The pen may have historically been mightier than the sword, but time may show us that the Dapp is mightier than the pen. It is currently accurate to state that the physical world is ruled by the contractual world, that is, ideas written on paper, but digital assets stored on our phones give the power back to the individual, who no longer needs any centralized authority to verify the contract and signatures.
This ‘pen’ that is used to sign our name to contracts that bind our behavior in the physical realm may eventually be superseded by our smart contracts that bind the transactions of our crypto assets. This physical representation of our word as our bond, represented by our act of using a pen to sign our name to the paper contract, can now be accomplished with our private keys on our phones without needing any 3rd party to record them.
These paper entities are not any more than ideas written on paper, with 2 individuals coming to a contractual agreement that is recorded on the paper, we now can record our own agreements on the blockchain and choose to print our own wallets, if we want a physical version of our digital assets. All any government or corporation really is, mere ideas stored on paper contracts, does not have any power in the physical realm without a living individual to enforce the terms of the contract. Our newly developed programable smart-contracts can still offer physical results but do not rely on anyone’s permission to record them, nor allow anyone to elect to selectively enforce them.
Self-defense in the Paper Realm begins with studying the rules, the strategies, the tactics, & tools of the big league all-star players in the money game, only then taking action to implement the tactics using the tools in alignment with the strategies used by the winners in the money game. Only after positioning one's entities properly can safe action be taken, and understanding of what position to take can only come with the study of what the rule makers do, not what they say. Tax evasion may be a criminal offense in the eyes of the State, but tax avoidance is not only legal but commendable. Likewise, operating a public ‘money transmission service without a license’ may also be criminal, but private purchasing of precious metals with digital assets is not, and if done internationally has no reporting requirements.
I am suggesting that safely sailing the crypto-seas as a Crypto-Captain can only be accomplished if one has done the paperwork necessary to establish who one is (sovereign operating in private vs. subject operating in public), what one is authorized to do (private exchange of assets vs. public transmission of money), and who has authority over your vessel (private property vs. publicly created entity). Choosing which flag to fly, who has jurisdictional authority over you, and which vessel is safest to operate is a prerequisite to successfully implementing these strategies. For the first time in history, individuals have freedom of choice regarding monetary selections, jurisdictional authority, and business structuring.
What truly qualifies one as a Privateer is the ‘Writ of Authority’, stating which flag your vessel is flying under, what activities your private charter authorizes, and identifies your standing in the private domain, as opposed to the public which grants Nation-States authority to protect public interests.
What has changed in the world today is that there is real competition not just for our choice of money but also for jurisdictional authority over our business operations. There now exists a choice as to the location one chooses, deciding which jurisdictional authority will have control over one’s business operations, especially for those working without any geofencing in a decentralized, un-censorable, open-source, yet private blockchain.
Here’s a snapshot of the rules as they are written, yet rarely read except by specialists:
Notice Trust Entities do not have the same KYC requirements that individuals or Corporations, LLCs, or LLPs!
There exist multiple options as to which class of business entity is most suited for each aspect of a business, each having a place in a well-crafted strategy. Those operating under the rules written by the informed for the informed, use a very different set of tools and tactics than those attempting to operate their business endeavors using the rules designed for the uninformed by their rulers. These tools and tactics are not being taught publicly, only privately, as those with the Gold, writing the rules, are keeping these strategies to themselves.
The rulers are not going to provide the ruled with the means to liberate themselves from being ruled over. One has to learn these strategies, tactics, and tools through observation of the actions of those that wrote the rules, deducing them for oneself, or by being born into the ruling class having them handed down to one as simply the way things are done.
This is exactly what I am sharing these ideas here...
These are the modeled patterns of behavior implemented by the ruling class, pointing out what they do, not what they say. These are the solutions used by the elite players in the business realm, strategies to hold onto as general principles, not as a one-size-fits-all pattern, but as a template intended to be modified for each individual situation and application.
"FORMATION OF A TRUST DOES NOT GENERALLY REQUIRE ANY ACTION BY THE STATE… IDENTIFYING A BENEFICIAL OWNER FROM AMONG THESE PARTIES WOULD NOT BE POSSIBLE"!!!
