Balaji Srinivasan: How to Fix Government, Twitter, Science, and the FDA | Lex Fridman Podcast #331

Donald Trump was probably the biggest person ever to be removed from social media. Do you understand why that was done? Can you steel man the case for it and against it?

Everybody who is watching this around the world basically saw, let's say us establishment or Democrat aligned folks just decapitate, you know, the head of state from digitally, right? Like, just boom, gone, okay? And they're like, well, if they can do that in public to the US President who's ostensibly the most powerful man in the world, what does the Mexican president stand against that? Nothing. Regardless of whether it was justified on this guy, that means they will do it to anybody. Now the seal is broken, just like the bailouts, as exceptional as they were, and at first everybody was shocked about them, then they became a policy instrument and now there's bailouts happening. Every single bill is printing another whatever billion dollars or something like that.

The following is a conversation with Balaji Srinivasan, an angel investor, tech founder, philosopher, and author of the network how to Start a New Country. He was formerly the CTO of Coinbase and general partner at Andreessen Horowitz. This conversation is over seven hours. For some folks, that's too long. For some, too short. For some, just right. There are chapter timestamps, there are clips so you can jump around or like I prefer to do with podcasts and audiobooks I enjoy. You can sit down, relax with a loved human, animal or consumable substance, or all three if you like, and enjoy the ride from start to finish. Biology is a fascinating mind who thinks deeply about this world and how we might be able to engineer it in order to master, maximize the possibility that humanity flourishes on this fun little planet of ours. Also, you may notice that in this conversation, my eye is red. That's from Jiu Jitsu. And also, if I may say so, from a life well lived. This is the Lex Friedman podcast to support it. Please check out our sponsors in the description. And now, dear friends, here's Biology Srinivasan. At the core of your belief system is something you call the prime number maze. I'm curious. I'm curious. We've got to start there. If we can start anywhere, it's with mathematics. Let's go.

All right, great. A rat can be trained to turn at every even number or every third number in a maze to get some cheese. But evidently it can't be trained to turn at prime numbers 2, 3, 5, 7, and then 11, and so on and so forth. That's just too abstract. And frankly, if most humans were dropped into a Prime number maze, they probably wouldn't be able to figure it out either. You know, they'd have to start counting and so on. Actually pretty difficult to figure out what the turning rule was yet. The rule is actually very simple. And so the thing I think about a lot is just how many patterns in life are we? Just like these rats and we're trapped in a prime number maze. And if we had just a little bit more, you know, cogitation, if we had, you know, a little bit more cognitive ability, a little bit more. What do you. Whether it's, you know, brain machine interface or just better physics, we could just figure out the next step in that primary. We could just see it. We could just see the grid. Right. And that's what I think about. Like that. That's a big thing that drives me is figuring out how do we can actually conceive, understand that primary maze that we're living in.

So understand which patterns are just complex enough that they are beyond the limit of human cognition.

Yes.

And what do you make of that? Are the limits of human cognition a feature or a bug?

I think mostly a bug. I admire Ramanujan, I admire Feynman. I admire these great mathematicians and physicists who were just able to see things that others couldn't. And just by writing it down, that's a leap forward. People talk about. It's not the idea, it's execution. But that's for trivial ideas, for great ideas, for Maxwell's equations or Newton's laws or quantum electrodynamics or some of Ramanujan's identities. That really does bring us forward, especially when you can check them. You don't know how they work. Right. You have the phenomenological, but you don't have the theory underneath it. And then that stimulates the advancement of theory to figure out, why is this thing actually working. That's actually. Statmec arose in part from the kind of phenomenological studies that were basically being done where people are just getting steam engines and so on to work, and then they kind of abstracted out thermodynamics and so on from that. So the practice led the theory rather than vice versa. To some extent, that's happening in neural networks now, as you're aware. Right. And I think that's so just something that's true and that works, you know, if we don't know yet, that's amazing. And it pulls us forward. So I do think that the limits are more of a bug than a feature.

Is there something that humans will never be Able to figure out about our universe, about the theory, about the practice of our universe.

Yeah, people will typically quote Cridell's Incompleteness for such a question. And yeah, there are things that are provably unknowable or provably unprovable. But I think you can often get an approximate solution. Hilbert's problems like we will know, we must know, at least we should know that we can't know. Push to get at least an approximate solution. Push to know that we can't know. At least we push back that darkness enough so that we have lit up that corner of the intellectual universe.

Okay, let's actually take a bit of a tangent and explore a bit in a way that I did not expect we would. But let's talk about the nature of reality briefly. I don't know if you're familiar with the work of Don Hoffman.

No, I don't. I know Roger Penrose has like his Road to Reality series for like basic physics, getting up to everything we know. But go ahead, tell me.

It's even wilder. In modern physics we start to question of what is fundamental and what is emergent in this beautiful universe of ours. And there's a bunch of folks who think that space time as we know it, the four dimensional space, is emergent. It's not fundamental to the physics of the universe. And the same many argue, I think Sean Carroll is one of them, is that time itself, the way we experience it, is also emergent. It's not fundamental to the way our universe works anyway. Those are the technical term, I apologize for swearing, those are the mind fucks of modern physics. But if we stroll along that road further, we get somebody like Donald Hoffman who makes the evolutionary case that the reality we perceive with our eyes is not only an abstraction of objective reality, but it's actually completely detached, like we're in a video game essentially. That's consistent between each, consistent for all humans. But it doesn't, it's not at all connected to physical reality.

It's an illusion version of the simulation hypothesis. Is that his?

In a very distant way. But the simulation says that there's a sort of computational nature to reality. And then there's a kind of a programmer that creates this reality and so on. Now he says that humans have a brain that is able to perceive the environment and evolution has produced from primitive life to complex life on Earth produce the kind of brain that doesn't at all need to sense the reality directly. So like this table according to Donald Hoffman is not there. Well, so like not, not Just as an abstraction, like we don't sense the molecules that make up the table. But all of this is fake.

Interesting. So, you know, I, I tend to be more of a hard science person. Right. And so, you know, so just on that, people talk about qualia, you know, like, is your perception of green the different from. Different from my perception of green? And the, you know, my counter argument on that is, well, we know something about, you know, spectrum of light and we can build artificial eyes. And if we can build artificial eyes, which we can, you know, like they're not amazing, but you can actually, you can do that. You can build artificial ears and so on. Obviously we can build recording devices and you know, for cameras and things like that. Well, operationally, the whole concept of your perception of green, you see green as purple, I see green as green, or what I call green, doesn't seem to add up because it does seem like we, we can do engineering around it. Right. So the Hoffman thing, I get why people more broadly will talk about a simulation hypothesis because it's like Feynman. Many others have talked about how math is surprisingly useful to describe the world. Very simple equations give rise to these complex phenomena. Wolfram is also on this from a different angle with the cellular automata stuff. But it's almost suspicious how well it works. Yeah, but on the other hand, it's like, you know, it is. Yet we're still also in a prime number maze. You know, there's things we just don't understand. And you know, so, so the.

Within the constraints of the non prime numbers, we find math to be extremely effective. Surprisingly effective.

Yeah, exactly. So maybe, maybe the math we have gets us through the equivalent of the even turns and the odd turns. But there's math we don't yet have that is more complex or more complex.

Rules rather than, despite all our rage, just rats in a cage.

I know that gets like very abstract, but, you know, there are unsolved problems in physics, you know, like the condensed matter space. There's a lot of interesting stuff happening. My recollection, I may be, you know, out of date on this. Like things like sonal luminescence, we don't know exactly how they work. And sometimes those things that are like at the edges of physics, you know, in the late 1800s, I think Rutherford somebody, I think it was Rutherford said, you know, basically all physics is being discovered, et cetera. And that was obviously before quantum mechanics, that sort of edge case. People are looking at the Balmer and the Passion series and seeing this weird thing with the hydrogen spectrum, and it was quantized. And that led to this sort of phenomenological set of observations that led to quantum mechanics and everything. And sometimes I think the UAP stuff might be like that. People immediately go to aliens for uap, like the Unidentified Aerial phenomena. Right. And people have been. There's surprising amount of stuff out there on this. The UK has declassified a bunch of material. You know, Harry Reid, who's a senator, has talked about this. It's not an obviously. It's not an obviously political thing, which is good. It's something that. Is there something happening there? Right. And people had thought for a long time that the UAP thing was a like, American kind of counter propaganda to cover up their new spy planes that were spying over the Soviet Union to make anybody who talked about them seem, you know, crazy and, and hysterical or whatever. But if the UAP thing is real, it could be atmospheric phenomena like, you know, like the aurora borealis or the northern lights. But some things we don't understand. It could be something like the. The Bomber and Passion series, you know, which were the observations of, like, emission spectra before quantum mechanics. So that's like another option as opposed to doesn't exist, or little green men. Could be physics we don't understand yet. That's one possibility.

Do you think there's alien civilizations out there?

So there's a lot of folks who have kind of written and talked about. There's just, you know, the Drake equation, which is like, you know, the multiplying all the probabilities together, there's perhaps more sophisticated takes like the. The dark forest, you know, which says that if the universe is like a dark forest, where the dumb ones that aren't hiding our presence. There's one calculation I saw, and I haven't reproduced it myself, but basically says that the, the assumption that other civilizations have seen ours is wrong. Because when you have, like, a spherical radius for, like, the, you know, electromagnetic radiation that's leaving our planet, as that sphere gets larger and larger, it gets like smaller and smaller amounts of energy. So, you know, you get farther out, you're not getting enough, you know, you know, photons or what have you to actually detect it. You know, I don't know. I actually haven't looked into the math behind it, but I remember seeing that argument. So actually, it is possible that it's so diffuse when you go past a certain, you know, number of light years out that people, you know, that an alien civilization wouldn't be able to detect it. Right, That's.

That's another argument that's more basically about signals from them. From us.

Yeah.

To be able to. Signals colliding enough to find the signal from the noise.

Right, Exactly.

Intelligent signal.

Yeah.

Hanson noise.

Hanson has an article called Grabby Aliens. Have you seen his thing? Right.

And so there's been on this podcast.

Oh great.

He's brilliant.

I like him. He, he pushes, you know, boundaries in interesting ways.

In every ways. In all of the ways.

In all the ways. That's right. I, I like him overall. He's, he's, you know, he, he's an asset to you, Andy.

Grabby aliens. So he has, he has this interesting idea that the civilizations quickly learn how to travel close to the speed of light.

Right.

So we're not going to see them until they're here.

Yeah, that's possible. I mean one of the things is. So here's for example a mystery that we haven't yet done. Right. Which or we haven't really figured out yet, which is abiogenesis. In the lab, right. We've done lots of things where you've got, you can show macromolecules binding to each other, you can show evidence for the so called RNA world. Abiogenesis is to go from like non life to life. Right. In the lab you can show microevolution obviously with bacteria, you can do artificial selection on them. Lots of other aspects of fundamental biochemistry, origins of life stuff have been established. There's a lot of plausibility arguments about the primitive environment and nitrogens and carbons snapping together to get the RNA world is the initial hypothesis. But to my knowledge at least we haven't actually seen abiogenesis demonstrated. Now one argument is you need just like this massive world with, you know, so many different reps before that actually happens. And one possibility is if we could do atomic level, you know, simulations of molecules bouncing into. It's possible that in some simulation we could find a path, a reproducible path to abiogenesis and then just, you know, replicate that in the lab. Right. I don't know. Okay. But that seems to me to be like a mystery that we still don't fully understand. Like an example example of the prime number maze. Right.

One of the most fascinating mysteries, one.

Of the most important. Yep, yeah, yeah. And, and again there may be some biochemist who's like, oh balge, you, you didn't know about X, Y and Z that happened in the abiogensis field. I, I freely confess I'm not like at, you know, okrant on it. The last thing I remember Looking at.

It is what's okorant mean?

Like up to the moment.

Oh, nice, that's a nice word. That's a courant.

Yeah, I'm probably mispronouncing it, but yeah.

We'Ll edit it in post to pronounce it correctly with AI, we'll copy your voice and it will pronounce it perfectly correctly in post.

One thing that I do think was interesting is Craig Venter a while back tried to make a minimum viable cell where he just tried to delete all of the genes that were not considered essential. And so it's like a new life form. And this was like almost 20 years ago and so on. And that thing was viable in the lab. Right. And so it's possible that you could, you kind of reverse engineer. So you're coming at the problem from different directions. Like RNA molecules can do quite a lot. You've got some reasonable assumptions as to how that could come together. You've got sort of stripped down minimum viable life forms. And so it's not. There isn't stuff here. You can see micro evolution, you can see at the sequence level, if you do molecular phylogenics, you can actually track back the bases. So it's not like there's no evidence here. There's a lot of tools to work with. But this, in my view is a fascinating area and actually also relevant to AI, because another form of abiogenesis would be if we are able to give rise to a different branch of life form, the silicon based as opposed to carbon based. You know, to stretch your point, you give rise to something that actually does meet the definition of life. For some definition of life.

What do you think that definition is for an artificial life form? Because you mentioned consciousness. Yeah. When will it give us pause that we created something that feels by some definition, or by some spiritual, poetic, romantic, philosophical, mathematical definition that it is alive and we wouldn't want to kill it.

