I realize this is 10-12 years ago, but the analysis here is quite interesting in applicability to other cases -- Megaupload, jurisdictional issues in general, etc.
I was really surprised at their server farm; I always figured (from the original Wired article) that it was fairly busy with servers.
I guess losing the fiber optic link kind of ruined that. Or, you know, having to put your customers' data into a Zodiac to hang out on a plank of metal in the sea.
That photo was early in the buildout, but yeah, it was a single 300 square foot circular room in one of the towers with 5-10 racks, loosely populated.
We planned to raise $3-5mm plus followon financing, and ended up raising only $1.5mm or so, most of which was spent on mechanical/life safety upgrades to the facility -- we didn't have a whole lot left for datacenter. Losing the 155Mbps link was a big problem -- the best we had was 4xE1 (8Mbps), some caching/CDN, and 128-512k of satellite. Thus, our costs never dropped the way we wanted, so we couldn't really be price competitive.
Wired has a 3-6 month lead time, so the Wired article actually got written while we were first looking at the buildout. This happened to overlap with the collapse of the dotcom bubble.
Each side was 7 (I think) hollow 300sq ft concrete rooms, circular. We had forced air circulation, and AC in the "datacenter" tower (which was 2 rooms of datacenter, some power conditioning, and a NOC); just forced air in the residential one (and some heating using electrical heaters).
During the war, those towers were where people lived, and the lowest levels were shell magazines for the big AA guns (3.9"?). They had a bigger superstructure, too. I absolutely would not have wanted to have been there with 300 people; even with 6-10 it was pretty bad.
I haven't tried to find a cached/mirrored copy of their original sales/pricing page, but from what I remember they explicitly refused 'customer equipment', claiming security risks. The cost included a setup fee which essentially purchased you a brand new rack server already on site. I can't recall what their policy on cancellation was, but I think it was either 'we'll return the whole machine to you' or 'we'll destroy it on your behalf'.
Having new machines shipped out also seems like a better proposition from a risk perspective, since hardware isn't cheap, but it's a whole lot less than some irreplaceable customer hardware, software, or data.
It's amazingly accurate (I did help him with fact checking about a year ago, and some URLs for photos and things, but I think it was 99% accurate to begin with -- the only thing I pointed out was a purely technical point).
He had better insight into the legal issues than we (or any of the lawyers we talked to) did.
I still think it failed primarily because the economics changed under our feet (prices went from $2-3k to $20-30 within 2 years), and because we didn't raise enough money. The team could have been a bit better (and would be, today; I was like 20 years old back when we did this, and none of us had done a traditional startup before), but the brick wall we were up against on pricing and financing was pretty much a deal killer.
I don't think any of this is strong evidence against a similar effort working today (not an offshore platform for hosting, but cryptographic systems, or offshore for HR/visa compliance, or just for cost advantages).
The basic strategy of trying to push only a single challenge (technical or legal or whatever) vs. trying to innovate on everything at once, is valid.
How would a similar extra-legal data haven work today?
Let's say cost is not an issue - some people with deep pockets have things they think are worth it to host outside the law, and will pay you with bitcoin (run through a bitcoin pool operating on the extra-legal territory itself).
How do you get around the fact that all your internet links will be run by companies in real countries subject to legal orders?
How do you get around the fact that any ragtag band of pirates can board and take over your "island" nation? Do you hire a team from G4S to guard your ship? G4S or any other security entity would be subject to laws and court orders, too.
If it's not a ship, but an actual island, you still have most of the same problems. Even if it's populated to provide some measure of physical security (you can't bomb an island with innocent civilians on it without a lot of bad press, not that other governments would need to bomb to shut you down), won't the existing government care more about protecting tourism and/or the interests of the natives before they care about protecting a data haven?
For hosting static data, it's trivial to build a distributed cryptographic system which is arbitrarily censorship resistant. The trivial way is to distribute a large file encrypted, then once it's widely seeded, publish the key. It's really hard to censor a short string, basically as hard as censoring an idea.
For transaction processing systems which need to be durable, I'd go with something with multiple levels of indirection on the network, using links which are locally secure for short periods of time. Sort of like tor/onion routing with hidden services.
