4 min read

Starting a network state

Imagine a country that is a network of like-minded individuals where everyone strives to make progress towards common goals. A country that uses cryptography and a ledger of record for ultimate truth and fact checking.  A country that embraces a pseudonymous economy to mitigate cancel culture. A country that can start anywhere in the cloud and will later materialize in the real world.

These are just some of the features of  a "network state".  Or as Balaji likes to put it in one sentence:

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

– Balaji Srinivasan

This essay is a brief introduction on how we start one.

Start from your computer

From community to currency to country.

In the digital age, the concept of online communities can be considered a "primitive". Whether you want to create a group chat for a handful of people using your favourite messenger application, or maintain a dedicated server that handles the communication of hundreds or even thousands of like-minded users. Chances are it takes you just a few clicks (or taps) to make that happen.

The first step for a network state is to create such a community and find the people that align with the principles, values and purpose of the future cloud country.

Online communities are great for this because they can be pseudonymous by default. This makes the network state hard to conquer which turns out to be one of the most important building blocks of the network state. I'll get back to why in a bit.

The next step is offline meetups. All it needs is the critical mass of two people in the same city or similar area to meet, discuss and work on technologies and solutions that help the network state's progress.

Blockchains like Ethereum enable communities to create custom currencies and decentralized applications that will be used for governance, payment, fact checking, and many other things. All of that in a transparent and verifiable manner. DAOs ("Decentralized Autonomous Organizations") will form to work on these open problems, contributing to the definite purpose of the network state.

The more people join, the more capital is being amassed. Eventually, that capital is used to buy land and the network state materializes in the physical world.

It's cloud first, land last. But not land never.

Digitally-linked enclaves

First 10, then 1000, then 1000000.

Getting from an online community to an online country may sound utopian first, because not everybody will be or live in the same city or region. The reality is that we don't need to be physically in the same space to make something happen. These days it's not unusual to have more in common with the people you meet online than with your neighbour next door. The network state will emerge as an archipelago of digitally-linked enclaves across the world.

This is very similar to island group states like the Republic of Indonesia, which is a country that has over 17000 islands. Some of them are physically closer to other states than to other islands of the same state. Yet, they still belong together.

Islands of the Republic of Indonesia

We can take ideas from company offices located in different countries and cities as well. Typically at FAANG and other bigger companies, any employee can enter any office building as long as they hold the company badge. We already see communities and DAOs evolve around efforts to accumulate funds and build or buy office spaces for members to use.

All of that isn't to say that physical space isn't important. Part of the network state's goal is to eventually crowdfund territory after all. However, physical distance is less important to start.

Pseudonymous economies

Powered by crypto.

As previously mentioned, one of the great features online communities have is that they enable something called a pseudonymous economy. To understand pseudonymity, it's important to distinguish between real names, pseudonyms and anonyms. Your real name is your speaking name or "state" name.  It's the name you find on your passport and your ID. Anonyms are often temporary and don't have any reputation attached to it. You can find a lot of such accounts on platforms like Reddit or 4chan. Pseudonyms sit somewhere in between. They can be anonymous but don't have to be. They are a continuum that can develop a reputation without disclosing the person (or people) in charge.

In the crypto and web3 space pseudonymity is already very common. This has various reasons. A few of them are:

  • Some people deal with (crypto) accounts that have a lot of funds attached to them and they don't necessarily want the world to connect their identities to those funds. Or as Naval says (paraphrasing):  "Don't try to be rich and famous. The last thing you want is having a lot of money and everyone knowing that this is the case."
  • It's harder to get cancelled. Once there's reputation at stake, people need to be careful with what they say unless they want to risk a shit-storm from their followers or even to get de-platformed. With a pseudonym in place people can continue to operate with their speaking name or another pseudonym.

Members of the network state will participate pseudonymously and build trust and reputation around their identities. Some might even have multiple pseudonymous identities for different activities, like developer tasks or journalism.

For an in-depth description on how to create your own pseudonymous identity, check the importance of pseudonymous identities and how to create one.

Get involved

Join the network state or start your own.

Obviously, there's much more to building a network state and plenty of experimentation, exploration and trial and error to be done. Here are some links and resources to dive deeper into different topics:

I'll publish more essays around crypto and network states here as well, so if this interests you, don't hesitate to reach out on twitter with ideas and questions.