How to turn your hopeless LECD nation into the Saudi Arabia of drugs and the Switzerland of crypto

My name's Dominic Frisby. And way back when, I wrote what I believe to the the first book about bitcoin by a recognised publisher. One of the people I was lucky enough to interview for the book was Amir Taaki (you can hear that interview here). It was just as he was starting on his Dark Wallet project. And he convinced me of the potential of truly anonymous internet money.

At that time (early 2014) a lot of people struggled to understand what bitcoin was for. They didn't see why we need alternative, non-government currency to buy coffees in Shoreditch or the Bay Area when pounds or dollars are a lot less hassle. Many thought it was just some passing hipster fad. The whole "cash for the internet" thing was beyond the comprehension of many. They were happy with PayPal.   

One of the points I found myself repeatedly making was that black markets are usually the first to embrace new tech and turn it to profit - porn, for example, was probably the first sector to make money out of the internet - and the fact that the Silk Road and the copycat sites which followed, had risen up, and were being rapidly embraced, was testament to the fact that bitcoin works and has a practical use. Dark markets had been waiting to happen for years, as we all know, what was missing was a money system that could make them work. Along came bitcoin and the problem was solved almost overnight. Dark markets were the first place bitcoin found widespread, day-to-day, practical use for buying and selling stuff.  

Dark markets are now disrupting the international drugs market in the same way that the internet did for music and publishing.    

The problem with setting up a black market site is that the Feds will get you eventually. They got Ulbricht (Silk Road), they got Benthall (Silk Road 2) and they were about to get Cazes (AlphaBay), before he sadly got himself. Nevertheless the money to be made from a successful dark market site is so great many will take the risk   

The black market in Britain is 10% of the economy says the IEA. I googled "how big is the worldwide black market?" and the answer I got, dated to 2014, was $1.8trn. So I think it's fair to say it's now over $2trn. We’re talking a similar size market to the economies of the likes of Italy, France, India or the UK (unless I’ve got my maths wrong). It’s a big market.   So imagine the attraction of a country where you could set up a dark market site, but legally, without fear of getting lynched?    

All a country needs to do is legalize the buying and selling of drugs, and perhaps other illegal goods. In doing so, it legalizes the existence of dark market sites. Dark market entrepreneurs would flock to that country to set up shop, a large portion of the crypto economy would follow, particularly if tax and financial regulation were of a similarly libertarian persuasion.   Before you know it, bingo, that dominoes are lined up for that country become the Saudi Arabia of drugs and the Switzerland of crypto.

Once one country does it, others will follow.