The Network State

A network state is a social network with a clear leader, an integrated cryptocurrency, a definite purpose, a sense of national consciousness, and a plan to crowdfund territory.


balajis

Nov 11, 2021 • 13 min read

An Archipelago of Interconnected Enclaves
A Country You Can Start From Your Computer
A Territory One Can Acquire But Not Conquer
A Group Organized by Geodesic Rather than Geographic Distance

An Archipelago of Interconnected Enclaves

A proposition is not a nation, though it can become one.

Here we describe a peaceful, reproducible process for turning an online community premised on a proposition into a physical state with a virtual capital: a network state, the sequel to the nation state.

A network state is a social network with a clear leader, an integrated cryptocurrency, a definite purpose, a sense of national consciousness, and a plan to crowdfund territory. That clear leader is the founding influencer, who organizes the online community that eventually buys land in the physical world. Crucially, that land is not necessarily contiguous.

Map of Southeast Asia

To visualize what this looks like, look at Southeast Asia on a map. Several of these countries are clusters of islands separated by the ocean.

These aren't convex sets; for example, there are pieces of Indonesia that are closer to Malaysia than to other pieces of Indonesia. Still, on top of these geographical facts we superimpose the abstraction of a nation state. Two people within the geographic boundaries of a state delimited on a map are citizens of the same country, subject to the same law, with logins on the same government services - even if one of these people may be physically closer to a citizen of another country than to their co-national.

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What if we extend this concept? What if those islands were separated not by the ocean, but by the internet — and scattered all around the world? That's a visual of a network state. Contemporary precedents include coworking communities and the offices of Google: globally distributed, networked real estate gated by the common login of a corporate account.

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A network state is thus an archipelago of digitally-linked, interconnected enclaves.  It's also a country you can start from your computer, a territory one can acquire but not conquer, a community aligned around cryptographic consensus, a DAO that materializes in patches of earth, a city-state in the cloud, a body based on math rather than science, a group organized by geodesic over geographic distance, a polity that prizes exit above voice, a state that recruits like a startup, and a nation built from the internet rather than disrupted by it.

Each of these implicit definitions illuminates a different aspect of the network state. Let's go through each of them in turn.

A Country You Can Start From Your Computer

An important feature of the modern era is that you can boot up a billion dollar company from a laptop, a million person online community, a new digital currency, or even a new city! Anyone can choose to become a founder at any time, and take on the immense stress and risk of trying to build something from scratch. Or they can choose to remain a "citizen" and be gainfully employed by a founder, or by a vehicle that a founder once set up.

What if we could generalize that beyond companies, communities, and currencies?

Suppose we separate the world into founders of network states, and citizens. Anyone can switch between these paths at any time, just like you can go from being a Google employee to taking on the insanity of founding a company, or transition from founding a company to selling to Google, hanging up the cleats for a time, and enjoying the easy life as an employee.

In other words, between any two moments in time, all four of the following transitions are possible:

1. Citizen to Founder. You begin gathering an online community, write up a founding document, create a cryptocurrency, and declare your intent to start a network state. From today's perspective this seems quixotic. But think about Satoshi Nakamoto's plan to start a new currency in 2009, and how utopian it seemed at the time. If the process of instantiating the first network state meets with success, if this zero-to-one works, it will eventually become a template: a country anyone can start from your computer, beginning by building a following.

2. Founder to Citizen. You may not want to remain a founder forever. Heavy lies the crown! As we will see, unlike modern nation states, but like historical ones, network states are built for full or partial M&A. So you can sell a network state to another network state, which transitions the logins of all your citizens to a new system. Or you can shut it down, ideally with some notice such that your citizens/users have time to find a new network state they can gain citizenship in.

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3. Citizen to Citizen. You join a network state, and remain a citizen. Or you acquire dual citizenship, or N-th citizenship, in another network state - usually by buying and holding a sufficient amount of that network state's coin, as well as satisfying other requirements like participation and civility. Different network states may have different reciprocity provisions, just like nation states and social networks do. For example, a US passport allows you to enter some countries, but not others. And Quora allows you to login with Facebook or Google, but not vice versa.

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4. Founder to Founder. You continue running the network state you founded, or you sell it or shut it down and start a new one. Perhaps the first such state is focused on veganism, while the second on life extension. Just like Evan Williams did Blogger, then Twitter, then Medium - all iterations on a theme, each informed by the previous one - it may be possible for a suitably talented administrator to do the Plymouth Colony, then Massachusetts, then the US all within one lifetime. The v1, v2, and v3 of countries rather than companies. The history mid-1800s American communes is highly relevant.

