BACK IN 2000, the HavenCo datahaven project was all the rage for Net-ziens, carefully spun through skillful manipulation of sympathetic media -- such as Wired -- as a bastion of freedom on the Internet. Based on the (allegedly) sovereign "state"/gun platform of Sealand, the (supposedly) secure co-location facility (web hosting by any other name), the hyped theory was (almost) anyone could put data out of the legal reach of other (better funded, more stable, less flaky) governments.

If you were doing something in a gray area, such as an Internet casino, pay-per-view video streaming without the blessing of movie companies, or trying to start your own currency, HavenCo was the place on the planet to escape the Oppressive foot of The Man (i.e. anyone with a government). But please, no kiddie-porn, spammers, or hackers – wouldn't want to legitimately piss anyone off.

In the words of G. Gordon Liddy, "Oh, ye suckers."

Ryan Lackey, one of HavenCo's founders and its former CTO, stood up at DEFCON 11 and 'fessed up on how dysfunctional the whole scheme was from a business and infrastructure standpoint. Most media "coverage" is an echo of Declan McCullagh's , but I think Ryan got a free pass in some areas. I was in the front row for the whole presentation and went back to look at both the presentation notes on line and old HavenCo. coverage.

Ryan is bitter, and I don't blame him. If I moved out to the middle-of-nowhere for nearly two years living (No chicks, same food, same scenery) on a second-rate platform ("Island Fortress" my ass), limited to three showers per week, and owed $220,000 plus stock (worth nothing) by HavenCo, I'd be more than a bit bitter.

But...

Nobody put a gun to Ryan's head to go out to Fantasy Island, er, Sealand. No one put a gun to Ryan's head to misrepresent the number of existing customers and presence of redundant infrastructure out at Sealand before the press. According to his DEFCON 11 presentation here, he was an active participant in the company from day one and even after the other founders left and handed over the keys to the operation to Sealand's "Prince" Michael in the Summer of '02.

He also actively participated in press whitewashing, including a BBC story done in July '02 saying the venture had been "profitable" since the summer of 2001 – but that didn't stop him from scorning the media for not trying to verify HavenCo's claims or truthfulness. (Of course, I guess this merely proves that the Beeb lives up to its poor reporting) While Ryan admits to making claims of having plenty of servers in the HavenCo "basement," reporters weren't allowed to wander around willy-nilly on the platform. Trade secrets of HavenCo, ya know. Nitrogen-filled machine rooms to keep out oxygen and intruders? Fiction.

HavenCo didn't get any venture funding during the height of the dot.com boom. Lackey blamed this on organizational problems with the founders, but I suspect another reason. Let's consider the following conversation with a VC throwing money at anyone who looks pretty (and the 2000 Wired article counts as pretty)—

"Our facility is based in the state of Sealand
"Sealand? Where's that?"
"It's a WWII gun platform 6 miles offshore the UK, leaders are Prince Roy and Prince Michael."
"Of the British Royal Family??"
"No, the Royal Family of Sealand. Made themselves royalty of the country."
"Appointed themselves royalty of the gun platform they are squatting on?"
"Yes, you've got it."
"Is this ah 'country' recognized by the UN or any other international body worth a damn?"
"No, but we have this shaky case based on no more than two or three incidents that's backed up by some pontificating windbags and a lot of wishful thinking."
"Uh, ok. So, um, the 'government' is how large?"
"About three people."
"No courts, then? How do you resolve business disputes with the government?"
"We have the word of Prince Roy and Prince Michael is part of the company. That's good enough for us because of our inbred mistrust of large Oppressive governments suppressing Internet freedom, like the United States of America."
"Thank you sooo very much for your time. Jane, could you send in the guy with the sock puppet?"

Ryan is now on a crusade/jihad to set the record straight. It's not good enough to watch HavenCo die of its own failings, so he's publishing all the things he couldn't/wouldn't talk about when he "inside," such as (the small) number of customers and (non-redundant, limited) infrastructure on the gun platform. While he didn't explicitly instruct DEFCONers to go hack HavenCo, he was kind enough to point out 2 Mbps of denial-of-service traffic would do it and provided IP addresses to the audience.

Lackey finished his DEFCON presentation with a rambling laundry list of other projects and schemes he was either (supposedly) working on or supported, including electronic untraceable cash, improved security products, and currently roaming the world trying to find a place to set up a "high-tech free trade zone" that will support pro-liberty ventures. The free trade zone would, of course, be equipped with a surplus tank company or two to preserve its independents from third parties. Why any country would agree to have an independent army not answerable to anyone but a board of directors within its borders is an interesting question best left for future VC or unemployed Taliban to ponder, but Ryan is rather casual about the prospects. And there's metacolo.com, Ryan's sequel to HavenCo. Why should anyone use it? First, you'd have to trust him about the infrastructure...

While I doubt Neil Stephenson is running around screaming "They're only stories, damn it," some meditation upon the HavenCo datahaven concept is worth rehashing. "Pro-liberty" Netziens are locked into a paradoxical mind-set that the only way to find True Data freedom is to escape their (cushy, relatively tolerant) democracy-based societies to utopian places with less government or no government. But it's funny how many of these Netopian dreamers are holding on to their (U.S./Western European) passports rather than trading them in for Third World ones.

As the HavenCo experience demonstrates, less/no government means being dependent upon a benevolent dictator (another paradoxical concept) for "free" operations. If the dictator dies or decides to change the rules a la Prince Roy/Prince Michael, you're screwed. Going to the UN for help won't do you any good, either. HavenCo, Metacolo, and future pro-liberty utopias are pre-doomed to failure without structured ways to resolve disputes between their "country of operation" and themselves. The only dictator you can ultimate trust is yourself. Even paying protection is, at best, a short-term solution.

The third paradox is the very public whoring of a datahaven. If you are making noises that you're going to set up something out of touch of Big Brother, it stands to reason that Big Brother is going to take more than a passing interest in your operations. After all, what are you hiding that you don't want taxed/monitored, hmm?

Ryan says he is going to set up his own electronic cash system (allegedly backed by $10K US of gold). Sure, you'd have privacy, just the sort of thing a Libertarian would want. Unfortunately, it's also the sort of thing that drug dealers and hard-core criminals would love. In a post-9/11 world, e-cash is not just a wet dream, it's the sort of the wet dream that will get you the sort of attention you supposedly want to avoid.

Perhaps the best solution should be found by looking to the words of Avi Freedman, one of HavenCo's investors. Back in the '90s, "We suck less" was a motto he used to compare his Philly-based ISP with the operations of others. For all their flaws and burdensome rules, democracies as a whole "suck less" than dictatorships and a better investment of time and energy would likely to be investing in making a democracy "suck less" than to try to find a paradoxical utopia that doesn't exist. µ