What do I think about network states?

By Vitalik Buterin

2022 Jul 13

On July 4, Balaji Srinivasan released the first version of his long-awaited new book describing his vision for “network states“: communities organized around a particular vision of how to run their own society that start off as online clubs, but then build up more and more of a presence over time and eventually become large enough to seek political autonomy or even diplomatic recognition.

Network states can be viewed as an attempt at an ideological successor to libertarianism: Balaji repeatedly praises The Sovereign Individual (see my mini-review here) as important reading and inspiration, but also departs from its thinking in key ways, centering in his new work many non-individualistic and non-monetary aspects of social relations like morals and community. Network states can also be viewed as an attempt to sketch out a possible broader political narrative for the crypto space. Rather than staying in their own corner of the internet disconnected from the wider world, blockchains could serve as a centerpiece for a new way of organizing large chunks of human society.

These are high promises. Can network states live up to them? Do network states actually provide enough benefits to be worth getting excited about? Regardless of the merits of network states, does it actually make sense to tie the idea together with blockchains and cryptocurrency? And on the other hand, is there anything crucially important that this vision of the world misses? This post represents my attempt to try to understand these questions.

Table of contents

What is a network state?

Balaji helpfully gives multiple short definitions of what a network state is. First, his definition in one sentence:

A network state 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.

This so far seems uncontroversial. Create a new internet community online, once it grows big enough materialize it offline, and eventually try to negotiate for some kind of status. Someone of almost any political ideology could find some form of network state under this definition that they could get behind. But now, we get to his definition in a longer sentence:

A network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of civility, an integrated cryptocurrency, a consensual government limited by a social smart contract, an archipelago of crowdfunded physical territories, a virtual capital, and an on-chain census that proves a large enough population, income, and real-estate footprint to attain a measure of diplomatic recognition.

Here, the concept starts to get opinionated: we’re not just talking about the general concept of online communities that have collective agency and eventually try to materialize on land, we’re talking about a specific Balajian vision of what network states should look like. It’s completely possible to support network states in general, but have disagreements with the Balajian view of what properties network states should have. If you’re not already a “crypto convert”, it’s hard to see why an “integrated cryptocurrency” is such a fundamental part of the network state concept, for example – though Balaji does later on in the book defend his choices.

Finally, Balaji expands on this conception of a Balajian network state in longer-form, first in “a thousand words” (apparently, Balajian network states use base 8, as the actual word count is exactly 512=83) and then an essay, and at the very end of the book a whole chapter.

And, of course, an image.

One key point that Balaji stresses across many chapters and pages is the unavoidable moral ingredient required for any successful new community. As Balaji writes:

The quick answer comes from Paul Johnson at the 11:00 mark of this talk, where he notes that early America’s religious colonies succeeded at a higher rate than its for-profit colonies, because the former had a purpose. The slightly longer answer is that in a startup society, you’re not asking people to buy a product (which is an economic, individualistic pitch) but to join a community (which is a cultural, collective pitch).

The commitment paradox of religious communes is key here: counterintuitively, it’s the religious communes that demand the most of their members that are the most long-lasting.

This is where Balajism explicitly diverges from the more traditional neoliberal-capitalist ideal of the defanged, apolitical and passion-free consumerist “last man”. Unlike the strawman libertarian, Balaji does not believe that everything can “merely be a consumer product”. Rather, he stresses greatly the importance of social norms for cohesion, and a literally religious attachment to the values that make a particular network state distinct from the world outside. As Balaji says in this podcast at 18:20, most current libertarian attempts at micronations are like “Zionism without Judaism”, and this is a key part of why they fail.



Categories: Activism, Secession, Strategy

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