Lee invented a revolutionary knitting machine that could efficiently do the work of dozens of men.


Given how important the garment industry was at the time in English, Lee’s invention was truly disruptive.


But Queen Elizabeth wasn’t so excited.


When Lee came to visit her to demonstrate the power of his new technology, the Queen grimaced, lamenting that the machine would put too many people out of work… and she refused his request for a patent.


So Lee went to France, where King Henry IV was highly supportive of the technology and issued a royal patent.

I was thinking about this story recently when I read about the government of Vanuatu announcing that they will begin accepting Bitcoin in exchange for citizenship.

If that sounds strange, let me explain–

Vanuatu is one of several nations that offers citizenship to foreigners in exchange for making an ‘investment’ in the country.

As Vanuatu is a member of the Commonwealth of Nations, its citizens are allowed to travel in 113 countries, including European Union (EU) states, Russia, and Great Britain, without a visa.


This privilege will also be given to foreigners who have acquired Vanuatuan citizenship.

Malta. Cyprus. Saint Kitts & Nevis. Etc. These countries all offer what are known as ‘citizenship by investment’ programs.

(And dozens of countries, including the United States, offer ‘residency by investment’ programs, where foreigners receive legal residency in exchange for an investment.)

As I’ve written before, however, sometimes these programs would be more accurately described as ‘citizenship-by-donation’.

Because, in many cases, you’re not really making an investment. You’re just writing a big check to the government.

Malta’s Individual Investor Programme requires foreigners to donate 650,000 euros to the government. And that’s only one of the qualifications. In Cyprus it’s more than 2 million euros.

Vanuatu has had a number of similar programs over the years. It’s MUCH cheaper, though you’ll still end up spending north of $200,000 between the fees and investment.

Dominica’s program is probably the best value for the money, with a donation of just $100,000 (not including fees).

And Saint Kitts is offering a bit of a ‘special’ right now through March 2018, providing citizenship in exchange for a $150,000 donation to their hurricane relief fund (that’s down from the normal $250,000 investment in their Sugar Industry Diversification Fund).

Vanuatu is the first country to accept Bitcoin in exchange for citizenship… which I find pretty shrewd.

There are countless ‘Bitcoin Millionaires’ out there who bought a boatload of the cryptocurrency years ago and are now sitting on hefty gains with limited options to spend it.

So Vanuatu’s economic citizenship program will likely end up being a popular outlet for Bitcoin’s early adopters, causing a surge in applications (and much-needed revenue).

The irony is that this will put Vanuatu in the cross-hairs of illicit hackers.

Even governments in more advanced countries lack in-house crypto expertise who truly understand Bitcoin cold storage and proper handling of private keys.

It’s doubtful that tiny Vanuatu has those resources either.

Consequently, I imagine we may soon hear about the Vanatu government’s Bitcoin wallet being hacked. The potential treasure trove is simply too big for hackers to ignore.

The good news, though, is that this will likely spur other governments to start doing the same thing (once they nail down their cryptosecurity strategies). And that’s a big deal.

Vanuatu’s decision to accept Bitcoin payments shows that there will always be competition among governments.

Some governments have already decided to impose bans of cryptocurrencies or their exchanges.

Just this morning, for example, the Russian central bank said it will block Bitcoin exchange websites.

Other governments may also move in that direction.

But there will always be other governments– often in economically underdeveloped countries– which embrace what others ban.

Online gambling is a great example. The US started banning Internet gambling websites more than 15 years ago and chased away a thriving industry.

Malta capitalized on the opportunity and developed favorable legislation to become a safe haven for online gambling companies.

Today the industry accounts for more than 10% of Malta’s economic activity. It was a big loss for the US and a huge gain for Malta.

Taxes are another great example; while some countries stupidly raise taxes and hang a “Closed for Business” sign at the border, other countries welcome business with open arms, slashing their taxes and providing generous investment incentives.

Bitcoin will be no different. Some governments will idiotically chase away the wealth, investment, and opportunity that comes from blockchain and cryptofinance.

Others will embrace it. They’ll become safe havens.

And the great thing about cryptocurrency is that it’s so easily transportable. We’re talking about something that exists online.

It’s not like some Bitcoin exchange website has to pick up and move a factory. Shifting operations from one country to another is much simpler for cryptocurrency businesses than for most traditional industries.

And as long as this type of inter-governmental competition exists between countries, as it has for centuries, they won’t be able to make a dent in the industry with their regulations.

Do you have a Plan B?