So a couple of remarks on that. One is Francis Crick of Watson and Crick before he died, I think his last paper was published on something called the claustrum. And the thing is that, you know, sometimes in biology or in any, you know, domain, people are sort of discouraged from going after the big, the big questions. Right. But he proposed the claustrum is actually the organ that is the seat of consciousness. It's like this sheath that like covers the brain. And for mice, if you. And again, I may be recollecting this wrong. So but you can look. But at my recollection is in mice, if you Disrupt this. The mouse is like very disoriented, right? It's like, it's the kind of thing which, you know, Watson and Crick were all about. Structure implies function, right? They found the structure of DNA, this amazing thing. And you know, they remarked in this very under understated way at the end of the paper that, well, obviously this gives a basis for how the genetic material might be replicated and error corrected because, you know, helix unwinds and you copy paste it. Right? So he was a big structure, function person. And that applies not just at the protein level, not just at the level of DNA, but potentially also at the level of organs. Like the claustrum is kind of this system integrating level, right? It's like the, the last layer in the neural network or something, you know, and, and so that's, that's the kind of thing that I think is worth studying. So consciousness is another kind of big abiogenesis. A big question. The prime number is consciousness is a big question. And you know, then definition of life, right? There's folks, gosh, there's, I think so this one is something I'd have to google around, but there was a guy I think at Santa Fe Institute or something who had some definition of life and some thermodynamic definition. But you're right that it's going to be a multi feature definition. We might have a Turing Test like definition, frankly, which is just if enough humans agree it's alive, it's alive. Right. And that might frankly be the operational definition because viruses are like this boundary case. Are they alive or not? Most people don't think they're alive, but they're more alive than a rock in a sense.

Well, I think in a world that we'll talk about today quite a bit, which is the digital world, I think the most fascinating philosophically and technically definition of life is life in the digital world. So chatbots, essentially creatures, whether they're replicas of humans or totally independent creations, perhaps in an automatic way. I think there's going to be chatbots that we would ethically be troubled by if we wanted to kill them. They would have the capacity to suffer. They would be very unhappy with you trying to turn them off. And then there would be large groups of activists that will protest and they'll go to the Supreme Court of whatever the Supreme Court looks like in 10, 20, 30, 40 years, and they will demand that these chatbots would have the same rights as us humans. Do you think that's possible?

I saw that Google engineer who's basically saying, this had already happened and I was surprised by it because when I looked at the chat logs of it, it didn't seem particularly interesting. On the other hand, I can definitely see, I mean, GPT3 for people who, you know, haven't paid attention shows that serious step ups are possible. And obviously, you know, you've talked about AI in your podcast a ton. Is it possible that GPT 9 or something is kind of like that? Or GPT 15 or GPT 4? Maybe.

But yeah, for people just listening, there's a deep skepticism in your face.

Yeah. You know, the reason being because, you know, it's possible, it's possible that you have like a partition of society on literally this basis. You know, that's one model where there's some people just like there's vegetarians and non vegetarians. Right. There may be machines have life and machines are machines, you know, like. Or something like that. Right. You know, you could definitely imagine some kind of partition like that in the future where your fundamental political social system, that's a foundational assumption. And is AI, does it deserve the same rights as a human? Or for example, a corporation is an intermediate. Do you see that thing? Which is how human are different corporations. Have you seen that infographic? It's actually funny.

Spectrum.

There's a spectrum. So for example, Disney is considered about as human as like a dog, but like Exxon. I may be remembering this wrong, but they had like a level with like human at one end and like rock at the other.

Does it have to do with corporate structure? What, what?

I think it's about people's empathy for that corporation, their brand identity. But it's interesting to see that first of all, people sort of do think of corporations as being more or less like the branding is really what they're responding.

Well, that's what I mean. They're also responding. You know, I have a brand of human that I'm trying to sell and it seems to be effective for the most part.

Sure.

Although it has become like a running joke that I might be a robot. Right. Which means there's. The brand is cracking, it's seeping through. But I mean, in that sense, I just, I think I don't see a reason why chatbots can't manufacture the brand of being human, of being sentient.

I mean, that is the Turing Test. But it's like the multiplayer Turing Test. Now that actually a fair number of chatbots have passed the Turing Test, I'd say there's at least two steps up. Right. One is a multiplayer Turing Test where You have chatbots talking to each other and then you ask, can you determine the difference between n chatbots talking to each other and clicking buttons and stuff in apps and, and n humans doing that? And I think we're very far off, or I shouldn't say very far off. At least I don't know how far off we are in terms of time, but we're still far off in terms of a group of n chatbots looking like their digital output is like the group of N humans, like go from the Turing Test to the multiplayer Turing Test. That's one definition. Another definition is, you know, to be able to kind of swap in and you're not just convincing one human that this is a human for a small session, you're convincing all humans that this is a human for end sessions. Remote work actually makes this possible. Right. That's another definition of a multiplayer Turing Test where basically you have a chatbot that's fully automated, that is earning money for you as an intelligent agent on a computer that's able to go and get remote work jobs and so on. I would consider that next level.

Right.

If you could have something that was like that, that was competent enough to. I mean, because everything on the computer can be automated, right? Literally you could be totally hands free, just like autonomous driving. You could have autonomous earning as a challenge problem. If you were Microsoft or Apple and you had legitimate access to the operating system, just like Apple says, can you send me details of this event? A decentralized thing could in theory, log, you know, the actions of 10,000 or 100,000 or a million people. And with cryptocurrency, you could even monitor a wallet that was on that computer and you could see, you know, what long run series of actions were increasing or decreasing this digital balance. You see, I'm saying, right? So you start to get, at least conceptually it'd be invasive and, you know, there'd be a privacy issue and so on. Conceptually, you could imagine an agent that could learn what actions humans were doing that resulted in the increase of their local cryptocurrency balance. Okay, There may be better ways to formulate it, but that I would consider a challenge problem is to go from the Turing Test to a genuine intelligent agent that can actually go and make money for you. If you can do that, that's a big deal. People obviously have trading bots and stuff, but that would be, you know, the next level. It's typing out emails, it's creating documents.

It'S actually mimic human behavior in its entirety.

Yeah, that's right. And it can, it'll schedule zooms, it'll send emails, it'll essentially because if you think about it, a human is hitting the keys and clicking the mouse. But just like a self driving car, the wheel rotates by itself. Right. Those keys are effectively just, it's like, like the Automator app in, in Apple. Right. Everything's just moving on the screen. You're seeing it there and it's just an AI.

It's kind of hilarious that the I'm not a robot click thing actually works because I actually don't know how that's happening, how it works, but I think it has to do with the movement of the mouse, the timing and they know that it's very difficult currently for a bot to mimic human behavior in the way they would click that little checkbox.

Yeah, exactly. I think it's something, I mean again my recollection on that is it's like a pile of highly obfuscated JavaScript with all kinds. It looks like a very simple box but it's doing a lot of stuff and it's collecting all kinds of instrumentation and. Yeah, exactly. Like a robot is just a little too deterministic or if it's got noise, it's like Gaussian noise. And the way humans do it is just not something that you'd usually be able to do without collecting thousands and thousands and thousands of human traces doing it. But it is a predator prey on that.

Well, and then the computer or millions.

Of human traces, I don't know, the.

Computer just sees the JavaScript. It needs to be able to look outside the simulation for the computer. The world is like it doesn't, the computer doesn't know about the physical world so it has to look outside of its world and, and introspect back on this simple box.

Right.

Is which is kind of, you know, I think that's exactly what mushrooms do or like psychedelics is you get to go outside and look back in and that's what a computer needs to do.

I, I, you know, I do wonder whether they actually give people insight or whether they give people the illusion of insight.

Is there a difference?

Yeah, because, well, actual insight, you know, actual insight is again Maxwell's equations. You're be able to shift the world with that. There's a lot of practical devices that work. The illusion of insight is I'm Jesus Christ and nothing happens. Right. So I don't know, I think those are quite different.

I don't know. I think you can fake it till you make it on that one, which is insight, in some sense is revealing a truth that was there all along.

Yeah. So, I mean, I guess, like I'm talking about technical insight, where you have. This is the thing we were talking about actually before the podcast, like technical truths versus political truths. Some truths, they're on a spectrum. And there's some truths that are actually entirely political in the sense that if you can change the software in enough people's heads, you change the value of the truth. For example, the location of a border is effectively consensus between large enough groups of people. Who is the CEO, that's, you know, consensus among a certain group of people. What is the value of a currency or any stock. Right. That market price is just the psychology of a bunch of people. Like literally, if you can change enough people's minds, you can change the value of the border or the position of the hierarchy or the value of the currency. Those are purely political truths. Then all the way on the other end are technical truths that exist independent of whatever any one human or all humans think, like the gravitational constant, right. Or, or the diameter of a virus. Those, those are just. Those exist independent of the human mind. Changing of human minds doesn't matter. Those, those remain constant. And then you have things that are, interestingly in the middle, where cryptocurrency has tried to pull more and more things from the domain of political truths into technical truths, where they say, okay, the one social convention we have is that if you hold this amount of Bitcoin, or that if you hold this private key, you hold this Bitcoin, and then we make that very hard to change because you have to change a lot of technical truths so you can push things to this interesting intermediate zone.

The question is, how much of our world can we push into that?

Right.

And that takes us in a nonlinear, fascinating journey to the question I wanted to ask you in the beginning, which is this political world that you mentioned? In the world of political truth as we know it in the 20th century, in the early 21st century, what do you think works well, and what is broken about government?

The fundamental thing is that we can't easily and peacefully start new opt in governments.

Like startup governments.

Yeah. And what do I mean by that is basically, you can start a new company, you can start a new community, you can start a new currency. Even these days you don't have to beat the former CEO in a duel to start a new company. You don't have to become head of the World bank to start a new currency. Okay, because of this. Yes. If you want to you can join, I don't know, Microsoft, or name some company that's GameStop and you can try to reform it, okay? Or you can start your own. And the fact that both options exist mean that you can actually just start from scratch. And that's just, I mean, the same reason we have a clean piece of paper, right? I mentioned this actually in the network state book. I'll just quote this bit, but we want to be able to start a new state peacefully. For the same reason we want a bare plot of Earth, a blank sheet of paper, an empty text buffer, a fresh start or a clean slate. Because we want to build something new with that historical constraint, right? For the same reason you hit plus and do docs dot new, you know, like create a new doc. It's for the same reason, right? Because you don't have backspace. You don't have just like 128 bytes of space, 128 kilobytes, and just have to backspace the old document for creating the new one. So that's a fundamental thing that's wrong with today's governments. And it's a meta point, right? Because it's not any one specific reform. It's a meta reform of being able to start new countries.

Okay, so that's one problem. But you know, you could push back and say that's, that's a feature because, you know, a lot of people argue that tradition is power through generation. If you try a thing long enough, which is the way I see marriage, there's value to the struggle and the journey you take through the struggle, and you grow and you develop ideas together, you grow intellectually, philosophically together. And that's the idea of a nations that spans generations. That you have a tradition that becomes more, that strives towards the truth and is able to arrive there. Or no, not arrive, but take steps towards there through the generations. So you may not want to keep starting new governments, you may want to stick to the old one and improve it one step at a time. So just because you're having a fight inside a marriage doesn't mean you should get a divorce and go on Tinder and start dating around. That's the pushback. So it's not obvious that this is a strong future to have in order to launch new governments.

There's several different kind of lines of attack or debate or whatever on this. First is, yes, there's obviously value to tradition. And people say this is Lindy, and that's Lindy. It's been proven for a long time and so on. But of course there's a tension between tradition and innovation. You know, like going to the moon wasn't Lindy just. It was awesome. And you know, like artificial intelligence is something that's very new. New is good, right? And this is a tension within humanity actually itself because, you know, it's way older than all of these nations. I mean, humans are tens of thousands of years old. Answers to humans are millions of years old. Right. And you go back far enough, and the time that we know today of the sessile farmer and soldier is if you go back far enough, you want to be truly traditional. Well, we're actually descended from hunter gatherers who are mobile and wandered the world and there weren't borders and so on. They kind of went where they want. Right. And people have done historical reconstructions of skeletons and stuff like that. And many folks report that the transition to agriculture and being sessile resulted in, you know, diminution of height. People had like tooth decay and stuff like that. The skeletons, people had traded off upside for stability. Right. That's what the state was. That was what these sessile kinds of things were. Now, of course, they had more likelihood of living consistently. You could support larger population sizes, but it had lower quality of life. Right. And so the hunter gatherer, you know, maybe that's actually our collective recollection of a Garden of Eden where people just like a spider kind of knows innately how to build webs or a beaver knows how to build dams. Some people theorize that the entire Garden of Eden is like a sort of built in neural network recollection of this pre sessile era where we're able to roam around, just pick off fruits and so on. Low population density. So point is that I think what we're seeing is a V3. You go from the hunter gatherer to the farmer and soldier. The sessile nations are here and they've got borders and so on to kind of the V3, which is the digital nomad, the new hunter gatherer. We're going back to the future. Because you know, what's even older than nations is no nations. Right. Even more traditional than tradition is being international. Right. And so we're actually tapping into that other huge thread in humanity which is the desire to explore, pioneer, wander, innovate.

And I think that's important to make America great again is to dissolve it completely into oblivion. No, that's a joke.

Yeah, yeah, I know it's a joke.

Well, humor. I'm learning this new thing.

