Balaji Srinivasan | The Network State | Renegade Futurism 2025

Welcome everyone this evening. My name is Ben Teitelbaum. I'm a professor here at the University of Colorado. I'm one of the co organizers of this conference, Renegade Futurism, together with Paul De Duc. And it is our pleasure to welcome our final event of this two day conference. Our keynote speaker, Balaji Srinivasan Balaji. Many things could be said about this guest. He's an entrepreneur. He is an entrepreneur who is focused especially on cryptocurrency. Former CTO of Coinbase and also former general partner of Andreessen Horowitz. But the reason we're most interested in speaking to biology today has to do with a book that he wrote, the Network how to Start a New country, as well as a movement that encompasses now a school and also multiple sites throughout the world. With that very, very brief introduction, I'd like to ask you all to jo in welcoming our keynote speaker, Balji Srinivasan.

Balaji.

I'll turn things over to you.

All right, well let me give a quick talk on my little worldview here and why I think we've started new currencies and we're going to be able to start new countries. And then maybe I can take take some questions after the, after the quick talk. Okay, so three premises. Starting new countries is now possible. I'll explain why I think that's possible now and what I think is coming next. So first, why would starting new countries even be possible? Right. So as you mentioned with the kind introduction, I did write this book@thenetworkstate.com this is theory. It actually came out before AI or before modern AI and in July 2022, so only less than three years ago. But things have moved very fast since then. And I've been putting these, this theory into practice by actually starting a node of a network society and many others have started nodes as well. But I want to go into a little bit kind of the lightning version of what that theory is. Why do I think starting new countries is possible, preferable and profitable. So let me start with the first, which is why I think it's possible. So are new countries even possible? Well, we know that within our lifetimes or most of people's lifetimes here, we'd be able to start new companies like Google out of a garage. We'd be able to start new multi billion person communities like Facebook out of a dorm room. And we'd be able to be able to start trillion dollar currencies like Bitcoin from a white paper. So massive global things have risen from extremely modest beginnings. A garage, a dorm room, a white paper. Is it possible for us to start not just new companies, currencies, communities, but new countries? And that's a principle, the concept of the network state. And a network state is actually a very concrete thing. Here's a visual of what one looks like. You can think about it in the following way. If Bitcoin is a decentralized currency, a network state is a decentralized country. It's essentially a physical social network with the nodes spread all over the world, but the people all sort of wired together by the Internet. And here is a visual of a network state with 1,729,314 people and a annual income and real estate footprint that is comparable to or greater than the population and income and size in territory of the legacy states of the world. The key innovation is that it's everywhere rather than in one place. Similar to how, you know, Bitcoin data centers are everywhere, or Google offices are everywhere, or Hiltons are everywhere, or Starbucks are everywhere. We already have existing structures that are like this in certain ways. The multinational corporation, the cryptocurrency, the tech, you know, office and so on and so forth. The social network. And each of those are a different layer of this. But no one's kind of combined all them together, the residential and the commercial and the digital space into kind of one full stack thing. But we could.

Balaji, I'm so sorry to interrupt. Just to make sure. You haven't been advancing slides, have you?

I have. I have been advancing slides. You can't see them?

No, we are not seeing any slides advance.

All right.

Unfortunately.

How about now? Let me see now? Yes. No, do you see the slides?

I see your presentation.

Now you see them. Okay, thanks for saying something. Okay, great. So starting new countries are possible. Why now? What next? So fortunately, you just saw the first slide, so thank you for saying something. So are new countries even possible? This was the one which is Google, Facebook, Bitcoin networks, chains. Okay, do you see that one? Yeah. Yes. Do you see this slide?

Yes.

