Prince Filip Karađorđević is the current hereditary prince of Serbia. He is the second son of the heir to the Serbian throne Crown Prince Aleksandar Karađorđević and Princess Maria da Glória de Orléans e Bragança. He works in finance in the field of asset management and lives in Serbia with his wife Danica and son Stefan. He entered the world of Bitcoin as a “man of the people” who believes that “Bitcoin is the money of freedom”. For Crypto25, we asked him why he thinks that people need Bitcoin above all.
– In today’s world of dominant neoliberal capitalism, inequality and the rule of power and not justice, why is Bitcoin important in your opinion?
Neoliberal capitalism, with the fiat money system, plays by the rules of those in power, because they control the monetary policy. The fiat system therefore enables the rich to get rich and the poor to get poorer because those who are politically connected and friends with the bank get newly printed money. They have an arbitrage chance to spend money before prices rise, while those further down the supply will end up bearing the burden of inflation. This is the characteristic of the Cantillon effect, a much studied and understood economic phenomena caused by central banking.
As the result of this unfair advantage, inflation encourages short term growth over savings and long-term economic sustainability. Constant inflation forces the disadvantaged individuals to discount the future, meaning that they have to focus on today rather than think about what tomorrow might bring. Often having no choice but to spend today in order to survive rather than save.
With bitcoin, everyone has to play by the same rules. The person with the most bitcoin plays by the same rules as the person with the least bitcoin. Bitcoin is simply information, text or maths. Just like 1+1=2, no one can change that. No one can change bitcoin’s rules. This will play a huge part in fixing the inequalities of our world.
– What is your professional orientation and what connection does Bitcoin have with your work?
I currently work for an asset manager. The company I work for has no connection with bitcoin, until recently that is. They are launching a fund that invests in companies which have exposure to bitcoin. It’s funny, because some of the people running that fund teased me a few years ago when they learnt I got into bitcoin. They used to argue with me about how bitcoin mining is bad for the environment, that it is a scam or a pyramid scheme, and other usual baseless claims. Then ExxonMobil announced it is mining bitcoin to help its ESG score, and this silenced them. Now they’re tracking bitcoin related companies.
Given my passion and belief in bitcoin, I plan to work on furthering bitcoin knowledge and adoption both locally and globally.
– In the show Evening with Ivan Ivanović, you mentioned that it is necessary that “as a people, we should take away money from the states”. Why does the state tend to have a monopoly over money? Do you think it is important that citizens have the same rights as the state when it comes to money?
Through the creation of fiat money, central banking, championed by Keynesianism and monetarism, has done more damage to human civilisation than anything else. The idea of one centralised entity deciding the fiscal policy and money creation for millions of people is madness. The state monopolises money because it allows them to print money rather than having to directly tax people (but it still doesn’t stop them). Printing money is easier, subtler, and more lucrative than direct taxation.
This is fundamentally an argument about property rights. Money that individuals earn and save is their property, not the government’s. The government’s role is to protect private property, not steal it. A centralised power that constantly debases your hard-earned money, and your time, by printing money is both morally and ethically wrong. Every individual has the right to be able to turn their hard work into savings they can rely on for the future.
– Some of the greatest scientists in the world came from this area. As you mentioned, Serbia is a tech savvy country. Do you think that Serbia (Serbian people and Serbian companies) can contribute to the Bitcoin ecosystem and in what way?
Some of the world’s greatest minds have originated from Serbia. I like to say that Tesla would have been a bitcoiner. I am encouraged to meet passionate bitcoiners in Serbia who actively work on or contribute to bitcoin. Some of them work for Serbian companies, some of them work for foreign companies, and some of them work independently.
Everywhere in the world comes with its own needs, and Serbia’s perspective given its history can contribute a lot of wisdom about the value of bitcoin. That wisdom can spark a passion for quality, because they know how important it is to get things right. That in turn can inspire other nations that have been through similarly troubled pasts.
– This year you participated in the Bitcoin conference. On it, you mentioned that 10% of any citizen’s salary should go to a Bitcoin pension fund. As a portfolio manager, what are the reasons for such an attitude?