You might still put your processing nodes in a concrete fortress of some kind, but they're basically anonymous data processing equipment. Use tamper-resistant technology and the worst that happens to them is denial of service.
The point of having a published high profile physical location (like Sealand) is to claim jurisdiction there, and thus get some legal benefits in interacting with other jurisdictions. To the extent that everything can be done on the Internet, you don't particularly need that.
Further, if you're hosting content that makes governments unhappy (say, WikiLeaks-esque data that casts other sovereign nations in a bad light, or actively hurts their country like a list of undercover operatives), what is to stop them from using their military to take over your sovereign country?
Wars happen all the time, and you have no military of your own.
Do you agree with the conclusions about it being better to change the law (since it is supposed to work for all of us) rather than attempting to subvert it?
I think eventually some smaller nations will catch on and become secure offshore data and processing hubs, just as today there is an entire economy around offshore finance. We will probably look back at DataCo as being a few decades ahead of time.
I believe in using purely software or technical means where possible (PGP to defeat unlawful wiretaps, Start-TLS to protect against echelon), followed by social pressure (i.e. "it's rude to rip off someone's work", vs. enforcing it with laws).
Do a good job of articulating socially good uses. PGP to protect you from spies is unrealistic, PGP to protect you from the law if you are a criminal is both unrealistic and bad PR, but filevault to protect my SSN when your laptop is stolen, that's a much easier win -- it's just hard technically and inertia, but those are easier than active political or legal opposition to overcome.
In parallel with that, try for political change, ideally using tech as much as possible to support that -- I wasn't an Obama voter, but what the 2008 campaign did with social media was transformative.
If all those fail, sure, consider doing something crazy like Sealand or offshore corporations or whatever, but ultimately I'd rather live in a first-world country WITH good laws, than something with technical or jurisdictional hacks.
Nauru is (or was) trying to do this. http://www.thisamericanlife.org/radio-archives/episode/253/t... is where I heard about it, but this story aired almost a decade ago so I don't know what's happened since. I assume it didn't pan out. Nauru is kind of hard to get information on, because of its obscurity and isolation.
I remember looking at HavenCo's prices frequently, but couldn't afford to host there. For the price you had to make money and we were sailing on voluntary member payments. And what we were doing required serious bandwidth...
If I was a billionaire I would probably buy Nauru[1], it's a 21km2 independent island state with <10k people and GDP ~30M$, which comes at 3000$ per capita. I would offer 50.000k$ to every citizen (more than they will earn in 15 years), which comes down to 500M$, to abdicate authority trough democratic process and move off the island (or possibly stay and work for me). Then build your own benevolent dictatorship that's already recognized internationally as a state.
You'd have to be creative with the economy. Nauru is literally made of shit. The phosphate-rich soil has been basically completely mined, so it has very little natural resources. It's very expensive to have humans living on an island with little natural resources. You'd have to be very creative in your business model to make this work. But I imagine that's your point entirely: the business model would be founded on the "benevolent" dictatorship which would have the latitude to create a completely unique economic system that could attract particular types of business ventures.
IMO you could afford to build high tech self sustaining enviroment for <50k people easily, a few micro nuclear reactors [1] would provide enough electricity, hydroponics, seafood farming, or advanced things like protein from bacteria/algae protein for food production, import the luxuries. They seem to have drinkable fresh water source, and with enough power and cash desalination is viable.
The fantasy business model would be to be rich enough to be able to personally cover these costs and establish a high tech R&D environment :) I'm not suggesting that this is actually possible, it's one of those things - what would I do if I had Bill Gates kind of money.
This sounds like an extremely high-cost environment. How would you compete with high tech R&D centers around the world that may have 1/10th or 1/100th the costs? I'm not saying you can't compete, but I think you'd have to offer something (1) that you couldn't get anywhere else but Nauru and (2) is in very high demand.
(And by the way, not trying to rain on your parade; on the contrary, I find this discussion fascinating, so thanks for starting it.)
You'd be fine. Just let the inspectors in and be super-transparent. Plenty of people have research reactors, and if you aren't a belligerent theocracy, you shouldn't have much of a problem. Just play nice.