Okay, great. Okay, great. And here is a visual of what a network state looks like. Okay, all right, all right. So now how do we get to 1 million people? This is what a million person network state looks like with 1,729,314 people. Okay. And it's distributed around the world. It's a physical social network. Okay. And so this is what it looks like. But how would we get up there? How do we get to a million people? Right. So Just like Facebook, you could start in one country, right? You could start in Japan, for example. One person, okay? This is out of a dorm room, and then you go to 17 people and then 172 people, and then 1,729, 17,000. And what you're doing is you're basically having this social network grow around the world, and people are crowdfunding territory in person, of increasing complexity. So these 2,000 people can fund basically between them, essentially a local suburb or exurb or something like that. Or if they're within a city, they could collectively take over a tower, right? And as you go up to 170,000 and certainly 1.7 million, you have something that started from just one person. Just like Facebook in a dorm room, just like Google from Stanford and gets all the way up to this, right? And actually, this is small for a social network. There's social networks that are 1000x this size. Okay? So this is actually something which. There's nothing that's physically infeasible about what I'm proposing in this visual. Okay? So you might say, well, why does. Why is 1 million a magic number? Why does that put us within country range? Aren't countries bigger and stronger than that? Biology. Okay? And so my. My next point is actually most countries are small countries. So the majority of countries in the United nations have actually less than 10 million people. Okay. The majority of them have less than 10 million citizens. And UN membership has actually grown over time. This is a very important graph that violates most people's mental model of the world. Most people think the number of countries has basically been constant for a long time. Actually, it's grown almost 4x since the end of World War II. And that's because these various empires broke down. The British Empire, the French Empire, and then with this bump over here, the Soviet Empire. Right? And so, yeah, it's been mostly flat ish for the last 30 years, but then so was the creation of new currencies, and of course, that went vertical. So most countries are small countries. UN membership has grown over time, and cryptocurrencies rank with fiat currencies. So this is a Fun website called fiatmarketcap.com and these cryptocurrencies are now at a scale that ranks with fiat currencies. And so the reason this is interesting is if you look here at this point of the screenshot, Bitcoin was in between the Turkish lira and the Chilean peso. It's bigger than that now, right. If you put these principles together, Let me see if I can zoom in also a little bit more. All right, it's fine. Could crypto countries rank with fiat countries? Okay, so if you take this table of the countries of the world, the UN members of the world, right. And they're ranked by their population. You could also rank them by their real estate or something else. Could you have a network state rank with the nations of the world between Lafayette and Bahrain, with 1,729,314 people, just like bitcoin, a cryptocurrency ranked with the countries of the world. Could a network state, a crypto country rank with the nations of the world? Right, I think you could. And this is between two countries that are very much real countries that are at the UN that have flags and they're at the Olympics and so on and so forth. And one other thing here, you'll notice that I've put this as one of the fastest growing, if not the fastest growing country in the world, because the network state can grow by immigration and reproduction. So you have a leaderboard here. And so all these type A personalities want to rank on the leaderboard, so might have very high fertility rate as well. Right, There we go. We solved the fertility problem too. And so, and this actually, the, the, the leaderboard here maps the dashboard I previously showed. And there's a bunch of things that go into this. For example, in crypto, there's a concept called proof of human. And so you can imagine that this number over here is the sum of a bunch of 01 proofs of human. And you do like a million, and you're establishing each one of these as an individual, like Vitalik Eth or Raj Sol. There's basically crypto usernames that you can use to prove someone's an actual human. So you can't just claim a number. Many, many different technical tools go into this. But at a high level, this is how you'd conduct a census and a map that shows that you actually do have this scale of population. So this is how, this is a mechanism for how you could build a population, income and real estate footprint that ranks with existing, let's call them fiat countries. Right. And then once you've got that, as you get that with sufficient traction, you can get diplomatic recognition. And why do I say that? Well, we know that, for example, the, the with. With something like Tuvalu Godaddy, a company was able to negotiate the TV domain name or domain extension. We know that Nevada did a deal with Tesla, so accompanied a deal for this gigafactory we know that El Salvador did in a sense a deal with Bitcoin or cryptocurrency. And there's many more deals like this, like.co for for Columbia and Amazon HQ2. And many countries obviously have done things with ethereum daos and you know, there's a Dow law also within the US at Wyoming. So the point is the land is already negotiating with the cloud. The land, meaning the states, the cities, already thinks about Internet companies, Internet currencies as being something that is of a scale that they would ink deals with. We already see sovereigns in these kinds of deals. So it's not too much of a stretch to think that a crypto community that has sufficient capital and real estate and importantly social clout as well as dual citizens in a sense where for example, there are Bitcoin Americans and Bitcoin El Salvadorans, just like there are Catholic Americans. Right. That's something where there's like a cloud thing which is sort of your religion or your network, and then there's a state thing which is like your nationality. These are like sort of dual things. Right. The land is already negotiating with the cloud. And I think it's not too much of a stretch to think that a crypto community could negotiate, for example, a special economic zone or a peninsula or an island or something along those lines, with a capital investment and friendly enough relations with one of the almost 200 sovereign entities around the world. And of course, it doesn't even have to be like at the level of a country, it could be at the level of city or a county. And you don't need full sovereignty. Even just being able to build your own roads at like a town level, like an incorporated town within the US could work. And many countries actually have a mechanism for turning bare land into towns, including the U.S. right. Okay. So that's why I think starting new countries is possible, preferable and profitable. And importantly, this is an incremental peaceful way that just leverages the existing tech stack we have with the Internet. It's using chat, it's using crowdfunding, it's using crypto and video conferencing and all the things we've built over the last 20 something years. It's not the paths of winning a revolution or winning a war. It's not the paths of space travel or even seasteading. It's basically, in a sense, it's not virtual reality either. It's physical reality, but it's, it's pragmatic reality. Right, okay. So that's why I think it's possible. Why do you think it's preferable? Well, both a push and a pull. Okay. Many countries around the world, thanks to the hike in US rates or thanks to inflation or both or other kinds of things, they have chaos, right? So that's on screen. That's Sri Lanka. Then there's Venezuela, there's Panama. All kinds of countries around the world have, you know, essentially failed states, riots, things, things breaking down, right? And so powerless people, they, they will still often have the Internet. You know, the Internet is built to resist a nuclear attack. So even in the middle of a riot, people have these smartphones which are cheap and incredibly robust, and they can then post a video and they get back to a 5G network. So the Internet stays up when society goes down. So powerless people still have the Internet and they have an alternative to failed states. And on the other side, you have the power user, the ambitious person. They now have an alternative in the form of being able to build frontier societies. Because since the origins of humanity, we've sought out new frontiers, from moving out of Africa to the Statue of Liberty to planting the flag on the moon, right? And this is the crypto coalition as well. It's the powerless and the power user. It's a person who's hanging on to a bank account with their, with their fingers like this. And it's a person who's redefining what a bank account even is, right? That's a crypto coalition. The person in the middle who just thinks everything is fine and they're like, you know, a Canadian and their card works for them. They think they don't need crypto, and then they become, let's say, a Canadian trucker, and then they're, you know, unbanked or deep platform. And then they might need crypto after all, right? And so the more like stable and middle class and so on your world is, and you know, if you like your country, you can keep it. Lol. Okay? If you know the reference, then you're fine. But if you're powerless or power user, you might want to pioneer, right? That's why it's profitable. It's preferable. Not for everybody, for those two groups. And last and least, not least. But why is it profitable? Now this is another form of saying possible. It's just saying economically possible, economically feasible. So here's a fun chart of the annual revenue per user of the nation state, social networks and network states of the world, okay? And so on this axis is the number of people, and on this axis is the Annual revenue per user per capita or per capita. And so this, for example, these are the social networks over here. That's Meta, that's WeChat, TikTok, LinkedIn, Snapchat, Sinawevo, which is like Chinese Twitter, Twitter or X, you know, Yelp. And these social networks have between, you know, 100 million or more than a billion people, and they make on the order of tens of dollars per person per year. Say, you know, this is a log scale on both axes. Let's say it's 30 bucks per person per year and 3 billion people, $90 billion per year. Pretty, pretty good. The scale is enormous. Right. But the monetization per person is not that high. Okay, then you've got the small nation states over here, like Estonia, Singapore and so on. And these have like, you know, less than 10 million ish people, maybe 1 to 10 million. But their revenue per user in the form of tax revenue each year is very high. Right. Like tens of thousands of dollars per person per year. Right. And then you have the two superpowers, the US And China. And it's sort of gratifying to have a chart where they're kind of almost Pareto optimal. And these have very high scale and very high monetization per person. And that's why they're kind of, you know, in conflict. And the network states would start out like over here. They'd have, you know, much smaller