Contrary to popular belief and current sentiment, bitcoin is a not a risky asset. Bitcoin is the most secure and safest asset ever discovered. Only with bitcoin can people be certain about their savings, by holding their own keys and running their own nodes, rather than trusting third parties that routinely cheat them, or worse, resorted to hyperinflation and outright plunder.
A 10% allocation to bitcoin is just the start; if you can allocate more then do it. I say this because I personally believe the standard 60%/40% pension model is broken. Actually, I would go as far as to say that the assets that make up common pension funds are broken or about to break. Firstly, fixed income, the supposedly safe portion of a pension fund is not so safe anymore. In this low interest rate environment fixed income has no value. Bitcoin will sooner or later take over the fixed income or bond world. And equities are always at risk to crash. Yes, they have been on the best ride in history since the last great financial crisis of 2008, but that has been an artificial rally, fuelled by the low interest rate environment, quantitative easing, and financial stimulus. Company valuations, although falling recently, are still at ridiculous high levels. The fundamentals that make up equity markets are not what they used to be. They’re failing. This is all very unsustainable and will crash again, as it always does. Millions of people suffered as the result of their pensions being obliterated by the financial crisis of 2008. I sense another crisis around the corner, maybe bigger than 2008.
I am more relaxed knowing that my hard-earned savings is in bitcoin, the best and the only savings technology ever discovered.
– In what way can Bitcoin help Serbia, the Serbian economy and the citizens of the Serbian state?
Serbia can offer a lot to bitcoin, and bitcoin can offer a lot to Serbia. It is no secret that Serbia and the surrounding region has a brain drain problem. However, I’m not happy with the new crypto regulations in Serbia put into place last year. I was talking to fellow Serbian bitcoiners, and they tell me it is very difficult for new companies to start and for old companies to get licences. Despite this, I still believe Serbia can be a great bitcoin country.
Bitcoin will do many great things for our economy and citizens. We need more education and awareness. When people learn about bitcoin, and they get it, they often become humbler. The deflationary nature of bitcoin with its 21 million cap incentivises us to save rather than spend. Their time preferences are lowered because they put money away, they know it will still be there in the future, and will have appreciated in value instead of being debased. They feel more comfortable to have children and to start families knowing their savings are protected for the future. They will engage in productive and sustainable jobs or activities. More jobs will be created as a result, economies will become localised, and people will be better off and less stressed. And an economy shaped by bitcoin will be less or non-reliant on foreign monetary powers, such as the IMF or World Bank. A bitcoin economy focuses on producing real lasting value. Serbia with a bitcoin economy will encourage other Serbians around the world to move back.
I will work with local bitcoiners on education. I will also work on orange pilling as many influential people as possible. It is important that our state understands that if we make it a difficult environment for bitcoin in Serbia, then the fastest growing industry in the world will happily find other countries that welcomes bitcoin. This is simple government arbitrage.
– If Bitcoin were to be introduced as a legal means of payment in Serbia today, what problems would most often appear?
The main problem will be the technological barrier. Older people already struggle with smartphones. For a smooth transition, the introduction of bitcoin as legal tender would probably be done on top of the existing currency. With time, people will familiarise themselves with bitcoin. Meanwhile, bitcoin technology will continually get even more user friendly.
Another general problem is people often need to actually interact with the network to understand it. By actually getting to interact with it, they can learn that it can actually be more friendly than they thought. They can also begin to see how much they benefit by using bitcoin and lightning instead of traditional financial services. It may surprise them that it’s often, if not always, easier. Finally, they can begin to see what it’s like to hold bitcoin and see their savings appreciate in value instead of depreciate. All of this makes people naturally want to accumulate more bitcoin.
– You mentioned that Serbia needs a better Law on digital (crypto) assets. What changes would you suggest and what effects would those changes have on the development of the Bitcoin ecosystem in Serbia?
Serbia definitely needs better crypto regulations. I would say we need to go back to the drawing board.
In an ideal world, regulation should not be shielded from decentralization and free market competition. Meaning, that financial regulation should evolve organically within specific jurisdictions for specific reasons and goals. We need to focus on location-based rules that cater to an individual nation’s inherent risks and problems. Sadly, this is easier said than done in today’s mono-polar central banking and financial landscape.