Exponere Mendaces Tue, 10/10/2017 - 16:55 Permalink

This is just the beginning.But I'm sure the idiots in the ZH comment section (you know who you are) will keep on screeching about some stupid bullshit anyway.I'm just laughing looking at the price - we're a hair under $4,900 with 5k in easy reach.All of these people could've had some real gains, but they're stuck in the tar pits with the rest of the financial dinosaurs.

overbet nope-1004 Tue, 10/10/2017 - 17:01 Permalink

Here we go:   tmosley  overbet Sep 30, 2017 2:40 PM One BTC sold for $4340.   UPDATE: $4869.67   3.4 ounces of gold bought at @1280.   UPDATE: $1,286.40   So which will be worth more a day, a week, a month, a year, and a decade from now? Place your bets right here, ladies and gentlemen!…

In reply to by nope-1004

lincolnsteffens tmosley Tue, 10/10/2017 - 18:38 Permalink

A passport is more like a "Welcome" mat. If you need to get out of Dodge in a hurry you have an alternative refuge or a pass to numbers of other countries that would let you stay a while. Too bad that buying "only" a $100,000  passport would crimp my future ability to feed and house myself.If you think the livin' is easy in those places, it might not cost much for a thatched hut and some bananas but buying anything not locally made is far more expensive than you are used to.A fellow I knew liked to go to the Dominican Republic. Some suspected he went for sex vacations. A few years ago he got shipped back in a box. He was murdered.

In reply to by tmosley

HRH Feant2 Gaius Frakkin'… Tue, 10/10/2017 - 17:13 Permalink

Well this article went completely over your head!

The point of paying for citizenship isn't so you live in the middle of nowhere on an island that is frequently rocked by earthquakes. The point is you get a second passport that includes visa-free travel in Europe and Russia.

Having been deported from Belarus attempting to go to Russia I can attest to the value of visa-free travel being a bonus.

In reply to by Gaius Frakkin'…

covfefe MICdotard overbet Tue, 10/10/2017 - 17:42 Permalink

mosley!!! Now you actually have a 'national anthem' (TO KNEEL TO) while they're playing your song! XANADU DON'T LAUGH MOSLEY (laugh at ME instead)... I humbly regret to inform EVERYONE that I'm actually in that video as one of the JUMPING rollerskaters My equally regrettable cinema performance was at (1:46) of this clip (but at least I could jump ~ what can I say, I'm a 'was' good jumper)... It's hard to actually quantify over the years... I mean, there weren't any BITCOINS in 1983, & even silver was still in a downtrend from the HUNT debacle... Call me stupid... I clearly don't have the grey matter that geniuses like Simon Black have... ~nice sides of tuna sushi though, were actually a reward  

In reply to by overbet

covfefe MICdotard apu123 Tue, 10/10/2017 - 19:47 Permalink

It hurts to jump that high... 30 years later it costs me an 800 mg MOTRIN a day to endure the after effects from the training that went into achieving it... Back then we had to take turns going down to MEXICO to buy those dosages (& the pills were orange, but the same config)... Actually ~ it didn't exactly hurt that much in the moment... You're in your 20's and in a STALLONE movie thinking your whole life is ahead of you... But that's the way pretty much everything is anyway... I can't exactly blame SLY 4 it  (& don't) Chrissakes ~ I just realized that I linked the wrong video... THIS was the 1:46 jump I was talking about (dude in the middle in the green shirt)

In reply to by apu123

Endgame Napoleon nope-1004 Tue, 10/10/2017 - 17:21 Permalink

Cryptos are kind of cool, in that programmers design them. I did not understand that until I read that ad by Altucher. There is an art behind the cryptos, but if you are not a programmer, how would you know which one is expertly crafted?

It is amazing that programmers will be the new bankers. Hmmm. Who would have predicted it? It will put people out of work, but it will add other jobs. Thing is, fewer people are good at programming than banking.

It is not surprising that Queen Elizabeth wanted to protect jobs. She was also the first monarch to let parliament play a significant role in governing. Queen Elizabeth I was one of the few good monarchs, period, from the standpoint of governing, not from the standpoint of fostering an art culture. The French monarchs win that prize, followed by the Spaniards and the Italians of the Renaissance Era. Really, the Medici weren't all monarchs.

In reply to by nope-1004

Antifaschistische nope-1004 Tue, 10/10/2017 - 18:01 Permalink

I have nothing against crypto's at all...but saying you will sell something for $200,000 but you will also exchange it for $200,000 WORTH of bitcoin, or stamps, or starbucks gift cards......means nothing to me as long as you still REQUIRE it to be converted into US DOLLARS to mean anything.  Same is true with all fiats.  Any fiat (including bitcoin) will be legitimized when it DOES NOT have to be converted to US Dollars to be with anything.

In reply to by nope-1004

overbet VD Tue, 10/10/2017 - 17:47 Permalink

You keep saying that it is a CIA/NSA alphabet soup invention. Ive read the old whitepaper on cryptos. I found it irrelevant. Mind sharing what has you so convinced? If a man is as convinced as you seem to be I am very interested in what got you there. 

In reply to by VD

VD overbet Tue, 10/10/2017 - 17:57 Permalink

this has been gone over here ad nasuem. the same buy silver crash jpm scam is happening again and even some of the very same muppets burned by that are now here are pumping this.  BREAKING: "“We have seen how Bitcoin has transformed a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is the definition of a pyramid.”--Putin  

In reply to by overbet