populations, like, you know, 1 to 10 million. Their, their monetization per person per year might be in the thousand, maybe 10,000 ish range. If they go above, but there's no upper bound. They can get very large and they could get have high monetization per person. If you're taking over essentially all the functions of something that someone's doing each year, you're taking over the rent or you provide a job for them, and so on and so forth. And this is what I call the new SaaS Society as a service. Okay, all right, so that's why I think starting your countries is possible. But why now? And what next? Okay, so why now? Because history is running in reverse. Okay, so first let me explain what I mean by that. Right, there's, and I'll give a bunch of qualitative examples. So lots of things are happening where there's an event that happened in the past and then it's happening today, but in the opposite or mirror image order. For example, Back then in 1890, the Western Frontier closed, but in 1991, the Internet Frontier opened. Right. Back then we had Spanish flu and that was heavily censored. And then Today we had COVID 19 and that was heavily covered. Right. Back then we had the captains of industry, the robber barons, so to speak. And today we have the tech founders, which are both functions of the frontier. The closing of the frontier led to the end of the raw barons, and the opening of the frontier led to the tech zillionaires. Back then, the journalists beat the founders and ushered in the regulatory state. Today the founders are really beating the journos and the regulatory state may be ending. Back then you had the New York Times teaming up with Stalinist Russia versus Ukraine. And today you have the New York Times teaming up with Ukraine versus Russia. Back then you had actually in America that ship goods to China. This is amazing cartoon in the late 1890s that shows Uncle Sam laden with goods. And China is a passive market with a stereotypical portrayal of a Chinese person. And it's like, you know, wanted, you know, four 400, 000 bridges, engines, cars, right? And Uncle Sam is portrayed as a goods manufacturer because they were at that time in China, just a passive market. Today, of course, famously, it's the other way, other way around. And China ships goods to America. Back then you had Russia being the senior partner to China, and here's Stalin and Mao. Today China is a senior partner to Russia. Back then you had a British ancestry man running India. And today you had an industry Indian ancestry man running Britain. Right. And so basically we're seeing history running in reverse qualitatively, but it's also happening quantitatively, fundamentally. One of the most important graphs in the world is this graph which shows that the geocenter of the world, this is from McKinsey, but the data is from a historian that's collected this. The geocenter of the world used to be economically in Eurasia, meaning if you averaged where China and India and the Middle east and Europe were, and of course, you have to extrapolate where the capitals were. These weren't unified entities at that time. Right. But roughly speaking, the economic center, gravity of the world used to be roughly here in Eurasia. And then after the Industrial Revolution, it rocketed out to Europe. And after World War II, you had peak Westernization, peak centralization. America was at the peak and the rest of the world was bombed out and Europe was bombed out and so on and so forth. And since then, since this period of 1950 to 1991, the world has rocketed back towards Asia because it's no, it's more capitalist now. It's not. It's not, you know, naively communist, it's not socialist in India and so on. Vietnam is leveled up. All these countries leveled up. And so this was thousands of years. This was hundreds of years in the septum, now in tens of years, right? So most GDP is now in Asia. So this is a U curve history running in reverse, right? You see that for tax rates, okay? So roughly speaking, that's a U curve for marginal tax rates where you had peak centralization mid century and, and 90% marginal tax rates in America. You see this, you know, people complain about this. They say, oh my God, executive income is increasing. And you know, but while there's, quote, income inequality, there's less power inequality because now you have many CEOs, founders, things like this, who have comparable distribution and resources to heads of state, right? Like who is the number two in Soviet Russia, right? Kirov got killed by Stalin. You know, Trotsky famously got killed. But there are number twos, number threes, number fours in any country that has the tech zillionaires. Right? Here you can see history running in reverse in a different way. The US used to be, for example, 10x Chinese steel production. Now China's tanks, American steel production. Here is history running reverse where the US Used to be highly integrated and it was a unit party. And basically the Blues and Reds essentially voted the same on many issues. And by 2011 it became essentially politically disjoint. And that's true across not just this is the votes in Congress, but you can see the same phenomenon, a totally different data set of social Networks where by 2017, blues and reds were already partitioned on Twitter and fighting every day. And by 2024 they had actually fully disintegrated where Twitter doesn't exist. It's a tower of Twitter, like the Tower of Babel. And you have Gab and X and Truth Social on the right, and you have Blue sky and Macedon and Threads and TikTok and so on on the left, right? So this is the digital secession. It's already happened. After 2020, millions of Republicans basically digitally seceded from the Commons. After 2024, tens of millions of Democrats digitally seceded to places like Blue sky or Threads. And so the, the US has already come apart mentally, and all that remains is for that to be printed out in the physical world. Just like, you know, you make a document and then you print down the physical world, or you order a Uber and then it gets printed out to your door, or you click something on Amazon and it arrives, you do something in the Digital world first. These societies are forming in digital war. First. They don't talk to each other, they don't trade with each other. Democrats and Republicans don't even marry each other. And then that's going to get printed out into the physical world with, with important consequences. So that means we're going to see new countries because the US is basically ideologically, spiritually disintegrating in this way. And this is a multi decade trend. It's not just the Internet this was happening. This trend was even before the Internet. You can see it coming even before 2011 with a time series. And the reason we're going to see new countries is if you remember this graph which showed the number of new countries rising. It was due, as I mentioned, to the breakdown of the British Empire. So all these new countries came and then the French Empire and then this big bump over here is due to the breakdown of the Soviet Empire. But if you go backwards in time, if you go before 1950, if you say, what did this curve look like before 1950? Well, it actually looks like this. It also looks like a U curve because if you go backwards in time, it looks like this is Germany before Bismarck and this is India actually before unification. And it's very fractal. If you zoom in, this is like what a piece of India looked like. And the reason India looked like this, Germany looked like this is. Maps are actually a technology. People didn't organize these communities on the basis of lines on a map like Sykes Picot. They weren't like straight lines like Wyoming and Colorado. Instead, they were organized on the base of community, not geography. And so it made sense at the community level, but not from a top down map level. And this is also, if you graphed what a social network would look like, it would look like this. It would look, it looked fractal. So if you take these and you superimpose them on this graph, you realize, oh, there's a U curve for the number of countries too. So that means if history is running universe, we're going to see a U curve for countries. Right? And that's really surprising because most people don't realize there's more independent states as we go backward in time. And that 1950 was really peak centralization. Basically, if you look at this moment, this moment that everybody thinks of as a natural point in time, that you know, when a, when a high school grad could have, you know, like a, a family and a house and, you know, so on, that's only an American thing. That high school grad was like starving to death or under communism in China or Poland or equivalent PhD is in physics or whatever, the equivalent, we're starving. That level of centralization, Westernization is incredibly hysterically historically operational. And one way of thinking, thinking about it is that there was decentralization in the past, then peak centralization. By the time that Orwell know was writing 1984, these giga states arose and now we're seeing redecentralization. Everybody's waking up as if from a long dream. And visually, you know, that was a technological thing. You went from mass production and, and factories to smartphones or all this, you know, rather than hitting one button for 30 years, you're hitting a different button every second. Right. But it was also a political thing as you went from the unified America, for example, of the 1950s to the ideologically disintegrated America of the modern era. And that's why I think history is running in reverse and that we aren't done re decentralizing because re decentralization is going to result in probably the American empire receding from the world. And actually I did large chunks of this talk before this election. And if the US is pulling back from NATO, if it's pulling back from being abroad, if it's taking the Pat Buchanan concert being a republic rather than empire, then you're going to see the quote, multipolar world. And that may actually be chaos with lots of new jurisdictions arising. And in fact, there's a guy who lived through something very similar, the President of Kazakhstan. And he said if the right of nations to self determination was realized in reality on the entire globe, over 600 states would emerge instead of 193. Of course that would be chaos because he lived through something like this, which was a breakdown of the ussr, but this is going to be perhaps an even more global thing. And so maybe he's right, but maybe we can forge order out of chaos if we at least know it's coming. And maybe that's what's next, right? I'm not saying any of this is desirable. It'd be nice to have the 1990s forever. I liked that period in time, at least for the West. But if it's coming, what's next? Well, there's a book called foundation about how somebody sees the Galactic Empire breaking down and they build a school on the 10,000 galactic kilometers away to try to shorten the duration of collapse and rebuild the empire. That's what I've done. I built something I call network school. And I built in the Singapore, Johor Special Economic Zone. That's where I am right now. And I'm literally right here. And basically we're putting this into practice with the Sharp Society, the Bootstrap Societies, and we're holding a conference on this and we've got a school. And so it's still early, of course, but we started new companies, new communities, new currencies, maybe. Let's give new countries a try. So thank you very much.