The ideal and most reasonable approach would be to modernise the current regulatory landscape by introducing active “sessions” with industry experts that can help regulators understand what exactly is happening and what real problems exist within their respective industries, whether it be private banking, bitcoin, gambling, digital currencies, etc. These public forums would allow for two-way communication between constituents (the governed) and the rule-makers (the governing). Ultimately, regulation goals would be explicitly laid out and understood by both parties and the stakeholders that the regulation will inevitably affect. This should improve the overall quality and applicability of the regulation. Now, some would argue that this will just slow down the process even further, to which it may, at first. It is true that it will take a lot of time to unwind the bird’s nest of regulation that is out there today and simplify it to be both effective and enforceable for the businesses of today and tomorrow. However, after that is done, everyone will be better off than they are today and not afraid to innovate.
Very important policy recommendations are:
- Protect bitcoiner’s right to hold their own keys and run their own node
- Protect bitcoin developers’ freedom to write software
- Eliminate capital gains, as people should not be punished for saving money
Having said this about regulation, I believe that bitcoin will soon challenge what ownership actually means. Many bitcoiners have argued this. Bitcoin is purely an informational asset, it is nothing more than text or maths. This then becomes a philosophical problem: is it right to regulate or even outlaw information?
– The story mentions that the high volatility of the price is the main disadvantage of Bitcoin. We are witnessing that the shares of Facebook, Netflix and Amazon are in decline, and even the Russian ruble due to the war. Why is there a tendency to attribute the negative aspect of these economic indicators to Bitcoin alone?
Simply because bitcoin is new, it is seen as a threat to the current financial system. Those who have control of the mainstream media push every negative angle. I only see this as a positive. If any other asset in our world had to endure the same negativity that bitcoin gets, then that asset would be long gone. Bitcoin, on the other hand, gets stronger with every attack, not just against media attacks but actual existential attacks, like the mining ban in China in 2021. This only makes bitcoin stronger. Bitcoin is the best example of antifragility.
Yes, bitcoin is volatile. It is a young asset with only about 10 years of network effects. It is in price discovery mode, but one thing you can’t argue with is the price goes up more than down. Volatility is what makes bitcoin interesting for investors and savers. If it wasn’t volatile, it would signal that it is stagnant and already found its equilibrium. Those focused on the long term, which should be all of us, benefit from the opportunity this presents.
And why not use bitcoin’s current volatility to your advantage? By using dollar cost averaging (DCA)—that is to buy Bitcoin regularly, whether the same day every month or week or just every day—you will on average have a good entry price. Plus, this is also so much less stressful than trading. You’ll sleep easy knowing you’re stacking the safest asset in the world.
– At the Bitcoin conference in Miami this year, you had the opportunity to talk with some of the world’s biggest Bitcoin names like Stacey Herbert, Samsun Mow, etc… What are those acquaintances like and how would you describe the world’s Bitcoin community?
My life has changed since the Ivan Ivanovic show. Shortly after my 3 minutes talking about bitcoin went viral on Twitter, I found myself conversing with people I admire, such as Saifedean Ammous, author of The Bitcoin Standard. I then appeared on my first ever podcast with Daniel Prince (The Once Bitten Podcast), and others afterwards. I was invited to the bitcoin conference in Miami, where I had the opportunity to not only meet many of the biggest names in bitcoin, but so many other amazing bitcoiners. It was such an honour. I met so many intelligent, friendly, wise, funny individuals. But most importantly, every bitcoiner I met is humble. I didn’t come across any arrogance. This is something I cannot say for the legacy financial world.
– How do other royal families view cryptocurrencies, primarily Bitcoin?
To be honest, I’m not too sure at the moment. I am one of the first, if not the first to openly talk about bitcoin. With time I hope there will be more. Every opportunity I get I will talk to other royals about bitcoin. I will tell how it complements monarchy, and how both ideologies are about cultivating a low time preference.
I would like to note that Hans-Adam II, the reigning Prince of Liechtenstein, is an intellectual and a libertarian with an astute understanding of Austrian economics. I would not be surprised if Prince Hans-Adam II owns bitcoin.