Micro nuclear reactors don't have weapons grade uranium/plutonium in large quantities, AFAIK at best they could be used to build a dirty bomb. And what would be the point of that ? I'm not proposing building a religious sect, just a society of hand picked individuals from different fields, like engineering, natural sciences, architecture, arts etc.
My undergraduate institution (Reed College) has a student operated nuclear reactor on campus. No weapons grade nuclear material, and it wouldn't make a very good dirty bomb either. However, it's useful for bombarding things with neutrons and it does give off a pretty blue light because of Cherenkov radiation: http://en.wikipedia.org/wiki/Reed_Research_Reactor.
Given Nauru's isolation and exposure to the elements, I'd
rather install a couple 7.5MW Enercom wind turbines, a few
MW worth of solar panels and maybe a tidal generator instead
of a nuclear reactor.
Ok, fine. So you're a billionaire with an island nation state and (presumably) a private army to protect it. As a business owner, I then have the choice of doing my business in a major Western democracy with an elected government that is publically answerable to millions of people, or subjecting my business to the whims of an eccentric billionaire with his own private army who is answerable to no one.
If you want to do that with your own billions, have at it. But I wouldn't want to locate a business there, do business with you, or even go to work for you, an employer from whom I could have no possible legal recourse in the event of a dispute.
> an employer from whom I could have no possible legal recourse in the event of a dispute.
That part is easily solved: the dictator can put up a bond in some trusted country. The bond is forfeited if the dictator betrays you. The contract laws of the trusted country apply.
It could be that some enterprising dictator could gain a better reputation for respect of property than the US government[1]. A reputation for respecting property rights, combined with a country, is an extremely lucrative asset, and it would be costly to lose it.
> As a business owner, I then have the choice of doing my business in a major Western democracy with an elected government
If moonchrome can offer a better regulatory environment, you might prefer to do business with him. Maybe your business is melanoma detection. HN user danifong approached YCombinator with that idea, and Graham told her[2]: “The trouble with the melanoma detection idea is that you’d spend most of your time dealing with legal and regulatory crap. That sort of work doesn’t really take advantage of your skills.”
For all the issues that can crop up with property rights around the margins in the US, the EU, and any other established democracies, doing business in a country where decades or centuries of history has established a strong general belief in property rights and the rule of law gives you a very strong set of baseline protections. Abandoning that for a brand new country where what one guy says goes introduces a whole new kind of risk that most of us here at HN are not used to dealing with and factoring in.
For example, requiring a dictator to post bond is all well and good until he decides at some point while you're within his borders that he's going to (a) kill you, in which case collecting on the bond won't you much good, though it will soften the blow for your investors, or (b) start cutting off toes and fingers until you release the bond. (Obviously you could structure the bond in such a way that option (b) is unworkable, which means that it either becomes a straight up hostage ransom situation, or reduces to option (a).)
Even given all of that, you're right that it still might make sense to do business there for a particular kind of business given a particular risk tolerance. It might well be an experiment worth trying. By the same token, if you develop a new kind of versatile routing software that does an especially good job of finding the optimal approach to trying to route materials past someone who is actively trying to stop you, selling it to Mexican drug lords might be an experiment worth trying. Just make sure you have a really good idea what you're getting into and that the risks to your person as well as your business are worth it to you.
That's basically what happened in Sealand (discussed in the article). HavenCo moved there to be supposedly free of government intervention, but instead what they found was that they were subject to the whims of a very small, very eccentric government. In 2003, following a dispute between HavenCo and Prince Regent Michael (the acting Sealand head of state and head of government, standing in for his father), HavenCo was "effectively nationalized"; Sealand's government took operational control of its servers, and everyone else associated with the company had their visas revoked.
Exactly. The premise that you can allow businesses to operate outside the interference of government by setting up a new government is a category error.
>If you want to do that with your own billions, have at it. But I wouldn't want to locate a business there, do business with you, or even go to work for you, an employer from whom I could have no possible legal recourse in the event of a dispute.
