EP 011 A Few Methods Of Monetizing your Citadel
Unless you can buy it in cash, your citadel should be an asset, not a liability.
Create an Asset, not a Liability
In my mind, there are two primary options when one is building a Bitcoin Citadel. First is to purchase and use your Citadel as a Primary Residence, and second is to purchase and build your Citadel as an Alternative Space.
Neither option is preferable over the other, and both have their strengths and drawbacks, but it is worth considering where you will fall as you build your own Citadel. Consider what you personally want out of a Bitcoin Citadel.
Is it to escape the city?
Is it to relocate full time?
Is it to make money?
Is it to build community?
For my own purposes, building a Bitcoin Citadel as an Alternative Space is optimal for me. I’m not able to relocate full time to WY, however, it is important to me to have an operating and optional space as a resource in the meantime.
Regardless of your personal rationale for building a Bitcoin Citadel, I strongly urge you to seek strategies that generate cashflow. At minimum, you will be paying taxes and insurance on your property. It is worthwhile to have these covered by the land itself. At maximum you may be executing a fiat speculative attack via subsidized lending and have a debt payment (or multiple debt payments) to cover.
Below follow a few options for cashflowing a Bitcoin Citadel. They are graded based on DIFFICULTY, PROFITABILITY, and MANAGEMENT DEMAND.
As always, let me know if there are more that I should be considering.
In my opinion, agriculture must exist on your Citadel.
Not only is it of critical importance to sustain yourself and your family, but some lending programs include special conditions for Agricultural lands (i.e. lower rates on longer terms). Additionally, in the state of WY, AG land is taxed at less than 10% of the standard state rate.
So, in my opinion, you must include agriculture on your land.
But how? Here are a few ideas:
Market Garden: A garden you build for CSA type products, sold to restaurants or directly to the market.
Chickens: Either egg layers or broilers, maintained in a pen or chicken tractor (look it up). Again, you can consume and/or sell products to market.
Ranching (Low Input): Low input ranching requires BIG acreage in WY (because of low rainfall in the state), but is worth considering if you have the space and, importantly, the water.
Sheep: An alternative to ranching beef requiring less acreage.
Alternative Product Greenhouses: Whether it is hemp, mushrooms, or microgreens, you can generate revenues and food off of a small space.
Difficulty: A to F; depending on your setup. It can be as easy or complex as you like.
Profitability: A; There are low startup cost options and a breadth of financing for AG.
Management Demand: C; You will need either a manager, farmer or yourself on the land.
Energy may not come to mind when you think of revenue generation for your Citadel, but I would like to propose an alternative method below.
Off grid properties in WY have a few options for energy generation, Solar, Wind and Micro-Hydro.
WY is an excellent candidate for Solar and Wind because of the high number of days with consistent gusts and cloudless skies. Micro Hydro is a location dependent candidate that uses live water, naturally pressurized and focused on the blades of a small turbine, to generate 100s if not 1,000s of watts of consistent power.
Regardless of how you choose to generate your power, you will need to store it in a battery bank (LiIon batteries currently are best for this).
All off-grid systems are wired to not overload their batteries.
In many cases, dumping energy is required to keep the system safe and operational, and homesteaders get creative by running electrical devices or heating their home water with the waste excess energy.
Consider a series of Antminer S9s (or whatever the cheapest miner you can get is), plugged into your system as a method of dumping excess energy.
This strategy is obviously periodic and intended more for cost recapture instead of profit generation, but should be considered as a Bitcoin centric proof of concept for these types of systems.
Importantly, profitability depends on the type of energy you have chosen for your system. Citadel builders who use micro hydro will be more profitable in this strategy. Micro Hydro output changes seasonally (as water flows change Summer to Winter), but runs continuously, unlike solar panels or wind turbines which are far more periodic.
As I build, this is one aspect of the project I’m extremely excited about, using various sources of energy to both power the Citadel and recapture costs with mining.
Difficulty: B-; You will need a professional to wire this system.
Profitability; B+; You are both producing the energy you use, and recapturing the excess.
Management Demand; A; Once setup, these systems should run robustly.
Agri-Tourism and Glamping
The agri-tourism and glamping strategies are my personal first choice for monetization (based on my own background, goals and expertise). This strategy includes building out various types of hospitality options for various types of travelers.
Additionally, I envision my Citadel to not only have individual facilities for sleeping and home life, but also community spaces for remote co-working, events, and retreats.