One of the foundational strategies that create similarities between those at the top and the bottom, is that neither the houseless pauper living on the street nor the millionaire in the mansion actually ‘own’ anything. Titling of assets in one’s name creates a liability and makes one a target for all thieves, i.e., thugs, governments, corporations, lawyers, with and without badges or uniforms. The informed recognize that it is ‘control’ not ‘ownership’ that matters, it literally is the possession of the keys to the limo or the mansion that grants beneficial use of the assets, but only if one has the paper granting authority to use them.
This is no different in the crypto-realm than in the paper or physical realm. If you do not have control of the private keys to your crypto wallets, you do not control your crypto. In the paper realm, it is having your name on the contract, deed, or certificate of beneficial interest that grants control, just as the physical keys grant access through the gate and doors of the mansion. The business entity, that in legalese is also considered a ‘person’, used by those ‘in the know’, is known as a Trust and is hardly ever taught to the working class as an option for structuring their business operations.
I find interesting the intersection of the use of this word in both realms;
TRUST
Bringing me to recognize that ‘Trust is the heart of the matter’. Who has it? Is it necessary? If so, how much is given and to what things? What is new with Bitcoin and all the truly decentralized open-source cryptographic solutions, is that for the first time it is not necessary to Trust anyone as the man-in-the-middle when exchanging assets with another party that we do not know we can Trust. What we now call trustless transactions, have become feasible for the first time. But it is important to remember not to through the baby out with the bathwater, there still can be a place in our strategies for Trust in a limited capacity, given by choice to limited parties granting control over limited amounts. This is especially relevant when it comes to physical assets, as they require protective custody & if we don’t want to assume the risk and responsibility of managing that ourselves at all times then trusting another to do that is the only option.
The revolution that cryptocurrencies bring to the people is the lack of risk that physically overwhelming force can be used to simply take control of our wealth, and Trace Mayer put it perfectly, "No amount of physical force can solve a math problem.". The monetary freedom is negated if one elects to have someone else manage the digital defenses of our virtual wealth by holding them in an exchange, or even a Trust that holds the private keys for you. Doing this is simply another version of carrying over horse-and-buggy thinking to operating an automobile, the same as happens when imagining that an ATM is needed for dispensing BTC; every storefront that has cash in its register and every neighbor that has cash in their pockets can now operate as an automated teller machine.
I just happened to have been discussing Trust structures with a lifetime professional specialist in the field of legal asset protection, the same day my kids happened to watch a movie called ‘The Secret of Moonacre’. I realized that this story provided me with a way to explain Trust use and application to not only my 13-year-old daughter but also as a metaphor to translate these patterns to those unused to these concepts.
This film perfectly demonstrated all the roles and the purpose of a Trust entity, in story format;
It begins with a young girl being magically transported into a magical realm where she discovers that she has been called there to protect the kingdom that is about to be dissolved. The entire valley was to be lost if someone could not locate the “Moon Pearls” that granted power over the kingdom. These magical tokens had been fought over by the 2 Kings entrusted to rule over the valley; one that ruled the urban, polite and clean peoples that lived near the castle, and the other that ruled over the rural, crass, and unkempt people that lived in the woods. When these Kings began to fight between themselves over the possession of the Pearls, the “Moon Princess” appeared, took the Pearls and gave them 1 year to find someone that could be trusted to keep them safe again.
The Hero of the story had been called there as an innocent that was trustworthy to help find the lost Pearls and save the valley. When she accepted the role as trusted keeper of the peace, the Moon Princess appeared and gave her the Pearls granting control over the valley.
The Moon Princess was fulfilling the duties of the Trust Protector, the 2 Kings had failed in their roles as Trustees guarding the asset represented by the valley for the beneficiaries, the people of the valley. By removing access to the magical token in the form of the Pearls, the Trust Protector took the control of the asset from them and when the Trust had no assets it was to be dissolved. Unless the Trust Successor stepped up as the New Trustee and was given access to the tokenized keys that granted control over the assets in the form of the Valley. Allowing the Beneficiaries, the people, to continue to have use of the valley for their own benefit.