– How do you see the impact of Bitcoin on monarchies around the world? How does Bitcoin, both as a monetary system and as a supranational ideological concept, relate to monarchical systems?
Monarchism in the 21st century can seem a bit odd to most people, so allow me to explain a bit.
While most people today associate monarchies with historical tyrants or modern tabloid fodder, Liechenstein provides a great modern example of what a monarchy can look like and how it can work symbiotically with the people hand indeed I think bitcoin can easily fit into the picture. Prince Hans-Adam II has expressed his vision of the state in the third millennium to be that of a service company. A monarch manages the affairs of a state that focuses on serving its citizens that which it does best, namely foreign policy. Citizens are free to raise a referendum to dissociate from Liechtenstein at any time they please, and yet they have expressly chosen not to and in return enjoy one of the very highest GDP’s in the world, low taxation, and other markers of a highly successful society.
In this model, one can begin to see how monarchies at their best can represent a lower time preference approach to governance. On the one hand, the monarchy is hereditary and passed down through the family. That is, there is a sense of ownership, rather than short term control or mere caretaking. On the other hand, the monarchy only retains any power at all among its citizens because it satisfies the needs of those very citizens. Given this, there is incentive to make prudent decisions that take the long term into account. To increase the value of their property, the monarchs must make decisions that in long run continue to improve the conditions of its citizens. Hence, Liechtenstein has developed an incredibly successful economy for such a small nation. It has low taxation, strong property rights, and its state focuses only on managing that which it is uniquely suitable to manage. In the contrary, most democracies we see around the world are continually increasing taxes, reducing property rights, and getting its hands into any and all business.
With all of this in mind, I hope it becomes clear how, while perhaps non-intuitive, a well-tuned monarchy can actually be wonderfully suited to develop strong property rights, individual liberty, and an interest in long term economic planning, just like bitcoin.
For its own sake, a modern monarchy would have an interest in bitcoin because they themselves need to maintain a treasury for savings, and they have the same reason to hodl as anyone else. With bitcoin, instead of being focused on the next four years, or even ten, a monarch can focus on making good financial decisions with a generational perspective that allows the treasury to be passed down to the successor without worry, and with more value than when they started.
For the people’s sake, a monarchy with bitcoin can focus on real economic growth by providing real services that benefit themselves and the people it is serving, instead of engaging in monetary policy for short term gain at the long-term expense of the people. With better property rights comes better protection of their own financial sovereignty. For that reason, Liechtenstein has a world-class banking industry. In this environment, people can also think generationally with their own wealth.
For both of their sakes, a bitcoin monarchy can be more independent, which allows for freer trade on fairer terms, rather than being beholden to other nations’ fiat games.
While it’s not yet a popular position, I think a modern monarchy and bitcoin can work hand in hand to create a peaceful and prosperous 21st century and beyond, with strong private property rights, individual liberty, and economic growth.
– In the tweet “I love Serbia because we never support a current thing. #Freedom #Bitcoin” you got a lot of negative comments from people who still think Bitcoin is a scam and a “tool of foreign services”. What is the reason behind such attitudes in seeing Bitcoin?
Serbia has little trust of foreign powers Serbians have gone through many hard times. They have experienced war, genocide, communism, and the third highest level of hyperinflation in the world, all in the last 80 years. Understandably, they also lack trust for their own state. So naturally, many Serbs will first look at bitcoin sceptically. Some of them will of course say it’s the tool of some foreign power. This attitude will change. Education is key. If we don’t learn about our history, or forget it, then we will be destined to repeat it.
The more they understand the fiat system, the more they can understand one of fiat money’s main purposes is to create “exorbitant privilege” and is wielded as a tool for foreign powers.
The more they understand bitcoin, the more they will learn that bitcoin was designed specifically to counter the conditions that create this exorbitant privilege. Serbians do not have to trust a foreign government, or even their own government.
– Why Bitcoin but not “Crypto” ?
Bitcoin is the first and only decentralised money discovered. All other so called “cryptos” are not truly decentralised. They have small teams running them, with a CEO and maybe some slick marketing team. Their tokens have a huge pre-mine (70% in the case of Ethereum). Some use proof-of-work yet they have negligible energy securing their already inferior token. Or maybe they use proof-of-stake, which is a joke. Proof-of-stake is just an updated version of fiat, because while proof-of-work creates decentralized consensus and censorship resistance, proof-of-stake has highly centralising incentives, which will lead to trust-based consensus and transaction censorship.