Yes, a new thing. For the robo, the chatbot emulation isn't fully working there.

Yeah, yeah, glitch. That's we're in the, in the beta.

And let me say one other thing about this which is, you know, there are, I mean everybody in the world, okay, let's say, I don't know what percentage, let's say 99.99% or it rounds to that number of political discourse in the US focuses on trying to fix the system. If those folks, I mean 0.01% of the energy is going towards building a new system, that seems like a pretty good portfolio strategy, right? Or 100% are supposed to go and edit this code base from 200 something years ago. I mean the most American thing in the world is going and leaving your country in search of a better life. America was founded 200 years ago by the founding fathers. It's not just a nation of immigrants as a nation of emigrants, right? Immigration, you know, from other countries to the US and actually also immigration within the US there's an amazing YouTube video called, it's like 50 states US population I think 1790 to it says 2050. So they've got a simulation so you just stop it at 2019 or 2020. But it shows that like Virginia was like number one early on and then it lost ground in like New York gained and then like Ohio was a big deal in the early 1800s and it was like father of presidents and generally presidents and later Illinois and Indiana and then California only really came up in the 20th century during the Great Depression. And now we're entering the modern era where like Florida and Texas have risen and New York and California have dropped. And so interstate competition, it's actually just like inter currency competition. You know you've got trading pairs, right? You sell btc, buy eth, you sell you know, Solana or zcash, you know, sell Monero, buy zcash, right? Each of those trading pairs gives you signal for today on this currency is down or up relative to this other currency. In the same way, each of those migration pairs, someone goes from New York to Ohio, Ohio to California, gives you information on the desirability of different states. You can literally form a pairs matrix like this over time, very much like the link matrix that's shaped America in a huge way. And so you know, you ask a if this nation of immigrants that was founded by men younger than us, by the way, the founding fathers were often in their 20s, right, who you know, endorse the concept of a proposition nation who've given rise to a country of founders and pioneers who've literally gone to the moon. Right. Those folks would think that this is the end of history, that that's it, we're done. Like we've. We've done everything else. I mean, there's people in technology who believe, and I agree with them, that we can go to Mars, that we might even be able to end death, but we can't innovate on Something that was 230 years old, you know, so.

There is a balance, certainly, to strike the. The American experiment is fascinating nevertheless. So one argument you can make is actually that we're in the very early days of this V2. If what you describe as V2, you could make the case that we're not ready for V3, that we're just actually trying to figure out the V2 thing. You're trying to, like, skip, when are we ever ready? Now, again, we'll go back to marriage, I think, and having kids kind of thing. I think everyone who has kids is never really ready to be kids. That's the whole point. You dive in. Okay, but I mean, you mentioned that you can launch. Is there other criticisms of government that you can provide as we know it today? Before we kind of outline the ideas of V3, let's stick to V2.

I'll give a few. Right. And so a lot of this stuff will go into the version. So I've got this book, the Network State, which. Which covers some of these topics.

Does Network State have a subtitle?

It is the Network State. How to Start a New Country.

How to Start a New Country.

But I just have it@thenetworkstate.com I should say.

It's an excellent book that you should get. I read it on Kindle, but there's also a website and Balaji said that is constantly working on improving it, changing it. By the time the whole project is over, it'll be a different book than it was.

Yeah.

In the beginning, I think so. Always shedding its old skin.

Well, I wanted to get something out there and get feedback and what? I just like an app.

Right.

You know, you again, you have these two poles of. An app is highly dynamic and you're accustomed to having updates all the time. And a book is supposed to be static, and there's a value in something static, something unchanged, and so on. But in this case, I'm glad I kind of shipped a version 1.0. And the next version I'm going to split into tentatively motivation, theory and practice. Motivation, like what is the political Philosophy and so on. That motivates me at least to do this, which you can take or leave and then theory as to why network state is now possible. And I can define it in a second. And then the practice is zillions of practical details and everything from roads to diplomatic recognition and so on, funding, founding, all that stuff. A lot of the stuff actually I left out of v1 simply because I wanted to kind of get the desirability of it on the table and then talk about the feasibility.

I should actually linger on that briefly in terms of things we can revolutionize. Like one of the biggest innovations I think that Tesla does with the way they think about the car, way to deploy the car is not the automation or the electric to me, it's the over the air updates, right? Be able to send instantaneously updates to the software that completely changes the behavior, the ux, everything about the car. And so I do think it would be interesting because books are a representation of human knowledge, a, A snapshot of human knowledge. And it would be interesting that we, if we can somehow figure out a system that allows you to do sort of like a GitHub for books. Like if I buy a book on Amazon without having to pay again, can I get updates like V1 1, V1 2 and there's like release notes, right? That would be incredible. It's not, not enough to do like a second edition or a third edition, but like minor updates that's not just on your website, but actually go into the, the model that we use to buy books.

Right.

So I spent my money, maybe I'll do a subscription service for five bucks a month where I get regular updates to the books. And then there's an incentive for authors to actually update their books such that it makes sense for the subscription. And that means your book isn't just a snapshot, but it's a lifelong project, right. You care enough about the book.

So I think there's a lot that can be done there because actually in going through this process, in many ways the most traditional thing I did was self publish ebook on Kindle. Right. Why? Because basically like, you know, if you actually ink a deal with a book publisher, first they, you know, they'll give you some advance. I, I didn't need the advance or anything. But second is all these constraints. Oh, you know, you want to translate into this or you want to do this other format or you want to update it, you have to go and now talk to this other party. Right. You know, and also the, the narrowing window of what they'll actually publish. It gets an hour and hour. You see all these, you know, meltdowns of young adult novels and stuff on Twitter, but it's, it's, it's more than that. So, you know, actually having an Amazon page, it's just like a marker that a book exists. Okay, and now I've got an entry point where if someone says, okay, I like this tweet, but how do I kind of get the. That, that might be a concept from like the middle of chapter three, right? How do I get the thing from front to back? I can just point them@the networks8.com, that is import this, right? This one entry point. Okay. And you mentioned like subscription and money and so and so forth. And I think people are paying for content online now with newsletters and so on, but I've chosen to. And it will always have the thing free and I want it on. You can get the Kindle version on Amazon simply because you have to kind of set a price for that. But networkstate.com what I want to do is have that optimized for every Android phone so people in India or Latin America or Nigeria can just tap and open it. Going to do translations and stuff like that. Greg Fodor of All Space VR, you know, founder of All SpaceVR, you know, he sold that and he coded the website and you know, worked with him on it. And there's another designer who Elijah. And it's basically just a three person group. And we thought we had something pretty nice. But one thing I was really pleasantly surprised by is how many people got in touch with us afterwards and asked us if we could open source the software to create this website. Right. Because actually you can try it on mobile. I think it's actually in some ways a better experience than Kindle. And so that was interesting because I do think of the website as like a V1 version of this concept of a book app. Right. For example, imagine if you have the Bible and the ten Commandments aren't just text, but there's like a checklist and there's a gateway to a Christian community there. And you know, the practice is embedded into the thing, you know, like, did you know brilliant.org Amazing site. I love this site. Brilliant is basically mobile friendly tutorials and you can kind of just swipe through. You know, you're in line at Starbucks or you know, getting on a plane or something. You just swipe through and just get really nice micro lessons on things. And it's just interactive enough that your brain is Working and you're problem solving and sometimes you'll need a little pen and paper. But that format of sort of very mobile friendly, just continuous learning. I'd like to do a lot more with that. And so that's kind of where we're going to go with the book app.

So there's a lot of fun stuff about the way you did at least V1 of the book, which is you have like a one sentence summary, one paragraph summary TLDR and like one image summary which is, I think honestly it's not even about a short attention span. It's a really good exercise about summarization, condensation and like helping you think through what is the key insight. Like we mentioned the prime number maze that reveals something central to the human condition which is struggling against the limitation of our minds. And in that same way you summarize the network state in the book. So let's actually jump right there and let me ask you, what is the network state?

What is the network state? So I'll give it a sentence and also give it an image. Right? So the informal sentence, a network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre existing states. Okay, so just taking those pieces. Highly aligned online community that is not Facebook, that is not Twitter. People don't think of themselves as Facebookers or Twitterians. Right. That's just a collection of hundreds of millions of people who just fight each other all day. Right. It's a fight club. A company is highly aligned where you'll put a task into the company Slack, and if you do it in all hands, about 100% of the people in a company Slack will do it. So they're highly aligned in that way. But online communities don't tend to be highly aligned. Online communities tend to be like a Game of Thrones fan club or something like that, or a Twitter account. You might get 0.1% of people engaging with something. It's not the 100%. If you combine the degree of alignment of a company with the scale of a community, that's what a highly aligned online community is starting to get. 1,000 or 10,000 people who can collectively do something as simple as just all liking something on Twitter, for example, why would they do that? They're a guild of electrical engineers, they're a guild of graphic designers. And you've got a thousand people in this guild. And every day somebody is asking a favor from the guild and the other 999 people are helping them out. For example, I've just launched a new project or I'd like to get a new job, can somebody help me? And so on. And so you kind of give to get. You're helping other people in the community and you're kind of building up karma this way. And then sometimes you spend it down like Stack Overflow has this karma economy. It's not meant to be an internal economy that is like making tons and tons of money off of. It's sort of keep score. Right? That's a highly aligned online community part then capacity for collective action. I just kind of described that, which is at a minimum, you, you don't have a highly aligned online community unless you have a thousand people and you paste in a tweet and a thousand of them RT it or like it, okay? If you can't even get that, you don't have something. If you do have that, you have the basis for at least collective digital action on something, okay? And you can think of this as a group of activists. You can think of it as, for example, let's say I mentioned a guild, but let's say they're a group that wants to raise awareness of the fact that life extension is possible. Right. Every day there's a new tweet on. I don't know whether it's Metformin research or Sinclair's work or David Sinclair, right? Andrew Huberman has good stuff here. Or there's a longevity vc. There's a bunch of folks working in this area every day. There's something there. And literally the purpose of this online community is raise your version of longevity. And of the thousand people, 970 go in like that. That's pretty good, right? That's solid. You've got something there. You've got a laser, right? You've got something. Which you can focus on something. Because Most of the Web2 Internet is entropic. You go to Hacker News, you go to Reddit, you go to Twitter, and you're immediately struck by the fact that it's like 30 random things. Random. It's just a box of chocolates. It's meant to be. You know, we're.

Some of them look delicious, some of them look delicious.

Novelty, we can over consume novelty, right? So you know, we were talking about earlier the balance between tradition and innovation, right? Here is a different version of that, which is entropy going in a ton of different directions due to novelty versus like focus. You know, it's like, it's like heat versus work. You know, heat is entropic and work force along a distance, you're going in a direction. Right. And so if those 30 links on, you know, the next version of Hacker News or Red or something like so brilliant, it's just that's leveling you up. The 30 things you click, you've just gained a skill as a function of that. Right. So these kinds of online communities, I don't know what they look like. They probably don't look like the current social media. They, they just like for example, I know this is a meta analogy, but in the 2000s people thought Facebook for work would look like Facebook and you know, David Sachs, you know, found and sold a company yammer that was partially on their basis. It was fine as a billion dollar company. But Facebook for work tended was actually Slack. Right. It looked different, it was more chat focused, it was less image focused and whatnot. What does the platform for a highly aligned online community look like? I think Discord is the transitional state, but it's not the end state. Discord is sort of chatty. The work isn't done in Discord itself. Right. The cryptocurrency for tracking or the crypto karma for tracking people's contributions is not really done in Discord itself. Discord was not built for that. And I don't know what that UX looks like. Maybe it looks like tasks, you know, like maybe it looks something different.

Okay, so let me linger on this. Actually, some people might not be even familiar with Discord or Slack and so on. Even these platforms have like communities associated with them, meaning the big, like the meta community of people who are aware of the feature set and that you can do a thing, that this is a thing, and then you could do a thing with it. Discord, like when I first realized that, I think it was born out of the gaming world.

Yes.

Is like, holy shit, this is like a thing. There's a lot of people that use this.

Right.

There's also a culture that's very difficult to escape that's associated with Discord that spans all the different communities within Discord. Reddit is the same. Even though there's different subreddits, there's still, because of the migration phenomena, maybe there's still a culture to Reddit and so on.

Yes.

So I'd like to sort of try to dig in and understand what's the difference between the online communities that are formed and the platforms on which those communities are formed.

Sure.

Important.

Yes, it is, it is. So for example, an office, a good design for an office is frequently you have you know, the. The commons, which is like the lunchroom or the gathering area. Then everybody else has a cave on the border. They can kind of retreat to cave in.

The comments I love, by the way, I was laughing internally about the heat versus work. I think that's going to stick with me. That's such an interesting way to see Twitter.

Yeah.

Like, is this heat or is this. Is this thread like, because there's a lot of stuff going on.

Right.

Is it just heat or we're doing some. Like, is it. Is there a directed thing that's got to be productive at the end of the day.

That's right.

Love this. I'll never see. Anyway, the cave in the commons is really nice. So that has to do with the layout of an office. That's effective.

That's right. And so you can think of many kinds of social networks as being on the cave and commons continuum. For example, Twitter is just all commons. The caves are just like individual DMs or DM threads or whatever. But it's really basically just one gigantic global public fight club for the most part. Right. Then you have or love club. Well, somewhat love, but mostly fight. Or actually it's.

