The Future (State) is Networked:

A Review of Balaji S. Srinivasan’s “How to Start a New Country”

Dr. Balaji S. Srinivasan has a crazy idea.

He thinks that in the future, tech-savvy people will leverage the power of cryptocurrency and remote work to vote with their feet and create networked states — communities of shared interest and ideals which unite groups of people around the globe into states which have the power and prestige to operate on the world stage.

And I believe that, once again, he’s right.

See, Dr. Srinivasan has had a few crazy ideas in the past, which turned out to be remarkable prescient — it’s what has made him a co-founder or early-stage investor in numerous startups, the the former CTO of Coinbase, and a general partner at Andreessen Horowitz. It’s also what has earned him numerous awards including MIT’s “Innovators Under 35.”

If you’re not familiar with Srinivasan, there’s really no better place to start than listening to his recent appearance on The Tim Ferriss show — where you’ll be introduced to ideas like “Win and Help Win,” but maybe do that after you finish this article to see why I’m all-in on the idea of networked states.

Dr. Srinivasan outlines the main reason why people might want to control their own state; “to build something new without historical constraint,” clarifying this statement by noting that:

The financial demand for a clean slate is clear. People buy millions of acres of vacant land and incorporate hundreds of thousands of new companies each year, spending billions just to get that fresh start. And now that it is possible to start not just new companies but new communities and even new currencies, we see people flocking to create those as well.

The societal value of a clean slate is also clear. In the technology sector alone, the ability to form new companies has created literally trillions of dollars in wealth over the past few decades. Indeed, if we imagine a world where you couldn’t just obtain a blank sheet of paper but had to erase an older one, where you couldn’t just acquire bare land but had to knock down a standing building, where you couldn’t just create a new company but had to reform an existing firm, we imagine endless conflict over scarce resources.

He acknowledges that there are several time-honored ways to create your own country; war (win/steal your country from the current occupants) politics (get elected by the current occupants to control it) lead a revolution against your rulers and replace them (this is really a combination of the first two methods.)

Then there are the less-conventional, and frankly less practical methods; buy or squat on an island or artificial structure, plant your flag and declare yourself “Lord/Lady of the Rock,” buy a cruise ship and exploit the freedom of the open ocean, or go to space.

The first one is a bit laughable; the other two have some potential, but a prohibitively high cost of entry for most folc. So, what to do?

Dr. Srinivasan says that the answer is in the cloud.

Our idea is to proceed cloud first, land last. Rather than starting with the physical territory, we start with the digital community. We recruit online for a group of people interested in founding a new virtual social network, a new city, and eventually a new country. We build the embryonic state as an open source project, we organize our internal economy around remote work, we cultivate in-person levels of civility, we simulate architecture in VR, and we create art and literature that reflects our values.

Over time we eventually crowdfund territory in the real world, but not necessarily contiguous territory. Because an under-appreciated fact is that the internet allows us to network enclaves. Put another way, a cloud community need not acquire all its territory in one place at one time. It can connect a thousand apartments, a hundred houses, and a dozen cul-de-sacs in different cities into a new kind of fractal polity with its capital in the cloud. Over time, community members migrate between these enclaves and crowdfund territory nearby, with every individual dwelling and group house presenting an independent opportunity for expansion.

He suggests that this concept is little different than that of “ethnic diasporas, which are internationally dispersed but connected by communication channels with each other and the motherland… our version is a reverse diaspora New recruits can come to either the virtual or physical environment, beta test, and decide to leave or stay.”

So, why I am personally sold on the concept? Because I’ve got a bit of experience with similar communities of shared interest, specifically Burning Man and WeLive. And with a degree in National Security Affairs, I’m able to highlight the fact that the idea of the neo-nation-state power of online communities has been a topic of discussion for some time; when Dr. Srinivasan asks —

Could a sufficiently robust cloud country with, say, 1–10M committed digital citizens, provable cryptocurrency reserves, and physical holdings all over the earth similarly achieve societal recognition from the United Nations?

— the answer is probably “yes.” He goes on to note that when,

…Facebook has 3B users, Twitter has 300M, and many individual influencers have more than 1M followers, it starts to be not too crazy to imagine we can build a 1–10M person social network with a genuine sense of national consciousness, an integrated cryptocurrency, and a plan to crowdfund many pieces of territory around the world.

Such a “cloud country” would, he observes,

…actually fit right in the middle of the pack globally, as out of the 193 UN-recognized sovereign states approximately 20% of existing countries have a population of less than 1M and ~55% have a population of less than 10M. This includes many countries people typically think of as “real”, like Luxembourg (615k), Cyprus (1.18M), Estonia (1.3M), New Zealand (4.7M), Ireland (4.8M), Singapore (5.8M), and so on.

This analysis is spot-on, and Dr. Srinivasan is not the only person to suggest that this may be the model of the future; Ada Palmer, in her Terra Ignota series ofscience fiction books, has already posited just such a world, where communities of shared interest (organized, she imagines, around a diverse set of causes that resonate with human beings) have largely replaced the traditional nation-state, which is, itself, a fairly recent invention.

So, that’s my quick-and-dirty review of Dr. Srinivasan’s paper, which, again, is well worth reading in its entirety here.

I’d love to hear your thoughts on this concept, either here or on Twitter.

All the best,

Edward

p.s. If you really enjoyed this review, please share it on your social media channels, and or send a little crypto my way: Bitcoin here, LiteCoin here, or Ethereum here!

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Edward H. Carpenter

Author, businessman, athlete, Marine officer, and world traveler. Likes rugby, reading, scuba-diving, and volunteer teaching. Hates liver and sea urchins.