Bitcoin had an immaculate conception. Bitcoin is truly decentralised. It has no CEO or official team working on it, and no slick marketing team. Anyone can work for bitcoin and bitcoin works to the benefit of everyone. Bitcoin’s proof-of-work is so decentralised and secured by so much energy that it’s so far proven impossible to hack or destroy.
Bitcoin is incredible engineering. Many people have sought to improve many of bitcoin’s feature. However, each improvement comes at the expense of another feature. Bitcoin sits in the perfect engineering sweet spot.
There will only ever be one bitcoin. And all money will tend toward one: bitcoin.
– How do you comment on the recent shutdown of the Terra(Luna) blockchain and the whole UST token affair?
I’m not aware of the exact details that brought it down, but I’m not surprised. It wasn’t the first, and it won’t be the last. Most, if not all, altcoins, will tend towards zero. Hopefully these events will help people understand the value of holding their own private keys and running their own bitcoin nodes.
– Bitcoin is gold 2.0, but its blockchain is not intended for writing smart contracts and decentralized applications. If the question of transferring some of the public digital infrastructures of the Republic of Serbia to one of the world’s blockchain platforms would ever arise, which blockchain would be the best in your opinion, and does it even exist at the moment?
Bitcoin is bitcoin. Bitcoin is the only blockchain that matters. Innovation will happen with bitcoin as its foundation. And given Serbia’s horrible monetary history, Serbians are desperately in need of putting on our laser eyes and focusing on fixing the money, rather than wasting public resources on altcoins and scams.
– Serbia, more precisely Yugoslavia, is the country that suffered the third biggest hyperinflation in history, but people still don’t see the value in Bitcoin. How would you bring Bitcoin and its useful role in today’s world to the citizens of Serbia?
As we talked about before, Serbians are sceptical for obvious reasons. A sceptic is a critic. One thing that is lacking in this world, especially in this day and age, is critical thinkers. Understanding bitcoin and what it does and solves is critical thinking. So, Serbians are natural bitcoiners without knowing it. Once we understand bitcoin then there is no turning back. We can finally advance our civilisation.
And how will educate? Firstly, my wife and I are setting up a foundation. This royal foundation will support local sustainable businesses, focusing on health, environmental and ecological initiatives, as well as cultural heritage. When working on these initiatives, we will always have bitcoin in mind, such as incorporating it into treasuries and individual pension funds.
Meanwhile I will work with local bitcoiners on other projects, such as starting a Serbian bitcoin educational website. And we will teach our people about why hyperinflation happened, why our current practices are doing nothing to fix the underlying problems. And show our people how bitcoin is uniquely capable of fixing these problems because of its absolute scarcity and the ability to hold your own keys and run your own node.
– What is the first thing that needs to be done in order for Bitcoin to receive the status of legal tender in Serbia?
People need to learn more about why they should accumulate bitcoin and how its unique properties benefit them as individuals. They do not need to wait for legal tender status.
– What would you say to people from our area who may not yet understand Bitcoin and its true utility value?
I would recommend studying the history of money; from using stones, to seashells, to gold and other precious metals, to paper backed by gold, and finally paper not backed by gold or anything (i.e. fiat money, the money we have today). Then I will ask them to look at society with an open mind, not just in Serbia but around the world. And I follow up with: are you happy with what you see? I believe bitcoiners understand where this conversation is going. As they say: fix the money, fix the world.
I would also recommend buying and holding bitcoin. Learn about how it works by getting your hands dirty. There’s no better way to learn than through experience.
– When will Serbia accept the Bitcoin standard?
When the majority of Serbs understand bitcoin. It is up to us to make this happen. The bitcoin standard is adopted one by one. Serbians do not need to wait on their government. They can begin saving for the future, benefiting from bitcoin’s long-term growth, and establish financial sovereignty today, without anyone’s permission. When enough people have adopted bitcoin for themselves, the government will have no choice but to follow suit.