I love aggressively. That's all.

Yeah, I mean, the way I think. I mean, Twitter is like a cross between, you know, a library and a civil war. You know, it's something where you can learn and.

And.

But. But you can also fight if you choose to fight, right?

Yeah. Well, I mean, it's. Because of its. The commons structure of it. It's a mechanism for virality of anything.

Yeah.

So you just describe the kind of things that become viral.

Yeah. Meaning no. No offense to Liberians. It's like a library. And Liberia. Liberia was wracked by civil war for. For many years. Right.

Libraries as well. One of my favorite sets for porn. Just kidding. Jokes I'm learning that's probably crossing the line for the engineers working on this humor module. Maybe take that down a notch.

Gosh, we're just talking about. Oh, yeah. So continue.

Twitter is a commons.

Yeah. So Twitter's a commons. Then Facebook is like. It's got all these warrens and stuff. Facebook, it's very difficult to reason about, like, privacy on that. And the reason is, I think it's easy to understand when something is completely public, like Twitter, or completely private, like signal. And those are the only two modes, I think, in which one can really operate when something is quasi private, like Facebook, you have to just kind of assume it's public because if. If it's interesting Enough it'll go outside your friend network and it'll get screenshotted or whatever and posted. And so, you know, Facebook is sort of, sort of forced into default public despite its privacy settings. You know, for anybody who says something interesting, you know, if it's like you can figure out all their dials and stuff like that, but just hard to understand unless it's totally private or totally public. Right. You have to basically treat it if it's totally public. If it's not totally private. Okay, at least under a real name, I'll come back to pseudonym. So you've got Twitter, that's, that's total Commons Facebook, which is like a warrens, you know, like, you know, it's like rabbit warrens or like an ant colony where you don't know where information is traveling. Then you've got Reddit, which has sort of your global Reddit and then all the subreddits. That's a different model of Cave and Commons. I think one of the reasons it works is that you have individual moderators where something is totally off topic and unacceptable in this subreddit and totally on topic and acceptable in another. That's like kind of a precursor of the digital societies I think that we're going to see that actually have become physical societies. Like lots and lots of subreddit like things have become physical societies. Then you start going further into Discord, where it's, it's more full featured than, you know, as you go Twitter, Facebook, Reddit. Now you jump into Discord. And Discord is a bunch of individual communities that are connected and you can easily sort of jump between them. Right. And then you have Slack. And you know, yes, you can use Slack to go between different company slacks. But Slack, historically, at least, I'm not sure what their current policy is. Historically they discouraged public slacks. So there it's mostly like you have your main Slack for your company and then you sometimes may jump into like a, let's say you've got a design consultant or somebody like that. You'll jump into their Slack. But Discord is you've got way more discords usually that you jump into than slacks. Right.

Well, and let me ask you then on that point, because there is a culture. One of the things I discovered on Reddit and Discord of anonymity or pseudonyms or usernames that don't represent the actual name on Slack is an example of one, because I think I did a, I used to have a Slack for like deep learning course that I was teaching and that was like, very large, like 20,000 people, whatever. But. So you could grow quite large. But there was a culture of like, I'm going to represent my actual identity, my actual name, and then same stuff in Discord. I think I was the only asshole using my actual name on there. It's like everybody was using pseudonyms. So what's, what's the role of that in the online community?

Well, so I actually gave a talk on this a few years ago called the Pseudonymous Economy. Okay. And it's come back faster than I expected, but I did think it was going to come about fairly fast. And essentially the concept is obviously, we've had. So first, anonym pseudonym, real name. Right. Can you describe the difference between Anonymous is like 4chan, where there's no tracking of a name, there's zero reputation associated with an identity. Right. Pseudonymous is like much of Reddit, where there's a persistent username and it has karma over time, but it's not linked to a. The global identifier that is your state name. All right, so your quote, real name. Even the term real name, by the way, is a misnomer because it's like your Social Security name, like Social Security number. It's your official government name. It's your. It's your state name. It is the tracking device. It's a. It's an airtag that's put on you.

Right.

Why do I say that right? Another word for a name is a handle. And so just visualize, like a giant file cabinet. There's a handle with Lex Freeman on it that anybody, the billions of people around the world can go up to, and they can pull this file on you, out images of you, things you said. Like, billions of people can stalk billions of other people. Now that's a very new thing. And I actually think this will be a transitional era in, like, human history. We're actually going to go back into a much more encrypted world.

Let me linger on that, because another way to see real names is the label on a thing that can be canceled.

Yes, that's right. In fact, there's a book called Seeing Like a State, which actually talks about the origins of surnames and whatnot. Like, if you have a guy who is that guy with brown hair, that's like an analog identifier. It could mean 10 different people in a village. But if you have a first name, last name, okay, that guy can now be conscripted. You can go down with a list, a list of digital identifiers. Pull that guy out. Pull him, you know, into the military for conscription, right? So that was like one of the purposes of names was to make masses of humans legible to a state, right? Hence seeing like a state. You can see them now, right? See, digital identifiers. One thing that people don't usually think about is pseudonymity is itself a form of decentralization. So, you know, people know Satoshi Nakamoto was pseudonymous. He also knows into decentralization. But one way of thinking about it is let's say his real name, okay? Or his state name is a node, okay? Attached to that is every database you know, his, his Gmail, his, you know, Facebook, if he had one, every government record on him, right? All of these databases have that state name as the foreign key, right? And so it can go and look things up in all of those databases, right? And so think of it as being the center of a giant network of all of these things. When you go and create a pseudonym, you're budding off a totally new node that's far away from all the rest. And now he's choosing to attach Bitcointalk and Bitcoin.org and the GPT signatures of the code if he choose to do that. All those things, the digital signatures are all attached to this new decentralized name because he's instantiating it, not the government, right? One way of thinking about it is the root administrator of the real name system is the state. Because you cannot simply edit your name there, right? You can't just go, you can't log into USA.gov and backspace your name and change it. Moreover, your birth certificate, all this stuff that's fixed and immutable, right? Whereas you would take for granted that on every site you go to, you can backspace. You can be like, call me Ishmael, you know, walk into a site, use whatever name you want. You decide to use the same name across multiple sites. You can do that. And if not, you don't have to. One thing that we're seeing now actually is at the level of kids, you know, the younger generation. Eric Schmidt several years ago mentioned that, you know, people would like change their names when they became adults so that they could do that. This is kind of already happening. People are using, I remarked on this many years ago, search resistant identities, okay? Why they have their Finsta, which is their quote, fake name, Instagram, and Rinsta, which is their real name, Instagram. This is cool, okay? And what's interesting is on their Rinsta, they're their fake self because they're in their Sunday best and you know, smiling. And this is the one that's meant to be search indexed, right? On the finsta, their fake name. This is just shared with their closest friends. They're their real self and they're, you know, hanging out at parties or whatever, you know. And so this way they've got something which is the public Persona and the private Persona, right? The public Persona that's search indexed and the private Persona that is private for friends, right? And so organically people are, you know, like Jean Jacobs, she talks about like cities and how you know, they're organic and what I like some of the mid 20th century guys, the architecture they had removed shade from awnings and stuff like that got removed. So this is the restoration of awnings and shade and structure so that you're not always exposed to the all seeing web crawler that I have soar on which is like Googlebot just indexing everything. These are search resistant identities. And that eye just sort of passes over you like in the Terminator. Like the Terminator I just kind of passes over you, right? So search resistant identity is non pulled up, it's not indexed, right. And now you can be your real self. And so we've had this kind of thing for a while with communication. The new thing is that cryptocurrency has allowed us to do it for transaction. Hence the pseudonymous economy. Right? And should go from anonymous pseudonymous real name. These each have their different purposes, but the new concept is that pseudonym, you can have multiple of them. By the way, your ENS name, you could have it under your quote real name or state name like LexFreedman ETH. But you could also be Punk6529 ETH. Okay, and now you can earn, you can sign documents, you can boot up stuff. You can have a persistent identity here which has a level of indirection to your real name. Why is that very helpful? Because now it's harder to both discriminate against you and cancel you concerns of various factions are actually obviated or at least partially addressed by going pseudonymous as default, right? It is the opposite of bring your whole self to work. It's bring only your necessary self to work, right? Only show those credentials that you need right? Now, of course, you know, anybody who's in cryptocurrency understands sushi, nakamoto and so on is for this. But actually many progressives are for this as well. Why you don't ban the boxes? It's like you're not supposed to ask about like felony convictions, when somebody is, you know, being hired because they've paid, they've served their time, right? Or you're not supposed to ask about immigration status or marital status in an interview. And, you know, people have this concept, blind auditions, where, you know, if a woman is auditioning for. For like a violin seat, they put it behind a curtain so they can't downgrade, you know, her for playing, so her performance is judged on the merits of its audible quality, not in terms of who. Who this. This person is. So this way they don't discriminate versus male or female for. For who's getting a violin position. So you combine those concepts, like ban the box, not asking these various questions, blind additions. And then also the concept of implicit bias. If you believe this research, people are unconsciously biased towards other folks. Okay, so you take all that, you take satoshi and you put it together and you say, okay, let's use pseudonyms. That actually takes unconscious bias even off the table, because now you have genuine global equality of opportunity. Moreover, you have all these people, billions of people around the world, that might speak with accents, but they type without them. And now if they're pseudonymous, you aren't discriminating against them, right? Moreover, with AI, very soon, the AI version of Zoom, you'll be able to be whoever you want to be and speak in whatever voice you want to speak in, right? And you'll be. And that'll happen in real time.

So, I mean, this is really interesting for Finsta and Rinsta, there's some sense in which the fake Instagram, you're saying, is where you could be a real self? Well, my question is, under under a pseudonym or when you're completely anonymous, is there some sense where you're not actually being your real self, that as a social entity, human beings are fundamentally social creatures, and for us to be social creatures, there is some sense in which we have to have a consistent identity that can be canceled, that can be criticized or applauded in society, and that identity persists through time. So is there some sense in which we would not be our full, beautiful human selves unless we have a lifelong, consistent, real name attached to us in a digital world?

So this is a complicated topic, but let me make a few remarks. First, is real names, quote unquote, state names were not built for the Internet. They actually state names, right? It's actually a great way of thinking about Social Security name, right? So your state name, your official name, was not built for the Internet. Why? They give both too much information and too little, okay, so too much information because someone with your name can find out all kinds of stuff about you. Like for example, if someone doesn't want to be stalked, right? The real name is out there, their stalker knows it. They can find address information, all this other kind of stuff, right? And with all these hacks that are happening, just every day we see another hack, massive hack, etc. That real name can be indexed into data that was supposed to be private, right? Like for example, you know, the Office of Personnel Management, like the government, the US Government, many governments actually are like a combination of the surveillance state and the Keystone Cops, right? Why they, they slurp up all the information and they can't secure it, so it leaks out the back door. Okay? They've, they basically have, you know, 100 million records of all these very, 300 million records, all this very sensitive data. They just get owned, hacked over and over again, right? And so really there should be something which totally inverts the entire concept of KYC and what have you. And of course comply with the regulations as they are currently written. But also you should argue privacy over kyc. The government should not be able to collect what it can't secure. It's slurping up all this information. It's completely unable to secure it. It's hacked over and over again. You know, China probably has the entire OPM file. And it's not just that like Texas is hacked and some of these hacks are not even detected yet, right? And these are just the ones that have been admitted. And so what happens is criminals can just run this stuff and find, oh, okay, so that guy who's got that net worth online and he merges various databases, they've got a bunch of addresses to go and hit, okay? So in that sense, real names were not state names, were not built for the Internet. They just give up too much information. In our actually existing Internet environment, they give up too much information on their hand. They also give too little. Why if instead you give out lexfriedman Eth, okay? Or a similar crypto domain name or urban name or something like that. Now that's actually more like a DNS. Okay, first, if you've got a LexFreedman ETH, what can you do that? Some you can do today, some you'll soon be able to do. You can pay LexDream ETH, you can message LexDream ETH, you can look it up like a social profile, you can send files to it, you can upload and download. Basically it combines Aspects of an email address, a website, a username, etc. Etc. But you, you know, eventually I think you'll go from email to phone number to ENS address or something like that as the primary online identifier. Because this is actually a programmable name. Right. Whereas a state name is not. You know, think about it like a state name will have apostrophes perhaps in it or is that your middle name or this and that. That was a format that was developed for the paper world.

Right.

Whereas the ENS name is developed for the online world. Now, a reason to say ENS or something like it, you know, with somebody at a, in a village, they'll. Their name might be Smith because they were a blacksmith or potter because they were a potter. Right. In the same way, I think your surname right now for many people it's dot eth and that reflects the Ethereum community. Your surname online will carry information about you like Dot Sol says something different about you. BTC says, yet something different. I think we're going to have a massive fractionation of this over time. We're still in the very earliest days of our Internet civilization.

Right.

100, 200 years from now, those surnames may be as informative as say Chen or Friedman or Srinivasan in terms of what information they carry. Because the protocol, it's a civilization fundamentally that you're associated with.

Right, right. So there's some improvements to the real name that you could do in the digital world. But do you think there's value of having a name that's persists throughout your whole life that is shared between all the different digital.

I think you should.

Communities.

I think you should be able to opt into that. Right. At which, at which level in terms of the society that you're joining.