On a glamp site I consider Tiny Homes and RV Pads to be the primary forms of residence. Actual glamping tents like yurts, treehouse and other hipster amenities are fun, but should be considered secondary as they are less comfortable across seasons.
These types of amenities are typically built to catch the eye of intrepid Instagrammers, and not meant to be highly functional and comfortable over time (I still have to consider the Wife Index of Livability!)
I won’t go into great detail on glamping because I’ve already begun to address the vision in prior newsletters, but be aware that this core vision of remote co-working and events remain as I continue to hunt for properties.
Difficulty: C; Planning, renovations and setup are a big lift.
Profitability: A; Incredibly profitable if executed and built properly.
Management Demand: A; This will require an on site manager. If you are comfortable hiring, training and monitoring this person, you will be fine.
State and Federal Speculative Attacks
There are a few forms of ‘speculative attacks’ to be considered. They all entail one utilizing State and Federal programs to increase your leverage and/or ROI as you search for and purchase land.
While there have been recent (and very heated) discussions on Speculative Attacks, and specifically ESG in the twitter sphere, I’ll remind everyone that programs like these are nothing new and have been incentivizing speculative attacks for decades.
Take for example the FHA program for housing in the US. It allows you to purchase multi-unit properties (must be a primary resident) with as little as 3% down. You can then get renters in additional units and cashflow a property you have very little cash in yourself.
As long as you model your risk correctly and don’t over-leverage (this is your own personal risk tolerance, I myself am very risk averse in real estate), you can easily acquire and cashflow properties using this strategy.
Here are a few Speculative Attacks with some supporting information.
Wyoming Conservation Easement (Cashflowing Conservation):
This involves you buying a property and allowing it to ‘season’ for a period of, I believe, one year. At that point you can put a large portion of your acreage into Conservation Easement with the State, which ensures you will not develop the land (you hopefully weren’t going to anyways), and the state will give you a one time payment per acre of between $60 and $600 depending on the grading of the land.
There are use exceptions around housing and farm or ranching amenities, so I highly suggesting looking into this if you are building in WY (You can start HERE).
Farm Services Lending (The Lending Attack):
I highly recommend using a Farm Services Loan to build your Bitcoin Citadel. Much like the FHA program I described above, this program is an even better way to access cheap capital, which, when managed correctly via cashflow, allows you a much lower risk way to acquire and maintain your own property. How good are the terms for FSA Loans? For starters, you can get up to $600,000 (depending on your credit of course) with 0% down at current rates of ~3.25% over 40 years.
Yes, you read that right, 0% down for a 40 year loan. Below are the current rates for the month of August. You can find more information HERE.
Selling Carbon Credits (The ESG Speculative Attack)
I won’t got into the debate over carbon credits here, but I will detail one method that large landowners (i.e. over 1,000 acres) in particular can utilize the ESG system for their own purposes.
Landowners and ranchers may sell ‘Carbon Credits’ to the market.
They pay an initial auditing fee to determine how many credits they are entitled to sell to market (depending on quality and use of the land itself), and then are able to sell those carbon credits to corporations that have been mandated to be ‘carbon neutral,’ or some other form of accounting trickery they have to play by.
A seven year old hopped up on gas station slushies could tell you that creating imaginary carbon credits and then selling them to businesses on the premise that those businesses are somehow supporting the earth is not only silly, but an opportunity for massive fraud and regulatory capture and is inevitably an attempt at a corporate wealth transfer which will be gamed until it inevitably fails.
That being said, this strategy works on the seller side, only if you have a large operation going (100s of head of cattle or 1,000s ac of land) because you need to recapture the initial auditing fee, which can number in the tens of thousands of dollars.
Difficulty: A to C; FSA lending and WY Conservation easements are A’s, Carbon Credits are a C for cost and setup fees.
Profitability: A; All of these options make sense at some scale and should be explored.
Management Demand: A to B; Easements and FSA lending are simple enough. Credits take slightly more management, but more than anything need to baked into your model.
I’m glad you’ve made it this far.
If you’re anything like me, you’re seeing stars as you navigate all of these options. The biggest piece I want to emphasize is that you don’t need to do everything, you only need to do what works for you on your plot of land.
There is no right or wrong way to explore self sovereignty and the building of the Bitcoin Citadel, and you shouldn’t feel pressured to do things one way or another.
Have fun, enjoy the process, explore your options, and build something that reflects your own personal vision of the Bitcoin Citadel.
I hope you enjoyed this update!
I’m loving the process of getting my thoughts and planning down, and hope you’re excited to build your own Citadel (or are actively in the process of learning and building.)
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