Thank you, Balaji. I have questions, of course, but I know that our audience does as well, and I'd like to turn things over to them first. Everyone in the room, if you are close to one of these floating things with a green light, that is a microphone that you can direct your voice to so that Balaji can hear you. Okay, let's try and do this just with raising hands. You are also welcome, by the way, if you scan the QR code at the, at the edges of the room here, you can send me a question and I will, I will read that. Let's start with that email, please.

Thanks, Ben, and thank you. Apology for this really rousing talk. I was interested in your invocation of seasteading because I often hear these kind of lumped into the same category of, like libertarian exit movements. And I wonder if you could articulate some lessons that the contemporary network state or network school movement has drawn from the challenges that seasteading encountered.

Sure. So. So first is I would actually say, you know, I've got a whole other talk on why I think democracy is necessary. Democracy is valuable. And so I wouldn't even characterize what we're doing as really libertarian. That that's one certain point of contact, I think. You know, like Lee Kuan Yew, I'm a pragmatist and I draw from, you know, democracy, from capitalism, from libertarian thought, from progressive thought, and so on and so forth. So like, you know, ufc, mixed martial arts. Right. Sometimes the different tools for different things. And also there's different ethical schools of thought. So that's just like one sort of, you know, point I'd make. But on seasteading particularly, I actually think seasteading already in a sense exists. It's called cruise ships. And so thousands of people actually do live on the high seas, frankly, in luxury. And so that shows it's possible to do so. And you don't need to design entirely new structures. You could start with cruise ships, retrofit them, you know, park them and so on. And cruise ships are an interesting type of network school or network state or startup society. Node the only thing is the activation cost. You'd need to get around a thousand people to coordinate over the Internet to kind of do one of them. And so that's like, one piece of it. So one thing that you want to do is you want to reduce the activation cost and think of them as just one kind of node of a network society. The other other thing is that we have more modern tools built for the Internet. If you think about a spectrum of frontiers, and you have land, the Internet, the sea, and space, you have like, 8 billion people who live on the land. You have maybe 10 people live in space, where the International Space Station is. And maybe you have on the order of 100,000 to a million people on the high seas at any point, if you add up every container ship and military ship and cruise ship and so on and so forth, but you have billions of people on the Internet. And so using the Internet as a sort of intermediate thing, that can let you reopen the physical world. For example, with Starlink, you can add connectivity anywhere. With drones, you can assemble things anywhere. That, to me, seems more incrementally feasible than jumping to the third frontier of the sea, let alone the final frontier of space. So sometimes seeing that incremental step is everything. And that's, I think, why I focus on the Internet first versus sea or space.

Jeff.

Thanks for this. So one, I noticed you're talking about this as a peaceful process, and I thought back to the famous definition of the modern state as having a monopoly on violence. And we often define a state as, you know, something that has an army. If it doesn't have an army, then it's sort of actually a colony of some sort or a vassal state. I mean, Trump is, you know, when he's talking about Canada is like, well, they kind of, you know, it's like, implicitly, because we already kind of do security for them. Like, are they really any. So this, you know, this idea is pretty. Remains pretty current. So I was curious about the role of violence and armies and also. Or whether this is really a kind of renewed version of kind of du commerce of like, you know, the sort of globalization creed that this kind of ultimately kind of commercialized choice will bring about peace on a global scale. And then the second point was, you know, one way to imagine your proposal. And I mean, I've read the book, and, you know, I find it very fascinating to think about the Internet culture. Writer Katherine D. Talks a lot about fandom and. And the idea that sort of everything melts into fandom. And so the Disturbing version of this, though, that comes to mind when I think about this is that what we have are fandom, you know, is the network state, fandoms with armies. Is that what we end up with? Because when I think about online fandoms, you know, united by strong affinities across vast geographic space, and then I think about giving them, you know, access to a military power, maybe that makes me a bit worried, but I'm just curious what you think.