Wait a minute, so can I murder a bunch of people in Society 1 and then go to society too and be like, I'm murder free. My. My name is.

I don't mean it like that. No, no, yeah, so.

But that's the application I'm interested in. Okay, well, so what, what resist.

But, but.

Well, I know I would like you to prevent me.

Sure.

A person who's clearly bad for society from doing that.

Sure, sure. Murder is going to be against the rules in almost every society. And I mean basically, I mean people will argue. Yeah, most likely. Right. And the reason I'm thinking animals. Well, I'm thinking of like the Aztecs or the Mayas or you know, something like that. There's various, you know, Soviet Union, there's weird there's weird edge, not edge case approach. Yeah. There's societies, unfortunately that have actually that's why, that's why I asked Tristram. But let's say murder is something that society one probably has effectively a social smart contract, or a social contract that says that's illegal, therefore you're in jail, therefore you're deprived of the right to exit. But upon entry into that society, in theory you would have said, okay, I accept this quote, social contract. Right. Obviously if I kill somebody, I can't leave. Okay, so you've accepted upon crossing the border into there. Right. Now, as I mentioned, what is murder? People will. I mean, there's an obvious answer, but as I said, there's been human sacrifice in some cities. Communism, they kill lots of people. Nazism, they kill lots of people. Unfortunately, there's quite a lot of societies. I wanted to say it's an edge case, but maybe many of the 20th century societies around the world have institutionalized some kind of murder, whether it was the Red Terror in the Soviet Union or obviously the Holocaust or the Cultural Revolution or year zero and so on and so forth. So my point there is that who is committing all those murders? It was the state, it was the organization that one is implicitly trusting them to track you. Right. And how did they commit those murders? Well, how did Lenin, you know, you know the hanging order, you know what I'm talking about? The hanging order for the kulaks.

Yes.

Okay. The famous hanging order which actually showed they were actually bloodthirsty. The key thing was he said, here's a list of all the rich men, the kulaks go and kill them. The real names, the state names, were what facilitated the murder. They didn't prevent the murderers there. Right. So my point is just in the ethical weighting of it, it's a two sided thing. Right? You're right that the tracking can prevent disorganized murders, but the tracking facilitates, unfortunately, organized murders, lists of undesirables were the primary tool of all of these oppressive states in the 20th century. You see my point.

I see your point and it's a very strong point. In part, it's a cynical point, which is that the rule of a centralized state is more negative than positive.

I think it is a, it is like, it's like nuclear energy. Okay? It's, it's, it's like fire. It is something which you're going to keep having it reform because there's, there's good reasons where you have centralization, decentralization, recentralization, but power Corrupts absolute power, corrupts absolutely. And you just have to be very suspicious of this kind of centralized power. The more trust you give it, often the less trust it deserves. It's like a weird feedback loop, right? The more trust, the more it can do. The more it can do, the more bad things it will do.

So, okay, there is a lot of downside to the state being able to track you, right? And history teaches us lessons. One, at a large scale, especially in the 20th century, at the largest of scale, a state can do commit a large amount of murder and suffering.

And by the way, history isn't over if you think about what the Chinese are building on this, right, that surveillance state, it's not just tracking your name, it's tracking everything on you. You know, like WeChat is essentially like is all the convenience and none of the freedom.

So that's the downside. But don't you. The question is, I think probably fundamentally about the human nature of an individual, of how much murder there would be if we can just disappear every time we murder. Well, I mean, at the individual level.

So the issue is basically like once one realizes that the moral trade off has two poles to it, right? And moreover that basically centralized organized murder has, I mean, if we add up all the disorganized murder of the 20th century, it's probably significantly less than the organized murder that was that these states facilitated, right? And probably by, you know, RJ Rummel has this thing called democide, right? And the thing is it's so grim, right, because you know, it's saying like one. One death is a tragedy, a million is a statistic, right? These are just like, just incalculable tragedies that we can't even, you know, understand but, but nevertheless engaging with it. I don't know, is it ratio 10x, is it 100x? I wouldn't be surprised if it's 100x.

Yeah, but have you seen the viciousness, the negativity, the division within online communities that have anonymity?

So that's the thing. Basically. There's also a Scylla and a Charybdis. I'm not. When you see what centralization can do and you correct in the direction of decentralization, you can overcorrect with decentralization and you get anarchy. And this is basically. Then you want to recentralize, right? And this is the, you know, I think it's the romance of the three kingdoms. The empire long united must divide. The empire long divided must unite. That's always the way of it. Right. So what's going to happen is we will state certain verbal principles. Right. And then the question is, where in state space you are? Are you too centralized? Well, then, okay, you want to decentralize and are you too decentralized? Only you want to centralize and maybe track more. Right. And people opt into more tracking because they will get something from that tracking, which is a greater societal stability. So it's kind of like saying, are we going north or south? And the answer is like, what's our destination? Where's our current position in the, in the civilizational state space?

Well, my main question, I guess is, does creating a network state escape from some of the flaws of human nature? The reason you got Nazi Germany is a large scale resentment with different explanations for that. Resentment that ultimately lives in the heart of each individual that made up the entirety of Nazi Germany and had a charismatic leader that was able to channel that resentment into action, into actual policies, into actual political and military movements. Can't you not have the same kind of thing in digital communities as well?

Have you heard the term argumentum ad Hitlerum or like Godwin's Law or something like, you know, it's something where, if the reference point is Hitler, it's this, it's this thing where a lot of things break down. But I do think, I mean, look, is there any. Did Bitcoin manage to get where it was without a single shot being fired? To my knowledge, yes.

Right.

Did Google manage to get to where it is without shots being fired? Absolutely.

And while a lot of shots were being fired elsewhere in the world.

Sure.

And.

But who's firing those shots? Right.

Yeah, but that's because Bitcoin and Google are a tiny minority of communities. That's, it's like the, the icing on the cake of human civilization.

Sure. Basically any technology, I mean, like, you can use, you can use a hammer to go and hit somebody with it. Right. I'm not, I'm not saying every technology is equally destructive or what have you, but you can conceive of. It's kind of like Rule 34, but for technology. Right. You okay. Right. You can, you can probably figure out.

Your ability to reference brilliant things throughout is quite admirable. Yes. But Anyway, sorry, Rule 34 for technology.

Rule 34, but for abusive technology, you can always come up with a black mirror version of something. And in fact, there is this kind of funny tweet which is like sci fi author. My book Don't Invent the Torment. Nexus was meant to be a cautionary tale on what would happen if society invented the torment neckness. And then it's like tech guys, at long last we have created the torment necklace. And so the thing is that simply describing something, some abuse, unfortunately, after the initial shock wears off, people will unconsciously think of it as sort of an attractor in the space. Right. It's like, I'll give you some examples. Like, you know, Minority Report had the gesture thing. Right. And the Kinect was based on that. So it's a dystopian movie, but had this cool kind of thing and people, you know, kind of keyed off it.

Right.

Or people have said that movies like, you know, Full Metal Jacket, that was meant to be, in my. My understanding is meant to be like an anti war movie, but. But lots of, you know, soldiers just love it, you know, despite the fact that the drill sergeant's actually depicted as a bad guy. Right. For the sort of portrayal of that, you know, kind of kind of environment. Right. So I'm just saying it's like giving the vision of like the digital Hitler or whatever is not actually a vision I want to paint. I do think, is it? Is it? Everything is. It's possible. Obviously, you know, ISIS uses the Internet. Right. Like, is it?

Yeah, I'm not. We're not bringing up Hitler in a shallow argument. We're bringing up Hitler in a long, empathetic, relaxed discussion, which is. Which is where Hitler can live in a healthy way. So there is a. There's deep lessons in Hitler and Nazi Germany as Stalin. Yes.

Okay. So in many ways, you know, and this is a very superficial way of talking about it, but this is. Exit is the anti genocide technology. Right. Because Exit is the route of the politically powerless. Exit is not. People always say, oh, exit is for the rich. That's actually not true. Most immigrants equals. Most immigrants are not rich. They're politically powerless.

Can you describe Exit?

What is Exit? So there's this book which I reference a lot. I like it called Exit, Voice and Loyalty by Albert Hirschman. And he essentially says, and I gave this talk in 2013 that goes through this YCSTARB school. But just to describe these voices, reform Exit as alternatives. For example, in the context of an open source project, Voice is submitting a bug and Exit is forking in a company Voices. You're saying, hey, here's a ticket that I'd like to get solved. And Exit is taking your business elsewhere at level of corporate governance. Voices Board of directors vote and Exit is selling your shares in a country. Voice is a vote and Exit is migration. Okay. And I do think that the two forces we talk about a lot, democracy and capitalism, are useful forces, but there's a third, which is migration, right? So you can vote with your ballot, you can vote with your wallet, you can vote with your feet. Wallet has some aspects of exit built into it, but voting with your feet actually has some aspects of voice built into it. Because when you leave, it's like an amplifier on your vote. You might say 10 things, but when you actually leave, then people take what you said seriously. You're not just, like, complaining or whatever. You actually left San Francisco because it was so bad on this and this issue, and you've actually voted with your feet. It is manifest preference as opposed to state of preference. So voice versus exit is this interesting dichotomy. Do you try to reform the system or do you exit it and build a new one, or seek an alternative? And then loyalty modulates this, where if you are a patriot, as part. The initial part of your conversation, right? Like, you know, are you. Are you a traitor? You know, you're giving up on our great thing or whatever, right? And, you know, people will push those buttons to get people to stick. That's like, you know, I shouldn't say the bad version. Let's say a common version. Sometimes good, sometimes bad, then. But then there's the good version, which is, oh, you know, maybe the price is down right now, but you believe in the cause. So even if they're on paper, you would rationally exit. You believe in this thing, and you're going to stick with it. Okay? So loyalty can be, again, good and bad, but it kind of modulates a trade off between voice and exit. Okay? So given that framework, we can think of a lot of problems in terms of am I going to use voice or exit or some combination thereof, because they're not mutually exclusive. It's kind of like left and right subject. Use both together. I think that one of the biggest things the Internet does is it increases microeconomic leverage and therefore increases exit in every respect of life. For example, on every phone, you can pick between Lyft and Uber. When you're at the store, you see a price on the shelf, and you can comparison shop. If it's Tinder, you can swipe right. If it's Twitter, you can click over to the next account. The back button is exit. The microeconomic leverage. Leverage in the sense of alternatives. This is one of the fundamental things that the Internet does. It puts this tool on your desktop, and now you can go and talk to an illustrator or you can kind of build it yourself by typing in some characters into dall E. And that.

Makes the positive forces of capitalism more efficient. Increase in microeconomic leverage.

And it's individual empowerment. And so our sort of industrial age systems were not set up for that level of individual empowerment. Just to give you like one example that I think about, we take for granted every single website you go and log into. You can configure your Twitter profile and you can make it dark mode or light mode. And your name, all this stuff is editable, right? How do you configure your USA experience? Is there a USA.gov that you edit? Can you even edit your name there?

Dark mode for usa.

But I mean just your profile is there, is there like a national profile? I mean there's like driver's license point is that it's assumed that it's not like individually customizable quite in that way. Right. Of course you can move around your house and stuff like that, but it's not like your experience of the US is like configurable.

You know, let me think about that. Let me think about sort of the analogy of it. So the microeconomic leverage, you can switch apps, can you switch your experience in small ways efficiently, multiple times a day inside the United States? Well, the physical world, yeah. Under the constraints of the physical world, you do like micro migrations.

So this is coming back to the hunter gatherer, farmer, soldier, digital nomad kind of thing, right? The digital Nomad combines aspects of the V1 and the V2 for a V3, right? Because digital Nomad has the mobility and freedom of the hunter gatherer, but some of the consistency of the civilization of the farmer and soldier. Right? But coming back to this like one way thing about it is in the 1950s, if a guy in assembly line might literally push the same button for 30 years, okay. Whereas today you're pushing a different key every second, right? That is, that's like one version of like microeconomic leverage. Another. Another version is, you know, in the 1980s, I mean they didn't have Google Maps, right? So you couldn't just like discover things off the path. People would just essentially do, you know, home to work and work to home and home to work. And a trip had to be planned, right. They were contained within a region of space. Or you do home to school, school to home, home to school. You know, it wasn't like you went and explored the map. Most people didn't. Right. They were highly canalized. Okay. Meaning, you know, the. It was just back and forth, back and Forth, very routine. Just like the. Push the button. Push the button. Trapped within this very small piece and also trapped within this large country because it was hard to travel between countries and so on. Again, you know, of course, there were vacations, of course there was some degree of news and so on. Your mobility wasn't completely crushed, but it was actually quite low. Okay. Relatively speaking. Just. You were. You were trapped in a way that you weren't even really thinking about it. Okay. And now that map has opened up. Now you can see the whole map. You can go all over the place. You know, I don't have the data to show it, but I would. I'd be shocked if people, the average person didn't go to more places, wasn't, you know, doing more, you know, going to more restaurants and things like that today than they were in the 80s. Simply because the map is open. Okay.

And the map is made more open through the digital world.

