The Network State, a socio-political concept introduced by former Coinbase CTO Balaji Srinivasan, integrates blockchain technologies, creating alternative political entities.
Virtual and Physical Dimensions
This innovative organization extends beyond the virtual realm, involving the acquisition of land worldwide, forming a network archipelago and blurring the lines between virtual and physical existence.
Inclusivity of Communities
Any like-minded community with aspirations can theoretically evolve into a Network State, fostering a sense of unity and shared objectives.
Why Create New States?
Origin and Purpose
Balaji Srinivasan’s book, “Network State,” proposes a blueprint for creating Network States, offering an alternative to traditional political entities by leveraging blockchain and technological innovations.
Technological Advancement vs. Political Change
Srinivasan argues that technological progress outpaces social and political advancements due to the dominance of nation-states, limiting experiments in societal organization. Unlike politics, entrepreneurship allows for experimentation without the need to integrate into existing power structures.
Accelerating Social Progress
The Network State project encourages leveraging market dynamics to expedite social progress. Entrepreneurs can establish startup communities, akin to starting a new business, fostering diversity and enhancing societal development.
Fundamental Principles of a Network State
Defining a Network State
According to Srinivasan, a Network State is a social network offering moral innovation, collective self-awareness, a recognized founder, collective action, a level of interpersonal correctness, an integrated cryptocurrency, a consensus-based government with social smart contracts, a physical territory archipelago, and a virtual capital conducting on-chain population census.
Key Elements
- Moral Innovation: Shared ethical ideas expressed through a “One Commandment.”
- Founder’s Vision: An exclusive right for the founder to make decisions.
- Cryptocurrency Integration: Enabling economic functions, identification, voting, and crowdfunding.
- Land Ownership: Physical assets distributed globally.
- Diplomatic Recognition: Differentiating a Network State from other community organizations.
Differentiation of Concepts
Srinivasan distinguishes between startup communities, network unions, network archipelagos, and network states, emphasizing that not all startup communities aspire to evolve into full-fledged Network States.
Moral Innovation as the Foundation
At the core of all Network State entities lies the concept of moral innovation. It unites community members, providing a shared identity and purpose for collective actions. The “One Commandment” can revolve around lifestyle preferences or value-based positions, fostering coordinated online and offline actions.
The Role of “One Commandment” in Community Actions
Members collectively act in alignment with the “One Commandment.” For instance, members of a vegan startup community might spread information on the benefits of a plant-based diet or open vegan restaurants. Similarly, a community against cancel culture may support individuals affected by online harassment.
Why Land Matters to a Network State?
Cloud First, Land Next Principle
Before acquiring land and non-digital assets, startup communities adhere to the “cloud first, land next” principle. Online organization enables the development of ethical rules, community self-awareness, blockchain architecture, and decision-making processes.
Land Acquisition for Collective Living and Business Ventures
Acquiring land becomes crucial for communal living and establishing businesses. Srinivasan suggests initially buying plots outside major cities, where corporations and states have less interest. Territories owned by startup communities connect to form an archipelago through a network.
The Crucial Role of Blockchain
Blockchain as the Backbone of Network States
Blockchain serves as the primary infrastructure for Network States, enabling identity verification, digital asset ownership and exchange, decision-making, property rights registration, legal relationships, marriages, and more. All interactions, recorded on the blockchain, provide real-time statistical data about the state.
Consensus-Based Smart Contracts and On-Chain Records
Consensus-based smart contracts play a pivotal role in governing Network States. Srinivasan envisions the emergence of multiple citizenships, allowing individuals to participate in the life of several network states using Web3 logins. The on-chain record acts as a ledger of verified events, ensuring a transparent developmental trajectory.
Distinctive Aspects and Criticisms of Network State
Differentiating Network State from Previous Utopias
Comparing Network State to historical utopian projects, sociologist Pavel Stepantsov highlights its focus on societal relations evolving from technological innovations. Unlike previous ideologies, these utopias see technology as a “way of life,” shaping new forms of social interactions.
Criticisms Raised by Vitalik Buterin
Vitalik Buterin, Ethereum’s co-founder, raises concerns about the guiding role of the founder, exclusivity, and potential power asymmetry. He also critiques the limited accessibility for individuals with modest means, the lack of a clear “exit strategy” for global political issues, and the risk of negative externalities in a deregulated world.
In conclusion, the Network State concept introduces a paradigm shift in societal organization, blending technology, ethics, and community dynamics, while facing scrutiny and constructive criticism for its potential challenges and implications.