The idea that anyone can become a founder of a network state is a vision of global equality of opportunity. It is the modern version of Jefferson's natural aristocracy. And it's an improvement over the legitimating myth that "anyone can become president of the United States", which isn't really true, as only ~4% of the world is American and only a subset of those people satisfy the age, birth, and residency requirements to become president.

So long as the US still rules the world, this means that most of the people the US rules cannot themselves rise to rule the US. In fact, once we realize that there have been only 46 US presidents (all of whom are American), but that there are thousands of billionaires (most of whom are now not American), we realize that it is much more realistic to become a tech billionare than to become president.

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Similarly, now that Satoshi made it possible to start a new digital currency, it is much easier to found a new cryptocurrency than to become head of the Federal Reserve. The American establishment would never have picked Vitalik Buterin over Jerome Powell, but the young Canadian is on key dimensions a far more accomplished macroeconomist than the American sexagenarian; Buterin founded an economy, while Powell simply inherited it.

So, instead of the false hope of getting elected US president, a role available only to 40-something people in history, or the even more difficult path of becoming Fed Chair, an opportunity for only 16 appointees, one can much more realistically found a billion dollar company or coin from one's computer.

By extending this concept, we allow anyone in the world with an internet connection (which will soon be everyone) to become not just a tech founder, or a protocol founder, but a network state founder.  Whether the next Washington is Brazilian, Indian, Nigerian, or Eastern European, this mechanism lets them rise to global leadership. It permits a positive-sum avenue for the politically ambitious. But it also allows anyone who doesn't desire the stress of leadership, or just doesn't desire it at this point in time, to simply remain a citizen and pick from the available nation and network state jurisdictions.

A Territory One Can Acquire but Not Conquer

Once we visualize a network state as a combination of (a) a digital social network with an integrated cryptocurrency and (b) a physical network of distributed enclaves, we realize that it is much easier to acquire than to conquer.

Easy to Acquire

First, why is it easy to acquire? For the digital portion of a network state, when the founder sells it to an acquirer, it's like selling Instagram to Facebook. The digital logins of the two services are integrated and citizens in each network state now have access to the other's apps and physical territory. This is a modern analog to the Louisiana Purchase or the purchase of Alaska. It's also feasible to sell not the entire network, but simply a subnetwork - perhaps all those in a defined geographical location, or all those who have expressed a collective interest in changing citizenship. This is similar to Singapore becoming independent from Malaysia. Finally, it is also feasible to spin-off a subnetwork into its own network, like the UK exiting from the EU.

lousiana-purchase.jpeg

If we visualize the physical portion of a network state as like a network of Google offices, or a string of restaurant chains, or the real estate footprint of a REIT, we see how we can handle the physical component of network state M&A as well. In the simplest version, after one network state consummates the acquisition of the other, all citizens from one network state can enter the territory of the other. The smart locks just get a software update and now open all the doors and gates. The branding changes too, to be consistent with the new unified entity, much like a large chain putting up new signage when it acquires a small one. Various kinds of reciprocity relationships with other network states may need to be renegotiated, just like many corporate deals have change-of-control provisions, but this too is straightforward so long as it is anticipated.

restaurant-chains-map.jpeg

In theory, all of this can be done with current legal infrastructure. It's just like one multinational acquiring the digital, physical, and human resources of another, except it extends to people's residences rather than simply their offices, and except that the acquired people become not just employees of the combined entity but citizens - though they can always leave for any new network state that admits them.

Over time, however, the digital infrastructure for each network state should live on a blockchain, which allows the recording of all real estate transactions, the maintenance of all citizen records, and the management of private keys in a globally consistent way across legacy nation state jurisdictions. The problem of post-acquisition integration mostly then reduces to porting over the records from one blockchain to another.

This is then a way to extend the corporate concept of change-of-control to polities. It's a recipe for nonviolent competition between countries, where peace treaties between would-be rebels and current incumbents are signed via M&A.

Hard to Conquer

The network state reduces violence on another dimension: thanks to their geographical decentralization and physical invisiblity, network states are hard to conquer.

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First, geographical decentralization. If you look at a map of France that includes its islands in the South Pacific, you realize that it's difficult to invade or nuke the whole thing at once. So the geographical distribution of the network itself is a deterrent to physical force. Just like cryptocurrency, the decentralization deters violence.

Second, physical invisibility. This is much more subtle. Right now, you can see the physical border zone between France & Germany on a map. But you can't visualize the border zone between Twitter & Facebook. That is, which people are on the "border" of Twitter and Facebook, in the sense that they have accounts on both sites?