Sure. So several things I could say there. So the first is that it's sort of to discuss military and armies and so on and so forth. One of the reasons I left it out of the first book in extreme detail is it was a catch 22, where if I didn't describe it in great detail, people say, oh, my God, Balaji, you're so naive. You don't understand hard power. Let me explain. I'm not saying you are, but people would be like. And then if I described it in actually the detail I've thought it through, to say, oh, my God, you want to build a drone army. Oh, my God, you're a tech warlord. Oh, my God. Right. So kind of a catch 22. Right. But one thing I'll say about that is that Google and Facebook and especially bitcoin and cryptocurrency have gotten to massive scale without firing a shot. Because the Internet actually is an innovation in reducing the gains from violence, at least violence of a kind that, you know, like the west is used to, like, big armies moving across borders and so on and so forth. You can't. You can't invade Bitcoin. Right. It's meant to be hard to invade. You can't nuke Bitcoin. The Internet is a defensive structure. You can think of it like the Great Wall of China. There's really only two societies, arguably, that take the Internet really seriously, and those are China, which has a great firewall, and crypto, which has the blockchain. Those are defensive structures on the Internet. Right. So when you have innovations in defense or offense, that changes the topology of states, the topology of societies, how they're formed. And the Internet and the blockchain are at that scale where you can actually change how contracts are enforced. They're enforced with a computer property rights, algorithmic monetary policy identity that's issued not with a card, but with cryptography. And so there's an Internet first lens on the world. It's kind of a portmanteau of, like, America first or mobile first, which is something people say in tech, but an Internet first lens on the world that says, actually the digital plane is primary, the physical is secondary. And you can't invade a social network, you can't bomb it. You might not even be able to see it if it's encrypted. Like without the right AR glasses, you wouldn't even be able to tell that this unmarked building has a floating NFT outside that delineates it as a, as part of this secret society. You could have something that's encrypted in physical space and you wouldn't even be able to know that another person was part of another community unless you had the right glasses with the right nft. And so defensive structures have changed due to the Internet. You have invisibility, you have agility, you have cryptography, you have all these things which make it hard for centralized countries to invade. And that will change the literal geography of what we think even a state is. If you look at those fractal communities that I showed, how would you invade something like that? Right? And another way of thinking about it is the Internet radically increases the value of archipelagos. There's a duck billed platypus equivalent that survives to the present day. It's called San Marino. It's actually a little statelet within Italy. And it's a piece of the past that is still in the present that shows what the past actually was. It was these individual city states. But one way of thinking about it is just like we went from physical gold to fiat and now digital gold, which is a version 3.0 that has some of the attributes of both. We're going from city states to nation states to network states. And the network state has attributes of both city state and nation state. It has the smallness, agility of a city state, but as the scale of a nation state. And it's harder to invade than either of these because it's decentralized and globally distributed. It's more like invading a religion. Right? So that's, I think, the innovation on defense that the Internet offers. And again, one way of thinking about that is the Department of Defense in the US actually invented the Internet or funded it to resist a nuclear attack. Right? So the hardest of hard powers and the smartest people who are thinking about it funded the Internet as a defensive structure. So that was a conscious thing from the very beginning to make it survive, that kind of thing. And so when people often say, oh, you don't understand hard power, and they say we have nukes as a trump card, I'm like, yeah, well this was designed to resist Nukes. It was designed to be decentralized in a certain way where you could swing at a ghost and a giant could exhaust their power trying to swat this and that node in the physical world. But, you know, they're. We're agile, right? Move faster, escape things. So that's one. One piece of it. And if you raise the costs of invasion, of violence, and people have to bargain on the Internet, they have to do it via consent now there'll be more scams and spam and all that kind of stuff. True. But you can reduce the payoffs to violence. So that's one piece of it. The other piece, when you said. And to be clear, you know, you might also. One of the things I mentioned in the book, I'm not saying, like, zero. You might have to do deals with cities or countries or states that are already legitimate sovereigns. And. And your crypto community provides the capital and the technology, and they have already the legitimacy to provide the police forces or maybe in military defense. And then that's a great deal, right? You provide the capital, technology, they provide, you know, the police and the island, and a small sovereign and a large community, you know, online community can work together. And it's already happening. Lots of these small countries love crypto because they have a flag, they can change laws. So everywhere from the Marshall Islands, Tuvalu, uae, all these small countries, smart countries, El Salvador, that are not the US or China, they're small, like less than 10 million people. They already love crypto. And so they'll probably love not just cryptocurrencies, but crypto communities. So there's a. There's a deal that you can do the sovereigns, that's number two. So first is the defense of the Internet. Second, the deals you can do with sovereigns. Then to your third point about, you know, oh, is it a fandom with an army? Well, you know, the. The thing about that is there's a bunch of books like Benedict Anderson's Imagined Communities or Invisible Countries that make the argument that nationalism is an imagined thing. I mean, there's a genetic continuity to some extent between. The Japanese may be the most obvious nation in this way, where they have the same genes and the same language and the same history and the same geography all in one place. But there's many other ways of defining a nation that are based on either its common ethnicity or its common language or its common culture or its common geography. And. And the more of those that overlap, you know, the more integrated it is, unless it overlaps, the less integrated it is so there's places like, you know, Belgium or other places like, you know, Ireland that are multi ethnic, for example, or multi, multi religious. Now of course that has troubles in the past or something, but it can also be integrated at times. And so the point is that a fandom with an army is in some sense what many countries are, right? They don't necessarily have genetics in common, they don't necessarily have religion in common, but they have, let's say, belief in common. They are proposition nations. Many of the countries in the Americas, like North and South America, sort of be defined this way. And so you're basically doing it in a sense in software rather than hardware. You're doing it the level of ideology or religious belief or, or constitutional belief or economic union, as opposed to genetic similarity. And even genetic similarity, by the way, drops off, right? Like you have the tribe, you have the family, then you have the tribe, then you have the extended thing and so on. And where you draw those boundaries, I mean, there are hard boundaries in genetic space, like if they've got oceans or mountain ranges, but a lot of soft boundaries. And so the point is that I think a fandom, you know, with the military is actually a way to describe a lot of existing countries. Finally, many existing countries have multiple fandoms within them. And so they're already disintegrating, you know, where, where people have multiple communities within a country. They don't have one nation under God within the US anymore. You've got all these different splintered subcultures, splintered, quote, Native American tribes. And so, so even, you know, more worrisome is when you've got an existing army and then you've got all these fandoms that are all struggling for the keys. That's actually in some ways even more dangerous. So what we're doing is sort of a reunification into groups that have a self consistency. They're not going to be bombing each other's Teslas or shooting each other's CEOs. You'd never do that within your company, within your family, within your community. And we have sort of a rebirth of what civil society looks like, but it starts with the Internet.