It sounds like you are risk averse and probably don't share the goals, wouldn't be swayed by the value proposition - so you wouldn't move there. It's true that there would have to be trust in the person doing this, but I'm assuming the billions didn't drop from the sky and I have done something to earn them, the process of getting them should provide plenty of material to evaluate my trustworthiness. Trusted third party insurance is also an option.
> I would offer 50.000k$ to every citizen to abdicate authority trough democratic process and move off the island (or possibly stay and work for me).
History teaches us that there will always be hold-outs and that the most effective way to achieve this goal is through brute force. This is how the U.S. base in Diego Garcia came to be. The islanders who lived there were forcibly deported from their homes in the 1970s by the British who owned the islands.
>History teaches us that there will always be hold-outs and that the most effective way to achieve this goal is through brute force.
That's assuming you want them all of the island and that you need everyone's consent to take over, you just need the majority to be take power trough democratic process and the few that wish to remain could be employed/incorporated in to the state.
True. And yes, please keep thinking of alternatives to brute force. :)
I recently read a fascinating book called "Miles from Nowhere" which described life in the least populated counties in the U.S. One recurring theme is that counties with almost no one living in them are subject to being taken over by groups with their own agenda. For example, a county with only 150 people in it might be the target of a group of libertarians. 800 libertarians may agree to move there to set up a libertarian government. The point the book made was that virtually uninhabited is very different than uninhabited, and that there are still people there who have wishes, dreams and rights of their own.
So what you are describing is actually an act of force. Overtaking Nauru for your own purposes is a unilateral destruction of someone's home. Imagine for some odd reason the entire population of China decided to buy out and relocate to your city and turn it into a Chinese culture and economy. You may have nothing against the Chinese or Chinese culture, but you may wish to simply keep your home city as is.
Democracy is often thought of as peaceful, but it can often be a vehicle for the majority to disregard the legitimate needs of the minority.
Looks like a really interesting book - they do cover the remote bits of Oregon, right? There is some incredible country out there - it can feel a bit creepy to be so far from anything.
Yes, the "empty quarter" or "outback" of Oregon is mentioned, especially the amazing challenges of census workers in the region.
If you like geography, this book is a good read. It's a bit dated, having been written in the early 1990s, but this, in my opinion, turns out to be a good thing. It gives us some great glimpses of how isolated these communities were and I'm sure the Internet has since changed this considerably.
>Democracy is often thought of as peaceful, but it can often be a vehicle for the majority to disregard the legitimate needs of the minority.
But that's the system they already live in, I wouldn't change that, I would just use that system to achieve my goal. I agree that it's not completely moral but that's inherent in democracies, even with constitutions protecting the minorities, they will always be subjected to mob rule.
> You may have nothing against the Chinese or Chinese culture, but you may wish to simply keep your home city as is.
But I don't have any right to do that. I only own my own home/property; 'my' home city as a whole doesn't belong to me. Attempting to control what my neighbors may do with their homes and what kind of social arrangements they'll be allowed to participate in, to the point of trying to exclude entire ethnic groups from settling within some arbitrary boundaries - simply because I feel some personal sense of propriety over what doesn't actually belong to me - is the more direct and clear act of brute force here.
> Overtaking Nauru for your own purposes is a unilateral destruction of someone's home.
No, it isn't. Unilaterally destroying someone's home is a unilateral destruction of someone's home. Purchasing people's homes with their consent, and leaving alone those who don't want to sell, isn't destruction of anything.
I would imagine that the UN woudl say that any contract "to abdicate authority through democratic process " would be invalid and unenforcable. - they will point to the enableing act on 36 in germany and the UNDHR.
For example you can sign a contract to waive your rights to anual leave but its invalid and unenforcable.
In my fantasy billionaire scenario hiring PMC would be a viable option. Also, with lot's of cash to throw around - how hard would it be to build an alliance with neighboring states, bribing politicians, "friendly relations", etc. You would probably trade with them anyway, build a few facilities there to please the people/sell the story.
