The Network State’s New, Innovative Proposition

There is no question that the COVID-19 pandemic has affected our view of the world, and the current order of things. Revolutions such as remote work, combined with emerging social platforms such as Twitter, pressure us to live our lives more and more digitally, associating ourselves with digital reality almost more than physical reality. Furthermore, social media’s rapid emergence as a legitimate form of human society provides a vision for the future humanity is headed towards, which is a consensus that everything is going to be virtual, even government.

The transition from a primarily physical reality to a digital one occurs on many fronts. In many industries, the transition has already been made. For example, media almost entirely exists over the internet, with apps such as Twitter and TikTok creating a hub for crowdsourced American culture. In other industries, such as finance, relics of the past maintain hegemony, while emerging competition in the form of new technology (cryptocurrency) grows to pose a threat for what’s to come in the future. One of the orders of civilization most seemingly most established and immovable are the concepts of nation-states themselves. In his book The Network State, Balaji Srinavasan uses humanity’s historical trend towards progress to visualize a future where digital-first “network states” can gain diplomatic recognition from current actors; In it, he uplifts readers from any pessimistic outlook on the future to propose a science-fiction like departure from the current order in which sovereign individuals may adopt a state with ideological framework of their choice. While the ambition to reinvent the established global political order likely has low chances of success, Balaji’s overall favoritism towards building competing governments adjacent to our own provides a healthy alternative to current methods of political protest.

The vision for a network state world relies on a person’s access to their own status as a citizen. In Balaji’s view, a citizen’s access to their own data would depend upon cryptography and blockchain technology emerging as a primary consensus mechanism. In this case, a citizen would have the “private keys” to their own data, and thus can opt out at any time. As this article points out,

“Blockchain technologies allow storing the biometric data such as your fingerprints, iris scan, etc., in a geographically distributed database. As the personal data stored in a blockchain is encrypted, only the authorized persons will have access to it” (International Wealth).

Balaji sees these “blockchain passports” to be necessary for the network state because it would allow users to own access to their cryptographic private keys, which would represent a citizenship. If citizenships and passports were on the blockchain, it would allow users to opt out of an existing network state and opt in to a new one.

The general principle of the network state, as Balaji summarizes in one sentence, is that it 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.” When first reading this as a possibility, it seems far fetched. A reader’s reaction could vary greatly when prompted with this idea. Some may feel angered about this preposterous belief of a startup country. Others may feel confusion, or intrigue. I myself feel a sense of discovery and aspiration.

The path for a network online to become a state is laid out as a plan by Balaji. The first step of this being to “Found a startup society” online. In many ways, this has already been achieved and there exist thousands of “startup societies” or communities online that are aligned in interest. For example, on reddit people can centralize around specific interests such as the NBA. Balaji’s “startup society” does not rely on relatively trivial interests such as sports, but more so the big things: what are the rights of people in our community, what history do we believe is accurate, how do we raise our children, etc. In some sense this is part of Balaji’s genius when writing the book, which is the fact that it expands on the current subreddit-style internet communities of today. Now that there is a consensus that step #1 is currently being fulfilled, it allows the reader to suspend any disbelief, and follow the author along for the ride. His next steps are more ambitious, such as the next ones which include organizing the group to be capable of collective action, and building an internal cryptocurrency economy. These steps are a bit more advanced and require more than just an aligned interest, but also an intention. The intention being to build the society to become something tangible, that can accomplish things in the real world as a unit. This is almost like the founding of a company, but the new version of one. I imagine what is necessary for this to function properly would be the establishment of a formal council of leaders, and perhaps voting powers for citizens to check their power. Again, as a reader, even with doubts in the back of my mind, I cannot help but attempt to imagine a future where Balaji’s Network State does manifest into reality.

Balaji’s proposition of upending the current geopolitical norms comes from his experience as a founder himself. He has experience founding a biotech company, and in addition helped Coinbase grow as the CTO. In some sense, the vision required for reimagining governments is like that of a founding father. In a way, Balaji is his own version of a founding father, having built companies from scratch and being an executive in Silicon Valley. Because of his experience as a founder, his following consists of readers interested in technology and the future of cryptocurrency.