So I see that there are more hands in the audience. I want to read a couple questions that have come in through our, through our UR scan. I'm going to ask you two simple questions straightforward here. Biology. How will the network state allocate capital to build infrastructure or to solve social problems? The second is, is joining a network state adversarial to our original birth countries of citizenship Is this meant to be an add on community or to replace our nationality?

Very good question. So let me start with the second one first. Right. So I do think that the next step after digital currency is digital passports. And we're actually kind of already there, right? If you take your Google login, if you take your crypto identity like username eth or username Sol, if you take your SSH keys or API keys, and programmers will know what I'm talking about there. If you take your NFTs, if you take the new digital, you know, ID cards, you need to defeat AI, because passport, you know, physical passwords can be faked. If you take the keys to your Tesla or your Smart lock, all this, or your biometrics or your face id. Right. Basically digital identity of many different kinds. You're using that every single day. Right. And that's fundamentally intrinsically cryptographic and network based, as I call it, rather than state based. It's not based on piece of paper, it's based on passwords, based on cryptography. And then the most important form of digital identity is really your social network identity, because that's actually where your friends are. That's your WhatsApp identity, your signal identity. Almost certainly anybody who's in this room, maybe there's some people who still live in small towns where everybody knows each other and so on and so forth. But if you live in an apartment complex in a large city, you probably don't know who lives, you know, 300ft away from you in, you know, on the left and the right above or below. But you know, people who live 3,000 miles away from you and you're video chatting with them. Right. And so that means that your identity and your community is fundamentally digital. Right? And so that's what I call an Internet first lens on the world. Right. You know, the Orwell thing about how it takes a huge effort to see what is in front of one's own face that a fish can't see water. What you do every day is when you wake up, probably maybe you salute the flag, but you'll certainly check your phone. So you're definitely Internet first. It's the first thing you look at. That's where your currency is, that's where your community is. All your transactions are there, all your communications are there. So the digital identity is already becoming primary. Being locked out of your Google account is worse for you than losing your driver's license or your passport in many ways. That's why kids, for example, they need a phone more than they need A driver's license. Right. So the trends I'm describing are. Or what I think is going to happen is continuous with what has already happened at the scale of billions of people. And what I think is going to happen is that, you know, in the 90s, you went from people just kind of being tourists and having eyeballs on the Internet. In the 2000s, they were daily active users on social Networks. By the 2010s, they became holders of cryptocurrencies. And by the late 2020s, I think they will become members of crypto communities, the society as a service. Their crypto identity will be quite important to them, maybe the 2000 and 30s. And the reason for that is their fiat identities are breaking down. And for example, if you try to define the function is, underscore American without resorting to documents, the blue American, the red American will have very, very different definitions of what an American even is. They have totally different conceptions. And even within red America, you know, are they heritage Americans? Is it everybody's American who's based is everybody's an American other than, you know, people who arrived after 1965. These are just frantic arguments you're seeing online because they can't even define who's a member of their set. And when they, when they do this, it's similar to, you know, Democrats saying that everybody who you know like that, that democracy is equivalent to being Democrat. Many Republicans say that American is equivalent to being red American and say, have an identity crisis. And if you have an identity crisis, then even if you delineate a piece of territory, you can't even say who is legitimately inside or outside this territory. That's where all the arguments where the border are coming, where blue Americans have a completely different conception of that than red Americans do. So that identity and community, there's no ability to defend property, no ability to defend territory, since you're squabbling over who is allowed inside and outside the set. So all of that, in my view, those fiat identities in many ways, especially in the west, are going to be retired in favor of digital identities. And you know, bitcoin is, for example, one of them where it's a loose digital identity, but it's a real one where people can say, I'm a bitcoiner, I hold bitcoin. That defines me as a bitcoiner. And that's an identity where they have in common with Bukele, for example, across, you know, national borders, their Internet borders. So to your question, I think that it's similar to cryptocurrency and fiat currency. You can be, you know, you can hold obviously dollars or yen or what have you, and you can hold cryptocurrencies. And of course you're not asked to immediately switch over 100 to your cryptocurrency. And in fact, you probably won't. But over time, because of the rise of cryptocurrency more and more, if you hold 1% in cryptocurrency and then it rises 10x only, you're 10% of cryptocurrency. If it rises another 5x, you know, maybe you're, you're at, you have to work out the math. But let's say you're under 50% of cryptocurrency, right? So, so now suddenly you're majority crypto, even though you didn't start out to be. And so over time your identity in the same way will be something where most of the time you spend in your fiat society, as you spend more and more days per year in these new crypto communities, you will flip and then you'll be 50% crypto identity. Okay, so that's the second question. And then the. So it's not necessarily competitive with. It's kind of like having dual citizenship or having a portfolio strategy. It is true, probably that some of these communities will try to say, you should be a patriot to us and so on and so forth, and then you'll get into all the same questions of passport, reciprocity and so on and so forth. But I think it's not necessarily competitive at the beginning. You can be sort of polytheistic about it. And remind me, what was the first part of the question?

The first question is how will network states allocate? Whoa. Just moved capital to solve social problems. Sorry, the question moved on the screen as I was reading.