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This might seem like a trivial concept, but isn't. The Twitter and Facebook networks are each bigger than France or Germany - combined. However, social network membership is invisible to all but the network operators. There's no public list of all Facebook and Twitter members. Only Facebook can generate a map like this.

This has immense implications. You couldn't have nationalism itself without maps of physical space. For example, think about 54° 40' or Fight, which made literal reference to latitude. You couldn't have that kind of border dispute without being able to visualize a border. People had to see the map to be able to fight over it.

So, because citizenship in a network state is invisible to a satellite, at least without the consent of the network state operator, these imagined communities are invisible countries. It's the return of secret societies, at scale, as secret states. Network states thus have the option of reducing violence by encrypting the map itself; you can't hit what you can't see.

A Group Organized By Geodesic Rather than Geographic Distance

Snapchat lies on a straight line with the dissolution of the nation state. Why? Because people are sharing intimate moments with others 3000 miles away, while they often don't know the names of the next door neighbors in their anonymous apartment complex. This undermines the underlying assumption of the Westphalian nation state: namely, that people who live near each other will share the same values and therefore agree upon laws, such that the geographically-premised mechanism of the nation state is the right entity to govern them. Instead, what we find is that people share values with people who are close to them in their social network...not in their physical space.

We can quantify this with a little math. First, take a look at the definitions for the great circle distance and the geodesic distance.

The geographic distance is the the distance between two points on the surface of the earth. It's the distance as the crow flies. You can do a modified version of this based on practical travel constraints, but to a first approximation this fis how far apart people are in the physical world. The geodesic distance, by contrast, is a completely different metric. It's the number of degrees of separation between two nodes in a social network along the shortest path.

distance-metric.png

Importantly, the geodesic distance is just as valid a mathematical metric as the great-circle distance. That means one can generate distance matrices, and hence maps, via techniques like multidimensional scaling. In fact, there are entire conferences devoted to cloud cartography, in which research groups present maps of online social networks - mapping not nation states but states of mind.

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Why is the geodesic distance important? Because the network state is enabled in nontrivial part by the fact that we are transitioning from a primarily great-circle-driven world to a geodesic-driven world. And that means the fundamental division is less the visible geographic borders of the nation state, than the invisible geodesic borders of the social network. This in turn means that we need to reconceptualize the state as a primarily digital entity, a network state.

Think about the difference between Russia vs Ethereum. Russia was a geographical entity that switched its ideology in 1991, from communism to nationalism. The geography was primary, the ideology was secondary. Conversely, Ethereum is an ideological entity whose primary existence is in a network. The Ethereum community holds meetups in places like Cancun or Shenzhen, but the physical materialization is evanescent while the digital community is persistent.

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Or think about the fact that Russia's borders are (mostly) fixed, while Ethereum's borders are highly fluid. It's true that Russia's borders have changed since 1991; its predecessor state, the USSR, extended farther out into Eastern Europe and Central Asia. But the Russian people have been near the Baltics, the Turks, the Eastern Europeans, and so on for quite a long time. Geopolitics doesn't vary that much; Russia's "competitors" for citizens have mostly stayed the same.

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By contrast, the Ethereum-to-XYZ exchange rate does vary quite a bit, for different values of XYZ. Solana is a new digital currency that has popped up on Ethereum's boundary and taken a good chunk of "citizens" from it, just as Ethereum itself rose in BTC terms since its inception.

This is similar to how early Facebook arose out of nowhere and took many citizens from Gmail, before Google "closed the borders". Of course, unlike territorial disputes, these games are not strictly zero-sum, as the space of cryptocurrency and internet users keeps expanding, as does the wealth to invest in different services.

It is the geodesic distance that enables this fluidity. Individuals and entire networks can instantly become adjacent to anyone else in a social network. Individuals can also move around the map to become adjacent to others in the physical world. But unlike individuals or networks, nation states cannot do this. They cannot just move around the map at will. The Russian state is mostly stuck with its neighbors in a way that individual Russians, or the Telegram and Ethereum networks (both founded by people of Russian descent), are not.

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We can term this concept dynamic digital geography, after a term Patri Friedman introduced. He used it for seasteading, but it's easier to accomplish in the digital world. And the popularization of the metaverse makes this more than a metaphor; the digital territory a network inhabits can instantly be picked up and made adjacent to any other with the press of a key, just like moving a cruise ship around the world, but even more cheaply and quickly.

Next Steps

To be continued! See github.com/1729/content/issues for how you can help.