If the data contained on your servers is bothersome enough to the US, then their military will simply bomb your tiny state out of existence, which is made even simpler if there is no one around to stand up for you. I've had this idea, both in the form of a small country, like yours, and in the form of a large ship, forever sailing the world's oceans, never docking anywhere, but both are easy targets. Far up in space or deep down in the ocean are likely the only good scenarios, and neither of those is cheap or easy.
This should be mandatory reading for "Internet generation" entrepreneurs.
It is a clear exposition on why people need to engage their local institutions to change the law to meet their needs, rather than to try to create from whole cloth new institutions. When folks argue that changing the law of the land is 'hard' I do not disagree, but when they say creating something new from scratch is 'easier' I do. Like a manager who just sees the effects of the software and not how it achieves those effects, creation tends to look easier to the ignorant than to the experienced.
Anyway, there are great lessons to be learned in the story of Sealand.
A series of small cases with a 12 volt auto plug, a small fanless computer, some batteries, and a 3G wireless connection. Hire some vehicle operators to keep it plugged in while they are moving. Once started, they will need a daily activation code to keep operating, otherwise they erase their hard drive encryption key and deactivate, requiring their encryption key to reactivate.
The small cases will constitute a low-powered cloud with no permanent address. If a case is seized in a raid, it becomes inactivated.
Your version of a datahaven seems flawed. What if no-one want to sell you connectivity? How will you manage what adresses they are accassible on? Heck, you even made your data trackable down to a few meters by using GSM.
Granted. I was just thinking of what could be done with off the shelf parts.
I think the scheme can stymie anyone without a wiretapping or a search warrant. Eventually, the law will change to adapt.
How will you manage what addresses they are accessible on?
Steganographic messages posted on darknets over TOR.
Heck, you even made your data trackable down to a few meters by using GSM.
My design goal is to let the authorities eventually shut down the operation, but still deny them any information when they do. I think that's as far as one can practically go with off the shelf hardware.
People talked about things like that after Tunisia and Egypt, for local organizing (maybe combined with SMS, BTS, etc. capability). A lot of the most interesting data is both highly time sensitive (where are police suppressing riots right now) and local (within a few blocks).
I suspect there's a fair bit of USAID, DOD, etc. funding available to make reliable systems like that. It would also be great post natural disaster, some kind of automated repeater and bulletin board system which works with an existing base of smartphones.
I think you got the cooling problems backwards. In vacuum it's a lot harder to get rid of excess heat than it is inside an atmosphere. Latency might be a bit of a bummer.
The Outer Space Treaty specifically says that no country can claim sovereignty over outer space or celestial objects, that countries retain ownership of anything they launch into space, and that they are liable for damage they cause to any other countries space objects (or people on them). The treaty has been signed and ratified by all major space faring nations, including the US, Russia, China, and all major European countries.
I think the review plays down one thing - time. Sealand may (I'm not a lawyer, and certainly not an expert in the laws of statehood) become a state if:
* It stays independent.
* It obtains a sustainable population.
* Commercial independence. Not just as a "data haven", but hydroponic food production, and stuff being built there (possibly just IP, but more than just what you get from legal arbitrage).
* A functional community, with a rule of law.
Not too likely. The platform is simply to small to support any of this.
It would be way easier to find a "real" country and convince them of the merits of doing a favorable free trade zone, than to try to rehabilitate Sealand.
(our plan was actually to use Sealand to get press, and then develop both technical means like anonymous ecash, and political means (going to various neutralish countries to try to sell them on the idea), which is why we did such a big PR campaign)
The trouble is that you need to get enough customers quickly enough that they have more power than the governments opposing you!
eg. Switzerland, Lichtenstein, Monaco, the Channel Islands, most of the caribbean etc. The US could probably manage to shut any of them down if their 'customers' didn't have so much political clout in Washington
The difficulty is going to be getting enough customers who donate more to US politics than the MPAA/RIAA
I'm ignoring the core issue here but I just want to say:
SEALAND IS AWESOME
The location and structure itself I mean. What a sweet pad that'd be. Sure, it makes no sense from an economical standpoint. Or if you value safety. Or any logical reason really. But it's awesome.
The summary of this over at Ars Technica is great too. (http://arstechnica.com/tech-policy/news/2012/03/sealand-and-...)