The nature of Balaji’s following makes me question his intentions when writing this book. To what extent is the book filled with ideological angles which align with his audience, and how much of the book are genuine explorations of the questions he is facing? For example, in the book he places lots of criticism of the current establishment of the nation state. These criticisms primarily target what he calls the authoritarian state. The main worry Balaji displays are the commonly believed tropes of a strong government restricting speech, with elitist leaders having ultimate jurisdiction on all topics. My question relates to Balaji’s bias in this situation. Throughout the book it appears to me that Balaji focuses on his own ideas for what a negative living situation is. For example, there is an underlying assumption towards freedom of speech and liberty being optimal goals to aspire towards. Values such as unity and identity across people seem less sought after. I question if other ideological backgrounds would favor unity, primarily valuing an ethnic unity. For example, I am familiar with leaders in China valuing unity amongst the Chinese people above all, and any deviation from that would be seen to be as bad as we would view an authoritarian state.

Balaji’s attempt to solve against authoritarian regimes may present another problem, which is the descent into complete anarchy. Anarchy would be a nightmare scenario, and people of the future would view today’s systems as a utopia. Violence between “Network States” seems unavoidable. Neighboring communities could stage invasions, stealing resources from other states. Safety would be hard to come by in a world where large military-backed nation states are not protecting territories. When further considering this possibility however, the point arises that violence between nation states is currently common. We can become numb to death tolls reaching the hundreds of thousands. These are the prices paid in wartime, which we are lucky to avoid living in the United States. Even intra community violence can be common in many places. Plenty of countries have been plagued by civil wars, or gang-like violence.

The final concern I will discuss that I wish Balaji addressed more is the possibility of an extreme case of classism occurring between network states. Elites living in a higher wealth state could potentially flee from average citizens and oppress them with any advantages over them. As Ethereum co-founder Vitalik Buterin puts it,

“This is all great for skilled professionals and rich people. Multimillionaires fleeing China’s tech crackdowns and covid lockdowns (or, for that matter, moral disagreements with China’s other policies) can often escape the world’s systemic discrimination against Chinese and other low-income-country citizens by spending a few hundred thousand dollars on buying another passport. But what about regular people?” (Buterin).

Vitalik points out the trap readers and Balaji can fall into. It is easy to imagine a utopian scenario, however a frightening dystopia could be just as likely. Without borders, governments, and markets set on protecting people under their jurisdiction, it is entirely possible for large groups of people to be left without a home. Not just left without a home, but cast out of the economy completely, left to produce in subsistence. In some sense the nation state’s macroeconomic incentives generally lead to states increasing their people’s wellbeing over time. If network states are to become highly exclusive clubs, this could leave most people hopeless.

The experience of reading the book is a constant reflection on current norms, and how they can be improved. Throughout the read, I was comparing and contrasting current norms with the proposed future Balaji discusses. These questions are what makes the book valuable and interesting. Readers are invited to criticize the current order and find areas of improvement. I can put myself in the shoes of Balaji, who is acting as his own “founding father”, attempting to redesign systems with a digital-first approach. Finding flaws in his proposition feels like part of the experience, and as an author he leaves the impression that he is open to dialogue and criticism from outside voices.

The most admirable aspect of the book remains to be the approach Balaji takes with the nature of the storage of the book itself. He publishes the book such that,

“unlike the typical book that’s frozen in time, think of this as a dynamic bookapp that gets continuously updated. You can see the latest version online, or you can follow the instructions at thenetworkstate.com/kindle.gif to get the latest version on your Kindle” [Srinavasan, Chapter 1].

Much like the work of a Banksy being painted on a street wall, it is evident that the medium of an artwork can add value to the interpretation of the artwork itself. The same applies to Balaji’s book, which, as he puts it, is meant to be more of a “toolbox” than a manifesto. The book is to be updated, as pointed out by the previous quote from the preamble. Balaji opens with this to preface the book by saying the thoughts presented are not set in stone. He is adapting his beliefs and worldview on the topic as time goes on, and technologies advance. Additionally, his status as an active Twitter account adds flavor to the concept of the project. His daily interactions with other reputable minds, but also the average audience, allows his views to almost be crowdsourced. Any twitter user with persuasive input can influence Balaji’s view of the world, and in turn affect the next update of the book. The nature of Balaji’s online presence further demonstrates his philosophy of democratization of ideas.

The Network State, https://thenetworkstate.com/.

Buterin, Vitalik. “What Do I Think about Network States?” Vitalik Buterin’s Website, https://vitalik.ca/general/2022/07/13/networkstates.html.

“Blockchain Passports and Citizenship for Crypto.” InternationalWealth.info, 15 Apr. 2022,