The digital world, exactly. So we're reopening the map like the Hunter Gatherer. Okay. Because you can now think about every site for very low cost that you can visit. Right. The digital world. You can. I mean, how many websites have you visited? I don't know, hundreds of thousands, probably at this point over your life. Right. How many places on the surfaces. You're actually unusual. You might be like a world traveler, what have you. Right. But still, even your physical mobility is less than your digital mobility. Right. You can just essentially, I mean, the entire concept of nations and borders and whatnot didn't exist in the Hunter Gatherer era, Right. Because you couldn't. You couldn't build permanent fortifications and whatnot. Even. Even nations as we currently think of them, with like, demarcated borders. You needed cartography, you needed maps. Right. That stuff didn't exist for a long time. You just had sort of a fuzzy area of. We kind of controlled this territory. And these guys are on the other side of the river. Okay.

I think just to.

I don't want to digress too much, but.

Yeah, where digress away. I think entirety of life on Earth is a kind of a digression which creates beauty and complexity as part of the digression. I think your vision of the network state is really powerful and beautiful. I just would want to linger on this.

Let's talk about it.

Real name issue.

Yes.

Let me just give you some data.

Go ahead.

Personal anecdotal experience data. There's a reason I only do this podcast in person. There is something lost in the digital space.

Oh, sure.

And I find now I Personally believe to play devil's advocate against the devil's advocate that I'm playing. I personally believe that this is a temporary thing. We will figure out technological solutions to this. But I do find that currently people are much more willing to be on scale, cruel to each other online than they are in person. The way to do that. Just visited Ukraine, went to the front. The way you can have people be cruel to each other in the physical space is through the machinery of propaganda that dehumanizes the other side.

Right.

All that kind of stuff that's really like hard work to do online. I find just naturally the individual scale people somehow start too easily, engage in the drug of mockery, derision and cruelty.

Yes.

When they can hide behind anonymity. I don't know what that says about human nature. I ultimately believe most of us want to be good and have the capacity to do a lot of good, but sometimes it's fun to be shitty, to shit on people to be cruel. I don't know what that is.

It's weird because I think, you know, one of my sayings is just like the Internet increases microeconomic leverage, the Internet increases variance for anything that existed before. You have, you know, the 0 and 100 versions of it. I'll give some examples and I'll come to this. For example, you go from the 30 minute sitcom to, to the 30 second clip or the 30 episode Netflix binge, right? You go from guy working 95 to the guy who's the, you know, 40 years old and has failed to launch, hasn't, you know, the. Doesn't have a job or anything. And the 20 year old tech billionaire, okay? You go from all kinds of things that were sort of Gaussian or kind of constrained in one location to kind of extreme outcomes on both sides, okay? And applying that here you are talking about the bad outcome, which I agree does happen. Where the Internet in some sense makes people have very low empathy between others. But it also is the other extent where people find their mental soulmates across the world. Someone who's living in Thailand or in, you know, like Latin America, who thinks all the same stuff, just like them. Wow, you never met this person before, right? You get to know them online, you meet in person. It's like, you know, the brains have been communicating for two years, three years you've been friends and you see them in person. It's just great, right? So it's actually, it's not just the total lack of empathy. It is frankly, far more empathy than you would be able to build. Usually with an in person conversation in the 80s or the 90s with someone on their side of the world, because you might not even be able to get a visa to go to their country or not even know they existed, how would you be able to be able to find each other? And so on and so forth. Right. So it is kind of both. It is tearing society apart and it's putting it back together both at the same time.

My main concern is this. What I see is that young people are for some reason more willing to engage in the drug of cruelty online under the veil of anonymity.

That's what you're seeing publicly, but you're not seeing the private chats like this. It's kind of, it's a, it's a.

I work for the intelligence agency, so.

I'm using the private chats.

I mean, I'm collecting all of your data. Yeah, yes, but you can intuit stuff and I don't think I'm being very selective. I mean, I, if you, if you just look at the young folks, I mean, I am very concerned about the, the intellectual, psychological growth of young men and women.

So I'm, I'm not disagreeing with you on this. I am saying, however, there is a positive there that once we see it, we can try to amplify that with technology.

Yes, yes, but I'm just saying the very, very basic technology, like if stuff I caught up over the weekend kind of thing. I think if I throw anonymity on top of that, it will lead to many bad outcomes for young people.

Anonymity, yes. Pseudonymity, maybe not because Reddit is actually fairly polite.

Right. The entirety of Reddit just chuckled as you said that.

Well, well, within it, within a subreddit, it's actually fairly polite, like they say. You're not usually seeing it depends on which subreddit. Of course.

There's a consistency, there's a. Right. I think definition of politeness is interesting here because it's polite within the culture of that subreddit.

Yes. They abide by, let me put it a different way. They abide by the social norms of that subreddit.

Right. And that's the definition of politeness.

Yeah. Or civility. Is that right?

So there is an interesting difference between pseudonymous and Anonymous. You're saying it's possible that pseudonymity you can actually avoid some of the negative aspects.

Absolutely. We're redunbarizing the world in some ways with China being the big exception or outlier. The Dunbar number, 150 people. If you know that's roughly the scale of your society. Right. That's the number of people that a human can kind of keep in their brain, whether apocryphal or not. I think that's probably roughly true. And we're redenburgizing the world because A, we're making small groups much more productive, and B, we're making large groups much more fractious. Right. So you have an individual like Notch who can program Minecraft by himself, or Satoshi who could do a v1 of bitcoin by himself, or Instagram, which is just like 10 people, or WhatsApp, which is like 50 people when they sold. But the other hand, you have huge countries of hundreds of millions of people that are just finding that the first and second principle, or they're just splitting on principal components. Scott Alexander thinks of them as scissor statements. Statements that one group thinks is obviously true, one group thinks is obviously false. You can think of them as political polarization. You think of it in terms of game theory. There's lots of different reasons you can give for why this happens, but those large groups now are getting split. And so you have both the unsustainability of these large sort of artificial groups and the productivity of these small organic ones. And so that is kind of. It's sort of obvious. That's the direction of civilizational rebirth. We just need to kind of lean into that scissors.

There's so many beautiful. Just like, you know, we mentioned chocolates, they're advertising themselves. Your entirety speech is an intellectual like box of chocolates. But okay, so I don't think we finished defining the network state. Let's like linger on the definition. You gave the one sentence statement which I think essentially encapsulated the online nature of it. I forget what else. Can we just try to bring more richness to this definition of how you think about the network state?

Absolutely. So that informal sentences. A network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre existing states. So we talked about was the alignment of online communities and the capacity for collective action.

Yep.

Well, one collective action, it could be a thousand people liking a tweet. Right. If you can get a thousand of a thousand people doing it. But a much higher level, much higher bar is a thousand people crowdfunding territory and actually living together just like people currently. Physical space in physical space and not all in one place. That's critical. Just like Bitcoin is a decentralized currency, the network sees a Recipe for a decentralized state like entity, okay? Where it starts with, you know, for example, two people just get, you know, they become roommates. They meet in this community, they become roommates, okay? They get a place together, or 10 people get a group house, or eventually 100 people just buy a small apartment building together. And guess what? They start getting equity, not just paying rent, okay? These are all people who share their values. And now they can crowdfund territory together. Now, of course, they don't just jump straight from a thousand people liking something to a thousand people crowdfunding something. What I described in the middle is you do a lot of meetups. You get to know these other people before you decide to live, you know, collectively with them. Once you live with them, you start to get a network effect. For example, if those hundred people want to learn Spanish or Turkish or Vietnamese, they could all have a building where they're doing Vietnamese immersion, right? And that's something which they get a benefit from being physically around the other people that the pure digital wouldn't give them to quite the same extent. Right? And so crowdfunds territory around the world, crucially, not just one place. They're all connected by the Internet. Just like Hawaii is 2,000 miles away from the continental U.S. but both sides think of them as American. But the people on Hawaii and people.

In the continental U.S. what's the role of having to have territory if most of the exchange? So presumably, as technology gets better and better, the communication, the intimacy, the exchange of ideas all happens in a digital world. What's the importance of being able to crowdfund territory?

Well, because we're still physical creatures. You. You can't reproduce yet digitally, Right? There's still lots of things.

It's all about sex.

Well, that's going to be part of it. You're going to want to, you know, reproduce.

Are we talking about a cult?

It's not a cult. It's not a cult.

Why can't you just, like, take a train? Why is it not a cult?

It's not a cult because a cult is very internally focused and it's, it's. It tries to close its members off from the outside world. This is much more how America itself was populated where there were lots of towns. Like Penn is named after William Penn or the founder of texts like Sam Houston. Right? Lots of towns like the Oneida Commune in northern New York. They recruited and they became a town, and they became actually the Oneida Glassware Company kind of makes glassware out of there. All of these communities that were opt in. Voluntary communities were not simply like cults that were closed off from the world. They were meant to set an example to the world of what virtuous living looked like. And they were trying to recruit from the rest of the world. They were exporting goods to the rest of the world. Right, so is, um, it's. Yes, reproduction. It's, you know, marriage and kids and so on, but it's also just hanging out. And it is just. The physical world is very high bandwidth. There's lots of stuff, you know, it's fun to just go and have a dinner in person, just to hang out to build things. Moreover, there's also lots of innovation that can only take place in the physical world. You know, look, I'm, you know, one of my sayings in the book is cloud first, land last, but not land never. Okay. In many ways, what. One of the problems the book solves is Thiel's problem of, you know, we have innovation in bits, but not in atoms. Right. We can build a billion dollar company online, but we need a billion permits to build a shed in San Francisco. Right. How do you reconcile that? Well, what is stopping the innovation in atoms? It is a thicket of regulations. What are those regulations? Ultimately, a social construction. If you lean into the whole deconstructionist school of thinking, you can deconstruct and then reconstruct the state itself, given sufficient social consensus online. Okay. If the population of Nevada had 100% consensus, you could just dissolve every law in Nevada in theory and then build new ones. Okay? So the online consensus of getting people to agree on something is upstream of what happens offline. So once you have consensus in bits, the human consensus also, you know, cryptographic consensus, cryptocurrency consensus, then you can reshape the world of atoms. The reason we can't reshape the world of atoms right now is because you don't have that consensus of minds. Okay? For example, in SF, anything you do, there's going to be 50% of people who are against you. So that's just a recipe for gridlock. Whereas if you have a bare piece of land that everybody agrees on, you can get 70,000 units, get set up in Burning man in just a few days. That's the power of when you actually have human consensus. And one way I talk about this also in the book a little bit, and this, I'm going to go much more into detail into V2. I think of this as 100% democracy, as opposed to 51% democracy, 51% democracy, which is the current form of government is 49% dictatorship. Because the entire premise of democracy is about the consent of the governed. That's actual legitimating, underpinning principle. And insofar as 49% did not consent to the current president or prime minister or whatever, say presidential system, first past the post, okay? Insofar as 49% did not consent or in a prime minister system, it could be like 60% or more didn't consent to the current leader. Those folks are having something imposed on them that they literally did not vote for. Moreover, campaign promises are non binding, so whatever they voted for, they can effectively be defrauded. The actual voter fraud is when a politician promises X but does not do it. It's as if you bought a can of orange juice and it actually drink it. It's milk or it's nothing, right? So all of that is routinized, all of that is accepted. We have this thing which is just the minimum possible amount of democracy of 51%. Okay? And what happens is then that 50% tries to ram something down the 49%'s throat and then the next election it's now 51, 49 the other way and then they ram it back. And that's how you get the seesaw that is just splitting countries apart. Right? The alternative to that is you build a consensus online. You go and get some godforsaken patch of territory. Actually, the worse the territory, the better. Why? Because it's like Burning Man. Nobody cares. The nicer the piece of land, the more people are going to argue about it. But Starlink has repriced the world. Basically all kinds of pieces of territory that were previously. They're far away from natural ports, they're far away from natural resources. All kinds of pieces of territory around the world now have satellite Internet. And so what you can do is again, the map is being reopened, right? We were talking about earlier, the map is being reopened. You can gather your community online. They're now capable of collective action. You can point here. This place has great Starlink coverage. You go there like the Verizon guy, you know. Can you hear me now? Good, right? You see that the coverage is good there. You drive out there, you test it out. Maybe you do it with mobile homes first, right? This by the way, is its own thing. There's Yimby and there's, there's Nimby and there's Yimby, but I actually also like Himby. Okay, let's go.

Nimby, Yimby, Himby. What are Those.