I had the asset protection lawyer explain it to me thusly earlier in the day;
When the Church demanded that the various Kings go off to fight a holy war, the King chose a trusted representative to look over the land, the people, the castle and the treasury left behind by the King. Not as his own, but on behalf of the King granting him custodial control, not ownership of these assets. The only role not represented in the movie was that of the Grantor that created the pearls in the first place, granting control over the valley to the Kings to safeguard for the people.
Those that are familiar with cryptocurrency will see the similarity of asset control in the Virtual Realm to that of Trust structures in the Paper Realm. As tokenized assets are accessed with private keys that grant control over the asset/s represented by the token; be that Gold (the currency of Kings), Castles (the abode of Kings), or livestock (the commodity of Kings). The term ‘King’ is appropriate because no permission, nor forgiveness, is needed for one that is sovereign in his own right. Now, this is also the case for private Trust agreements that do not register with any Secretary of State.
Creating a Statutory Trust grants authority to the State merely by recognizing that it has jurisdictional rights. These Statutory Trusts, because they are effectively created in the Public Domain when registered become subject to public scrutiny. This grants the State authority to demand that the Beneficial Owners of the Trust be named and identified, while a private contract between individuals does not have the same breach of the veil of privacy protecting the Beneficiaries.
My legal professional also had an ‘ah-ha’ moment when I was showing him the website for the Winklevoss twins, the Harvard graduates that became the 1st known crypto-billionaires. Their Gemini Exchange is owned by the Gemini Trust LLC, and my lawyer friend pointed out that obviously the intellectual property of the website was owned by the LLC with the Trust controlling the actual crypto assets of the exchange.
My previous asset protection studies recommended as a standard procedure that every Trust should have its Certificates of Beneficial Interest held by yet another Trust. And each asset class should also have its own Trust entity to compartmentalize risk between them. So, for example, there might be a Trust that holds real estate, another that holds title to the vehicles, and now another holding the keys to the crypto cold wallets, with all of them having yet another ‘holding trust’ as the beneficiary of all the others. With only a single enumerated entity in the form of a corporation or LLC that operates as a ‘transactional entity’ to interact with the banking institutions, while having its ownership held by the various Trusts, excluding the Holding Trust which is twice removed from the enumerated State-created entity.
Put into practice this might look like this:
A Nevada Land Trust is created to control the real estate purchased in Puerto Rico and elsewhere, while a private Texas Transactional Trust creates a TD Ameritrade account with Wells Fargo to acquire crypto through the Gemini Exchange. A Delaware Holding Trust is created to hold the CBIs of both the other Trusts, that are also the owners of the Puerto Rico Corporation that is created to form its own International Financial Entity under Act 273, with a Managing Member (who may also happen to be the beneficiary of the Delaware Trust) as the position established to run the banking operations for the enumerated entity.
So then, this individual that is the Managing Member of the Puerto Rico LLC, if a resident of PR would have no filing requirements with the IRS under Act 22, would owe no taxes to PR on income earned outside of PR, and owe no taxes on either capital gains nor dividends paid from the PR corporation which only owes 4% in taxes to PR. This IFE would be authorized as a money transmission service so would not be violating any regulations regarding transmitting money without a license when accepting fiat currency, cryptocurrency, and/or precious metals. (The Manager of the IFE could then hire a cybersecurity professional to physically exchange passwords in an OTC transaction, with a professional martial artist watching his back and a professional marksman watching them both from a distance as they left the premises, without any risk to his own person, and all risks, physical and legal, properly managed as much as possible.)
I invite any and all professionals in any of the related industries to critique this scenario and point out any weaknesses in strategy, tactics, and tools that I may have missed. I am not a licensed financial planner, certified public accountant, nor a lawyer.
## This is intended only for educational and entertainment purposes, not as legal, financial, nor tax advice. As always, DO YOUR OWN RESEARCH, and consult your own trusted professionals before taking action.
In part 3 of this series, I will delve into the cybersecurity protocols designed to maintain not just privacy but also anonymity in the Virtual Realm when transmitting any digital information, made even more important when dealing with the private keys to very large amounts of crypto assets.