Yes, sure, sure, sure. So, so essentially I do think that startup societies will typically be founded initially at least by people who are like tech founders or VCs, or at least co founded by somebody like them because they are good at allocating capital. And indeed that's a core skill. The only way that could not be a core skill of a leader of society is if they were born with, let's say, a money printer. Right. But historically you always have scarcity and a leader, society has to allocate capital well, because even a rich country that spends, you know, let's say 10x more on ships or planes or cars than arrival does, will eventually not be rich because they're spending so inefficiently. So who is doing Capital allocation. It'll probably be someone who has the skills of a tech founder or vc, but of course it could be like a influencer with an online community and they're, you know, a co founder, for example. There's also political capital as well as social capital, but I think that skill set will be important. And how are they doing so well? I have this other talk that you can look at. It's called technodemocracy. It's on YouTube. I gave it a token Twitter for night. I'm going to republish it again. Where fundamentally the idea is that these societies are democratically legitimated in the following way. You combine voting with your feet, voting with your wallet, and voting with your ballot into signing the social smart contract before you sort of cross the physical threshold into the space. Okay, so you're literally with your online account, you sign the social smart contract, you cross the physical threshold. It's like agreeing to terms of service and it's recorded. And so this way you can just like signing a contract, for example, to join a company and you're in a hierarchy and you've got your position there and you've agreed that you're a vice president or you're an intern or you're a director of engineering or you're a product manager, you've agreed to your sort of position in the hierarchy. It's like when you join a new startup society, you agree to what your title is, right? And this actually pushes the contestation over who gets what, say over what, to the point of the boundary, the point of consent, the point of your admission to the society, Right? And if that's legitimate, certainly for, for a company, and we think it is, and if you've run any online community and somebody can say, okay, you're a member, you're not a member, this is just taking those kinds of principles and saying, okay, to be able to join this community, you need to exceed to these terms of service. This is the president, this is the vice president. Here's how it's governed, here's how capital is allocated. Do you agree to that? If so, sign the social smart contract. We'd love to have you as a member. If not, there's 999 other Sharp Societies on the Internet and you can just scroll to the next one, right? So now, of course, some startup society could decide, well, somebody who's just crossed across the boundary today should have exactly the same vote as someone who's been here for, you know, since inception, and they can vote to allocate Money from the treasury to themselves and so on and so forth. Right. And you could try that and see, you know, like, see if that works out for you. Or, you know, you could think. Well, think about Apple. Somebody who just joined Apple today is not going to have the same vote as Tim Cook. And in fact, they both mutually accede to that. Like, if you join the Apple Store today, you sign a contract, you accept a certain spot in the hierarchy in return for compensation and the potential of leveling up. And in return, they're not immediately doing political condensation against Tim Cook, and they accept that Tim Cook is the legitimate allocator of capital since he's been doing it well for. For some time. And then they can maybe work their way up to being president or CEO or what have you over time. Let me pause there.

Okay, thank you. Thank you, Balaji. So there are lots of hands up here. There are lots of questions coming in online. We'll try to be, if we could, because we have 10 minutes remaining with Balaji. We'll try to be brief. Augustus.

I'll try to be as concise as possible, too, but you guys are giving me good questions, so appreciate that.

Augustus, did you have your hand up? Oh, and right next to you, right here.

Oh, there's one.

Great.

Hi, Walji, how's it going? Sure. How are you doing?

Blessed. So in your graph on previous decentralization, then centralization circa the 50s, and now re decentralization, there's something implicit in that that isn't captured, where by pulling out of NATO, the United States has de facto taken vassals that are part of the empire and liberated them, and those are now true polities. Do you think that there will be a flash point that facilitates that radical upward slope in new polities that your graph showed via network states or Otherwise, like a 2028, January 6, that decomposes the American empire wholesale, or will it be a more gradual acceptance with the network state in Singapore as precedent and over the course of years, other people wanting to get on board?

Great question. And the future is volatile and I don't know. You know, when bitcoin came out, it was very hard to predict that El Salvador would adopt Bitcoin first. You know, so what I, what I would say is I do think that. I do think that we're in the 1989-1991 period and that it's like the end of the USSR and we're in the middle of it and we don't. Everybody doesn't fully understand that. And this is the end of the USSA in many ways. And so just one thing obviously I think is of historical importance are the tariffs. Because every country in the world was basically told that America thinks that, you know, they're ripping off the US and it's basically like a, you could think of it as a trade embargo. You can think of it as, you know, like almost a digital drone strike on every supply chain that transits through the U.S. it's like encircling the U.S. and blockading itself. It's almost like the sanctions that are typically imposed on a state like North Korea or Iran were imposed on the US itself by the US and the full consequence of that, Ryan Peterson, Molson, Hart have talked about how a lot of these container ships, there's a 30 day lag from when the tariffs were imposed on April 9, April 10 to May 10 when you're going to start seeing shortages hit LA ports. And that shortage, you know, will, will, will propagate out and it won't easily be resolved right away because you know, but even if you shift the policy, It'll take another 30 days before the shortages are resolved. So you'll be into June before the shorts are resolved and it won't even just be turning it back on again. There'll be a so called bullwhip effect. Very similar to what happened during COVID where lots of, you know, if you, if you dunk somebody underwater for 30 days and then you give them a bunch of air, they're still dead. So a bunch of these companies that just got killed by the tariffs, importers, exporters, all these people who got hit by these crazy port fees, they're, they're dying. So that's like a domestic thing. Then abroad, what is not really being covered that much, but it's important is all kinds of countries are now sort of recentralizing around China, like Malaysia, Vietnam, Cambodia, the EU is talking to China. All kinds of countries are recentralizing around China and China's saying, okay, free trade will continue, but China is the global logistics hub. So that is actually the biggest, one of the biggest consequences of the tariffs is the US is taking itself out of the center of global empire. Then the next thing that's going to happen, in my view, you're seeing France and others saying that they need to de$ize or the dollar's under threat. And this has been something since obviously the Russia sanctions where this giant global superpower had its assets seized and many countries felt that the US could do that to them. And so de dollarization kicked off in a big way, really after that. And so many countries have already had these sort of dollar independence programs. That's certainly going to accelerate. You're seeing a very weak bid for bonds, for example. At the same time, US stocks are down, foreign stocks are up. So de dollarization is in my view underway. And then you're going to see in my view retaliatory tech tariffs where even countries like Indonesia, even before this were trying to get a billion dollars of Apple for operating in the country. The EU wanted tech companies to do GDPR and build things on their soil. They have their own protectionism and nationalism and so on. That gets supercharged. Where countries will say, hey, we're going to, if you're going to tariff us on the land, we're going to tariff you on the cloud. We'll do tech tariffs. And so basically being a US based tech company, you're suddenly hit, it's going to hit huge headwinds because these billion user user bases are going to start getting taxed and you know, the local companies, because there's a local version often of Gmail or Uber or what have you, those will start gaining ground. So I think what's going to happen is the US is going to have red, blue and tech, red, blue and gray all taking hits where red is even more deindustrialized than it was, blue is more de dollarized than it was, and tech is more de technologized than it was as the world is basically de Americanizing. And why are they doing so? Because the US has told them to do so. They've said don't trade with America, don't send tourism to America, don't send students to America, don't send skilled workers to America, don't invest in America because if you do, then you know, Delaware is uncertain, CEOs can get shot, your Teslas can get blown up and on and on and the laws can change in a day and they can change back and forth and so on and so forth. Right? So we're in the middle of it, right? And what I think happens as a consequence is like, you know, lots, lots of things are going to get kicked into, into motion. It's, it's hard to say. It's one of those things which, which is, which is a lot of volatility. I do think that basically the more the dependence somebody has on the U.S. in the sense of being physically in the U.S. having money in the U.S. having companies in the U.S. having property in the U.S. all those things, you know, like the More dependent you are on that, the more that's breaking up. Like, Delaware was considered so stable. That's breaking up. The dollar was considered stable. That's breaking up. Rule of law, like the tariffs violated so many WTO things that the US itself had set up, that's breaking down. And you have these BLM mobs blocking highways. You have, you have all of this, you have crazy instability with, with, you know, people arresting each other every few years and saying, you know, nobody's above the law and everybody's mirroring each other's language on this. And you already have the ideological separation where you're at the point of Democrats not marrying Republicans. So that hub of the world, in my view, is just coming apart. And I think there's going to be a lot of shouting and a lot of shooting, and I can't predict exactly how. I know it sounds bad. I'm sorry. I'm just saying, calling it as I see it, I certainly wish this wasn't the case. Go ahead.