So NIMBY is not in my backyard, don't build in cities. YIMBY is. Let's build high density buildings, really tall buildings and so on in cities. There's a third version which is Himby. It's my little coinage which is horizontal sprawl is good. Why horizontal sprawl? Because to build a skyscraper, to build a tall building in a city, you have this enormous permitting process, all of this stuff which has to get done. It's expensive, it's time consuming. The way that cities were built. If you go Back to the V1, what does the startup city look like? It looks like something like Burning Man. It looks like the cities of the Wild West. They were not multi story buildings, right? They were basically things that were just like one story and someone could have it there in the dust. And then you build roads and stuff between them, they can move them around. It was a much more dynamic geography. And so when you have that as a vision of what a startup city looks like, right now you've got something. There's a company, I found it called Kift, which is like Van Life. There's a lot of stuff in construction that makes this feasible. There's so called man camps for fracking where people can just do companies like Aggreko, they provide power, you can bring water, all this stuff on site. So it's easy to actually snap this stuff to grid, relatively speaking. If you've got horizontal space, you pick this space you crowd from the territory. Now you've got a city. Okay, and the last bit is eventually gains diplomatic recognition from pre existing states. And this is the part that people, you know, different people will be with me up to this point. And then they'll say, okay, that's a part I disagree with or how are you going to ever do that? Right? They'll say, yeah, you can build an online community, I believe you can get them to do collective action. And of course people have crowdfunded land and moved in together. You're doing it at a larger scale. All that I believe. How are you possibly ever going to gain diplomatic recognition of pre existing states, you dumb delusional tech bro. Right? That's a common thing. Okay, that's about the tone of it as well. Right. And so first I would say sovereigns are already out for business. They're inking deals. Okay? Nevada inked a deal with Tesla to build the Gigafactory. El Salvador has Bitcoin as its national currency. Wyoming has done the Dow law where Ethereum is now recognized, where you can have on chain incorporations that are recognized by Wyoming law. Virginia and New York negotiate with Amazon for HQ2. Tuvalu signed a deal with GoDaddy for the TV domain. Colombia signed a deal for the CO domain and on and on and on. Sovereigns are open for business. Sovereigns are doing deals with companies and with currencies. Sovereigns at the level of cities like Miami or New York where the mayors are accepting their, their salary in bitcoin states like you know, Wyoming or Nevada has its new private cities legislation or entire countries like El Salvador.

So when you say sovereigns by the way, you mean the old school physical nation states, governments, fiat states, fiat states.

Okay, but.

But the fiat isn't the thing that makes a state. What makes a state is geographical location.

It is is something where they're both right. So basically it's a play on words. So just like fiat currency is cryptocurrency, we will have fiat country and crypto country. Right. And in fact you can think of the fiat and crypto version of almost anything. One thing I'll come to later is a big thing. The big thing I think comes after digital currency is digital passports. Okay so and that's a big part of this, this whole networking thing which we can come back to. But so that last bit, the reason I just mentioned, all those deals between sovereigns whether at the city, US state or UN listed country level. Okay. And on the other hand, so that's on one side of the market, on the other side are the companies and the currencies. Why could we not have online communities? Right?

So let me making those deals. So diplomatic recognition. But are, aren't you still attached to the responsibilities that come from being a member of a sovereign old school nation state? So can you possibly escape that?

So yes. And let me give you a concrete example. Israel. Okay. Why you know, people talk about, you know, a lot of people are like oh, biology just he took this from Snow Crash or some sci fi book they'll reference. And actually if there's many different references to the book, this is not the only reference, but a very important reference that I think is much more important to me than Snow Crash, which is, which is good, good book, whatever, but it's fictional. Is Geat by Theodor Herzl which translates as the Jewish state. And that led to the foundation of Israel. And that's very real. It's worth reading because it's amazing. Theodor Herzl was like a tech founder. Okay. In the book he was writing about the death of distance in 1897. Why? Because steamships could take you across countries. And he's just amazingly smart and practical guy where he just handled all these various objections, and he said, look, the Jewish people, our choices are either A, assimilate, give up the culture, or B, some people are thinking communism is a good idea. I disagree with that. We should do, C, build our own country. And that was considered totally crazy. What he did was he, A, wrote a book, B, started a fund, C, organized a semiannual conference, the World Zionist Congress, and the fund and the congress are still going today. Crucially, there were a bunch of intermediate stages between the book and the idea and then the actual state of Israel in 1947, for example, folks who were committed Zionists got together and started crowdfunding territory in what is now Palestine. And in fact, though Palestine was only one choice in the book, they also had Argentina as a choice. So this is my concept, Cloud first, land last, and land's a parameter. You can choose other places that were considered at various points, like Madagascar, Birobidzin, in the former Soviet Union.

Right.

So the land was a parameter. Palestine went out because of its historical religious importance. Now, by the way, one thing I'm sure some fraction of viewers are gonna be like, oh, my God, like all the bad stuff that happened. I'm obviously not denying that there's enormous amounts of controversy and so on that attends Israel. I consider myself generally pro Israeli. I'd also consider myself pro Palestinian. I fund lots of Palestinians and so forth. So I'm leaving that part out, that huge conflict or, you know, for. For now. Okay. And you might say that's airbrushing it. I don't mean it to do that. I'm saying, here is the positive things they did. Can we take the positive and not have the negative? And I'll come back to how we. We. We might swap those parts out. But let me just talk about this a little bit more. So one of the things that happened was committed Zionists went in crowdfunded territory in what is now Israel, and they knit it together. Right. Why? Because when you're physically present on territory, yes, in theory, like the British Empire was in control. They were the sovereign. Okay. In practice, who were the boots on the ground? The facts on the ground, Right. These are people who are actually tilling the land and building the buildings and so and so forth, like, who had the claim. There is, like, the people who are present. Okay. Now, this. This territory, this network of territories eventually became the basis for or part of the basis for what became Israel. Now, I'M fully aware that the exact configuration of what territory belongs to Israel, what territory belongs to Palestinians. This is an enormous topic of dispute. Okay. But I just point this out to say the process of going from book to crowdfunding territory to a sovereign state where people were now citizens of Israel as opposed to the British Empire, is not some fictional thing, but did happen. And within the lifetimes of some of the older, you know, they're in their 80s now, but in the lifetimes of some older people. Okay, so. So it's not impossible. In fact, it has happened. Right, okay.

But for that step, then perhaps, hopefully is a better example, because in this particular, like you said, land last. If I were to sort of, it was. If I was an alien and arrived at Earth and say, choice of land, maybe if you were interested in create, choosing a land that represents a network state, where ideas that unites a people based on ideas, maybe pick a land that doesn't lead to generational conflict and war.

So I'll get to that.

And destruction and suffering and all that.

All this stuff. That's right. So now that I've said, what are the positive things about Israel? And I think there's a lot to admire in Israel, as I said, I think there's also a lot to admire in the Palestinians and so on. I'm not taking any position on that. There's other inspirations for the network state. The second major inspiration is India, which managed to achieve independence nonviolently. Right. That's very important. Right. So can you fuse these things? Right. A state started with a book that achieved independence nonviolently. Okay. And that managed to build this polyglot multicultural democracy that does, you know, like, you know, India has its flaws, but it does manage to have, you know, human rights of lots of people respected and what have you. Right. And has managed to, you know, there were times like Emergency in the 1970s in the IRA, Gandhi declared emergency. There are times when seemed touch and go. But overall, with fits and starts, this flawed thing is kind of made its way through. And you know, the third inspiration is Singapore with Lee Kuan Yew, who built a city state from nothing. You know, I shouldn't say from nothing. Okay. There was something there, but let's say built one of the richest countries in the world without like huge amounts of natural resources in the middle of a zone where there was lots of communist revolution going on. And so he was the CEO, founder essentially of this amazing startup country. Right. And you know, finally, of course, America, which has too many influences to name Things we talk about the nation of emigrants, obviously, the constitution and so on. And you think, okay, can we go? You think of these inspirations. What's interesting about these four countries, by the way, Israel, India, Singapore and the U.S. they have something in common. You know what that is? Who's that? They're all forks of the UK code base, we think. Obviously the UK was sort of the ancestor of America, but Israel was a former British colony. Right. India was a British colony and so is Singapore.

Right. And for people who don't know what fork and code base means, it's language from versioning systems, particularly Git, represented online on a website called GitHub. And a fork means you copy the code and all the changes you make to the code now live in their own little world. So America took the ideas that define the United Kingdom and then forked it by evolving those ideas in a way that didn't affect the original country.

That's right. And what's interesting about this is, of course I'm saying that in a somewhat playful way. Right. But I think it's a useful analogy. Interesting analogy, Right. So you have the Americans who forked the UK code base, and then you have the Indians, Israelis and the Singaporeans who also made their own modifications. And in some ways, each society has pieces that you can take from them and learn from them and try to combine them. Right. So you have a state that is started by a book that non violently assembles, that crowdfunds territory around the world that is led by a CEO founder and that is also governed by something that's like a constitution. But just like you went from. You know, I talk about the v1, v2 and v3 a lot. Right. Like v1 is gold and v2 is fiat, and v3 is bitcoin, or v1 is hunter gatherer and v2 is farmer soldier. V3 is digital nomad, or sovereign collective, which is not just an individual, but a group. Here v1 is UK common law. They don't have a constitution, it's just all precedent going for many years. V2 is the US Constitution and V3 is the Smart contract, the social smart contract, which is a fusion obviously of Rousseau's concept of the social contract and the smart contract. The social smart contract is like written in code. Okay? So it's like even more rigorous in the constitution. And in many ways you can think of going from the United Kingdom of England, Wales, Scotland, Northern Ireland, the United States of America, the network states of the Internet, where you go from the rights of Englishmen with the Magna Carta to Europeans, African Americans, all the immigrants to the, you know, the Americans or the know, North America, then you go to all the people of the world. And so you basically are more democratic and you're more capitalist because you're talking about Internet capitalism, not just nation state lock capitalism. In a sense it's the V3. Right. Another way, it's the V3. Only about 2% of the world is over 35 native born American can qualify to be president of the United States. But 100% of the world, you could become the president of a network state. There might be a Palestinian Washington or a Brazilian Hamilton. And now rather than say, okay, maybe you have a small percentage chance of immigrating to the US and a small percentage chance of your descendant becoming president, now we can just say, you can start online. And you know what, maybe this person is so exceptional they have Americans coming to their, you know, network state. Right.

You don't think that kind of thing is possible with like the rich get richer in a digital space too. The people with more followers have friends that have followers and they like.

I don't think it's the rich get richer. I think what happens is. So this is an important concept. It is, it's multiaxis. Right. That is to say, for example, just the introduction of the Bitcoin axis. Right. And those. Because it didn't exist pre 2009, now it exists. Those people who are rich in BTC terms are only partially correlated with those who are rich in USD terms. There's all these folks.

Essentially BTC is Bitcoin and USD is US dollar.

Yes. So that's a new axis and ETH is yet another axis.

Right. Ethereum. ETH is ethereum.

Right. So you are essentially getting new social systems which are actually net inequality decreasing because before you only had USD millionaires and now you have a new track and then another track and another track. Right. You have different hierarchies, different ladders, and so on net you have more ladders to climb. And so it's not the rich getting richer. In fact, old money in some ways is the last to cryptocurrency. Old money and old states. I think those people who are the most focused on you might call it reform, I would call it control. Okay. The most focused on control of the old world who have the least incentive to switch, the rich will get poorer because it will be the poor or those who are politically powerless, politically poor, who go and seek out these new states.

Yeah, I didn't mean in the actual Money. But yes. Okay. There's other ladders. I meant in terms of influence, political and social influence in these new networks states. You. You, I think said that basically anybody can become president of a network state.

Just like anybody can become CEO of a startup company. Of course, whether people follow you is another matter. But anybody can go and found one. Go ahead. Sorry.

Oh, from the perspective that anyone can found one. Anyone could found. I see.

We don't think it's implausible that you know, somebody from Brazil or Niger, I mean, most, quote, billionaires in the world are not American. And in fact, actually, here's another important point. It's far easier to become a tech billionaire than to become or a billionaire, period, than become president of the United States. There's less than 50 US presidents ever. All time. Okay. It is a much more realistic ambition to become a billionaire than to become president. There's like thousands of billionaires worldwide. In fact, 75% of them are outside of the US and many of those have been, you know, some of them are like energy and oil, which is often based on political connections, but a very large chunk of the rest are tech. Okay. And that's something where you're mining, but you're mining online by hitting keys as opposed to with a pickaxe in granite.

Right.

So the point is that we think it's totally understandable today for there to be a huge founder who comes out of Vietnam or South America. You can name founders from all over the world. Exceptional people can rise from all over the world to run giant companies. Why can they not rise to run giant new countries? And the answer is we didn't develop the mechanism yet. And just as another example, I talk about this in the book. Vitalik Buterin is far more qualified than Jerome Powell or anybody at the Federal Reserve. He actually built and managed a monetary policy and a currency from scratch as a 20 something. Obviously that's a more accomplished person than somebody who just inherited an economy. This is.

A lot of people can push back at that and say that the. The people that initially build a thing aren't necessarily the best ones to manage a thing once it scales and actually has impact sometimes.

Sometimes. But Yusuke has done a good job of both. I think Vitalik has done a good job of both.

Right. That's not an inherent truth.

Well, so actually if you built the.

Thing, you will be the best person to run it.

I will agree with you on that. And actually I talk about this in the book or I've got an essay on this called Founding versus Inheriting. Okay. And the premise is actually that the classic example, you know the saying shirt sleeves to shirt sleeves in three generations. It means the guy who starts out poor and builds a fortune, his son maintains it and his dissipate grandson dissipates it. Right.

Why is shirt sleeves a symbol of poverty?

Well, back in the past it was kind of like, you know, you're just working with your. You're not, you're not white collar, you're back to working with your hands.

You're just, oh, it's a blue collar to blue collar.

And three generations. Yeah, yeah. Or working class or something like that.

Right.