I think we have time for one more question. I'm going to try to combine a couple here that all pertain to the potential illiberal connotations of the network state. So one of them is how do you reconcile with peers like Curtis Yarvin who embrace the network state idea but openly call for the collapse of the legacy state, especially given the current US political context? Second question I think I would summarize like this. You've written elsewhere, a sort of a justifying slogan for the network state is that it would be geographically decentralized but ideologically aligned. If that were the case, would not this idea first appeal to, and perhaps have its real power base, say, with a population that was deeply invested in ideological alignment and homogeneity and perhaps also lacking in some of the stronger drives of loyalty to the nation state, namely global fundamentalist populations?

Yeah. So, I mean, curse is somebody who's obviously written for a long time. There's a lot of things, I think, where there's certain areas where I think we agree and there's many areas where we disagree. I think at the most fundamental level, I would consider myself a liberal in the small l sense, like a Bloomberg Democrat or a, you know, like when Giuliani was a Republican, the late 90s, you know, the difference between Giuliani, Bloomberg was not that much. So, for example, fundamentally I'm an internationalist. I believe in trade across borders. I believe in science across borders. I believe in, in a, in a unironic sense, the brotherhood of man. In that way, I like what Stanford was in the 90s. I like, I like consent, right? I think that's one of the biggest things. If I don't know if there's three or four areas where Curtis and I would have different emphases. He I put a lot of emphasis on consent, right? It's not simply that, for example, Elon is a monarch who runs Tesla. It's that every single person who is working at Tesla and SpaceX consented to be there and Elon consented for them to be there. There's a mutual consent. That's why there's power in that hierarchy, because everybody consented to be there. And so to adopt the terminology left ongoing affirmative consent is critical in that context, for somebody can leave at any time or arrive if they want. So consent is actually important more than just pure power, because consent is actually where power comes out if everybody's hearts and minds are aligned on the same goal. Number two is I don't believe the solution for the next n number of years lies within America any more than it lied within, lay within or solely within the Soviet Union in the final years. I think the future is probably going to be China versus the Internet and that the Internet is version 3.0. There's like Britain, then America, then the Internet. And if China inherits, you know, the physical footprint of American empire, like the military and the manufacturing, that inherits the people and the values and the language and the egalitarianism of the fact that everybody's a peer on the global Internet and you have peer to peer smart contracts and peer to peer monetary policy and peer to peer identity and you have, you know, rule of law, right? I don't believe in just rule of man, I believe in rule of law. I believe in cryptography is a contract that binds men even if they don't want to be bound. And they can't just on a whim, override it the next day. So in those ways, I would say an emphasis on internationalism, on consent, on the solution being on the Internet and probably outside the physical US and on contracts and rule of law and rule of code really that binds people. I actually wrote an article for example on this in foreign policy years ago, is actually the number one article in foreign policy then, which was great protocol politics. And so, you know, to be clear, by the way, you know, it's kind of like people who were anti Soviet, the, the, the people who are very hardcore communist group to everybody who's anti Soviet is anti regime. But there's lots of different kinds of ways you could be anti Soviet, it's like being anti Islamic fundamentalist. You could be Christian, you could be Hindu, you could be secular, you could be, you know, whatever, right? Similarly, to be somebody who doesn't necessarily believe in the current order, there's many different ways you can go from that and then to the other thing about homogeneity and so and so forth. In fact, what I'm describing is the opposite of homogeneity. I'm describing thousands of different startup societies that are all of consent. And you'll have a vegan community, you'll have a carnivore community, you'll have, you know, you might have a Sanskrit or Latin revival community. You could have also communities that are just of totally different kinds. You might have a formal wear community. You could have communities that actually want to larp the 1950s, or you could have communities that want to rehearse for Mars Travel. Right? Anything that you could build a starved society on, you could do. And I actually think the opposite is not. The networks is actually in a sense, it's diversity, it's decentralization, it is pluralism, it is egalitarianism. The opposite on their side is China. China is actually homogeneity. It's total state control, it's centralization. My view of the future is that China versus the Internet. And really in that China is actually the right and it's a state and it's a centralized power and the Internet is really in a sense, the left. And it's decentralization and it's liberalism, it's egalitarianism, it's pluralism. And that's where I stand.

Apology. I think we can continue this conversation for quite some time, but I think we are going to have to let you go. And with a hearty thank you, I would ask from the hall here. Thank you so much, Bartoloji, for your time. So please take care in Singapore. We hope to see you in Boulder someday. Biology.

All right, thanks, guys. Okay, bye bye.