So essentially the grandson squanders it. And in sense, by the way, just to talk about that for a second, if you have two children and four grandchildren and eight great grandchildren and 16 and so on, and an older family, they were much bigger. Six children is not uncommon. Whatever fortune you have is now split six ways and then six ways and six ways again. So with the exception of primogeniture, where the oldest son inherits all the way down, the majority of descendants just a few generations out have probably inherited none of that fortune. Unless it has compound to such an extent that it's like up 6x over 20 years. Right. So it's actually hard to maintain a ruling class in the sense that this person who's like four generations down has 1/16 of the DNA 1 over 2 to the 4th right of their scion who built a fortune. So it's not even the same. Is, is it the same family even? Right. Is the fortune actually in the family? So most people don't think a few generations out, they just kind of think, oh, Marx is right. There's always been a rich and a poor. It's actually much more dynamic than that because you literally like what is even the family when it's diluted out, you know, 1 16th. Right. If you're 1 16th Rockefeller, are you a Rockefeller really like 15, 16, something else. Would you have the Rockefeller fortune? Probably not right now. Are there again, primogeniture, where the guy who inherits the name all the way through, that would be one way to pass it down. But even that person doesn't necessarily have the qualities of the guy who, the cultural qualities, other qualities, guy who's like four generations past, they tend to squander it. So this actually brings us to coming back up to governance the system. The guys who built the United States, like Washington and Hamilton, these are giants, these are founders. And the folks today are like not the grandson, but like the 40th generation heir of a factory that somebody else built. Like, think about a factory and you have, you know, this grandchild or great grandchild inherits a factory. Most of the time it's just cranking out widgets and the great grandson is cashing checks. They have been selected as legitimate heir because it's the, you know, the founder passes it down to his son, passed down to his grandson to his great grandson. So legitimacy is there. They've got title. They can show I own this factory, okay? They can cash the checks. There's professional managers there. Everything seems fine. Until one day that factory has to go from making, you know, widgets to making masks for Covid or something else. It has to change direction. It has to do something it hasn't done before. None of that capability for invention and reinvention is present anymore. These people have inherited something that they could not build from scratch. Because they could not build from scratch, they can't even maintain it. This is an important point. The ability to build from scratch is so important, because if some part breaks and you don't know why it was there, can you even maintain it? No, you can't. Okay? Unless all the replacement parts and the know how to fit them together is there, you can't repair this. So in 2009, Mother Jones had a story that said that the US military had forgotten how to make some kinds of nuclear weapons because there was a part where all the guys who knew how to make it had, like, aged out or left. Okay. And this was some, like, aerogel or something like that. It was rumored. Okay. Thing is, you're seeing increasingly, for example, you've got wildfires in California. You've got water that's not potable in Jackson, you've got power outages in Texas. You're seeing a lot of the infrastructure of the US Is just less functional. I think probably part of that is due to civil engineering not being that sexy afield. People aging out and just domain knowledge being lost. And the heirs who win the role of mayor or whatever of this town don't have the ability to build it from scratch. You're just selected for legitimacy, not competence. So once you think about this concept of founding versus inheriting, and I've got the whole essay which talks about this, of course, the alternative to somebody who's legitimate but not competent, what people will say is, oh, we need an authoritarian to be in control of everything. And then their hope is that that person is competent, but they don't have legitimacy, because if they're just Installed as just like an authoritarian ruler. 50% of the population is really mad at them. They don't have title, they just grab the title. Maybe they can exert enough force. That's the problem with the authoritarian dictator takeover. So the alternative, the third version is the founder, who combines both legitimacy and competence, because they start from scratch and they attract people to their vision, and they build it from scratch. And so you need is the ability to constantly do re foundings, rebirths.

So if you imagine a world that is primarily network states, can you help me imagine what that looks like? Now? There's several ways to imagine things, which is how many of them are there and how often do the nuance pop up? There could be thousands given 7 billion people, 8 billion people on Earth.

Yeah. So there's network state in the precise definition I have in the book, which is a diplomatically recognized entity, and there's network state in sort of the loose definition, where one thing that's interesting is this term has become a lowercase term really fast. Okay, network state. Yeah. Like in the sense of Google became lowercase Google for Googling, or like Uber became lowercase Uber. Like, if you go to thenetworkstate.com reviews or you go to search.twitter.com and put in network state, you'll see it's just become like a word or a phrase. Okay, so that means it's sort of whatever I intend it to mean. People will use it to mean what they want it to mean. Right. Okay. It's Internet. Right.

You've become a meme. Well, first of all, you're a meme, and this book is a meme.

Am I a meme? Okay, maybe I'm a meme. But the book is. I think it's a good meme. That's actually why I wanted to make it free. I wanted people to take it out there, make it their own. And one of the things I say at the beginning, and I'll come back to this thing, is it's a toolbox, not a manifesto. Even if you dislike 70% of it, 80% of it, 90% of it, if there's something that's useful to you, you can take that and use it just like a library, a software library. You might just use one function there. Great. I'm glad I've delivered you some value. That's my purpose in this.

So you're not Ayn Rand?

No, I'm not Ayn Rand. Basically, the whole point of this actually is it's polytheistic, poly statistic, polynomistic. Is genuinely.

Is it polyamorous?

It's not polyamorous. Okay. Though somebody might.

Do you have love advice in the book? I didn't, I didn't see it. So did you talk about love in.

I do not talk about love.

Rather maybe in V2. You will.

Not that I don't believe in love. Love is great. All right.

I will accept your offer to write a guest chapter in your V2 book about love.

All right, great.

Because there is some aspect that's very interesting which parts of human civilization require physical contact. Physical. Because it seems like more and more can be done in the digital space.

Yeah, but as I said, work for example, but you're not going to build a self driving car city in digital space. You're not going to be able to.

Do oh, why cars at all?

Well, you. Well, so sure. But let's say you're not going to be able to get to Mars in a purely digital thing. You need to build, you know, you have to have a little rocket launch pad. You're not going to be able to do all the innovative biomedicine, whether it's, you know, all the, you know, have you seen bioelectricity? Or there's. There's stuff on regenerative medicine, stem cells, all this stuff. You, you just can't do that digitally. Right. We're still physical beings, you know, so you need physical space. But how do we get that right? So that this is, this is meant to wend its way through various roadblocks in the so called. You know, actually my term from many years ago, the idea maze. It's meant to wend its way through the idea maze to find how to use bits to re. Unlock. Unlock innovation atoms.

The idea maze within the bigger prime number maze. Or go back to visualizing the number of states and how often are they born.

So let me first, let me first anchor this because people just to give some numbers, right. How many UN listed countries are there? Like 196, 193. Okay. And there's some that are on the border like Taiwan or Israel. Right. Where they're not. I mean Israel is a country but it's not recognized by every country or what have you. Right.

Is Texas a country?

No, but it may eventually become.

Right.

Okay. So within that list of about 200 countries. Okay. I've got a graph in the book that shows that most countries are actually small countries. There's 12 countries that have less than 100,000 people by the UN definition of a country. There's another 20 something that have between 100,000 and 1 million. There's another 50 or 60 something that have between a million and 10 million. So most countries in the UN are less than 10 million people. There's only 14 countries that are over 100 million people. Okay, so most countries are small countries is kind of surprising to us because most people live in big countries. Okay. And so now you're like, okay, well, I've built social networks that are bigger than that. You have a following that's bigger than 100,000 people. You have a following that's bigger than a small country like Kiribati or what have you.

Right.

And okay, so that first changes feasibility. You think of a country as this huge, huge, huge thing, but it's actually smaller than many countries are smaller than social networks that you've built. Okay, Number one. Number two is the number of UN listed countries, even though it's been flat ish for the last 30 years, with a few things like South Sudan and East Timor that have come online. There's a graph that I posted which shows that it's increased from about 40 or 50 something at the end of World War II when the Union was set up to 190 something today. There's been kind of a steady increase in particular with all the decolonization, all the countries that got their independence first from the British Empire and then from the Soviet Empire. Right. That imperial breakup led to new countries. Okay. And then the question is, is that flat forever? Well, the number of new currencies similarly increased for a while, roughly one per country or thereabouts. And then it was flat for a while, and then suddenly it's gone completely vertical. That's an interesting graph, right? Where it's like linear ish, then it's flat, and then it just goes like this. Now you can define, you can, you can argue where the boundary is for a new currency. Okay. But I think Bitcoin certainly counts. I think Ethereum certainly counts in terms of just its scale and adoption worldwide. So at least you have two. If you take the broad church view, you have a thousand or something like that.

Right.

Somewhere in between, you might say how many currencies are above the market cap of an existing, previously recognized fiat currency. Like, which got onto the leaderboard. Right. There's a website just like coinmarketcap.com that's like a site for like, cryptocurrency. Tracking is very popular. Okay. There's a fun site called fiatmarketcap.com, which shows where Bitcoin is relative to the fiat currencies of the world. And it's like last I checked, number 27, somewhere in between the Chilean peso and the Turkish lira or something. And it had previously been close to cracking the top 10. And I think it will again at some point. So we know that you can have a currency out of nowhere that ranks with the fiat currencies of the world. Could you have a country out of nowhere that ranks with the countries of the world? So this is, this is maybe the fastest way. You probably should have said this at the very beginning. If you go to the network state in one image, okay, that kind of summarizes what a network state looks like in a visual, just one single visual. And the visual is of a dashboard. And the dashboard shows something that looks like a social network, except you're visualizing it on the map of the world. And it's got network nodes all over the place. 100 people here, 1,000 people there. They're all connected together. And the total population of the people in this social network is about 1 million people. So 1.7 million people in this example. And some of the buildings are, some of the people are just singletons, they're just folks in their apartment who conceptualize themselves as citizens of this network state. And they've got the flag on their wall, right? And the digital passport on their phone along with the digital currency. Others are groups of hundreds or thousands or even tens of thousands of people that have all taken over a neighborhood. Just like Chinatowns exist, just like intentional communities existed, they just basically go and crowdfund land together, right? And these are all networked together. Just like the islands of Indonesia are separated by ocean, these are islands of this network state that are separated by Internet, okay? So they conceptualize themselves as something. And at the very top of the dashboard there's something very important which is the population, annual income and real estate footprint of this network state. So population we already discussed, you can build an online social network, we know you can build something which has a population that's bigger than these hundred thousand or million person countries. One of the new things, contributions that Networks 8 has is say that you can not just exceed in population, you can exceed it in real estate footprint. Because one way of thinking about it is I don't exactly know the numbers on foreign ownership in Estonia, but let's say to first order the million something Estonians own and could afford Estonia, okay? A million people could buy a territory that is the size of Estonia, right? That's probably true to for sure there might be some overseas Ownership, but it's probably true, okay? You probably find a country for which that's true. What that means is a million people digitally could buy distributed territory that is probably greater than or equal to the size of Estonia, especially if they're buying like desert territory or stuff like that. Which means now you have a digital country that is ranking not just in people, not just in real estate footprint, you know, so, so it's also in real estate footprint with the, with the, with the countries of the world. So you start ranking and you're bigger than these UN listed countries in your population and your real estate footprint. And the third is income. Okay? You can prove on chain that you have a income for the, for the digital population that is above a certain amount. Right? This is what I call the census of the network state. And it's actually such a crucial component that I have it in, you know, the essay. The network saying a thousand words. The post office and census were actually important enough to be written into the US Constitution. Okay? Partly because it was like for apportionment of representatives, partly because it was a feedback mechanism. And so that census was done every 10 years, and it's provided a crucial snapshot of the US for the last several hundred years. Okay? Now here, this census of a digital state could be done every 10 seconds. Okay? Conducting it is actually not the hard part. You know what the hard part is proving it. Because how will the world believe that you actually have 100,000 people spread across countries? Couldn't they all be bots? Could they be AI's proof of human, proof of income and also proof of real estate start to actually rise dramatically in importance because you're saying we're going to rank this digital state on the leaderboard of the, the fiat states. Okay? And so that means that people will start to. Yeah, first they'll just laugh at it. Once you start claiming you have 10,000 citizens, people are going to start poking and be like, is that real? Prove that it's real. Okay, so I have a whole talk on this, actually, I'm giving at this chainlink conference. But essentially, how do you prove this? Right? The short answer is crypto oracles plus auditing. The somewhat longer answer is you put these assertions on chain, these proof of human, these proof of real estate, et cetera, assertions on chain, okay? And there's people who are writing to the blockchain and they are digitally signing their assertions. Now, of course, simply just putting something on chain doesn't make it true. It just says you can prove not that what is written on chain is true, but that the metadata is true. You can show who wrote it via their digital signature, what they wrote their hash, and when they wrote their timestamp. So you can establish those things in metadata of who, what and when was.

Who's the who in that picture. So, for example, how do you know it's one human.

Great question. So let's say you've bought a bunch of your pieces of territory from Blackstone, okay? As a function of that, Blackstone eth signs an on chain receipt that says this Lex Friedman e bought this piece of property from us. And. And it has, you know, like it's a thousand square meters. And this is put on chain. They sign it. Okay? That's a. That's their digital receipt. Just like you might get an email receipt when you buy a piece of property or something, okay. You just put, not online, but on chain, and it's signed by Blackstone or whatever real estate vendor you buy it from. It could be a company, it could obviously be an individual, right? And so you have a bunch of these assertions. Let's say there's 47 different real estate vendors. I know vendors, an atypical term there, but just bear with me, right? 47 different real estate sellers that you've bought all of your territory from. Each of them put digital signatures that are asserting that a certain amount of real estate was bought and it's square meters, its location, or whatever else they want to prove. The sum of all that is now your real estate footprint. Okay? And now the question is, was that real? Well, because they signed what they put on chain, you can do things like you can audit.