Network States in 2025 and Beyond

Transcript

[Music] Good to go. Cool. Uh hello everyone. Um great to be at at uh ECC. I was here last year and first time in in can which is also really fun. Uh we're going to talk about network states in 2025. Uh and it's this is not my day job. My day job is I work for a crypto insurance company. We do a lot of crypto insurance. It's a little bit tangentially related network states but this is really like a a passion project of mine. Uh network states have been around I mean uh biology created the term in 2020 and sort of started pub he published a book in 2022. So the concept of network states is um as a name thing

is pretty recent but the idea behind it and the ideas behind it are decades maybe centuries old. Uh it's very interesting, but as as network states are defined, I I have a little bit more expansive definition than Bali's definition, but this is a pretty good one. Uh basically, a network state is a highly aligned online community with a capacity for collective action that crowdfunds territory throughout the world and eventually gains diplomatic recognition from pre-existing states. And I think that's pretty good, but I think that's a destination. And I think what's actually more interesting is how you get there. And how you get there is going to determine really how the thing works. uh as far as I'm concerned, these are deeply tied to crypto. F first question is who has heard of network states before in the audience. Okay. So, pretty pretty pretty pretty but I I

think we would all agree that they're they're pretty deeply tied to crypto. Like without crypto, it's very difficult either cryptocurrency or cryptography generally. It's very difficult to have people cooperate at a distance online. And really the uh the enabling technologies for these things, there's multiple enabling technologies, but um cryptography and cryptocurrency are two of the uh more critical ones. Bology is certainly a central role in a lot of this stuff. He created it. He has a venture fund doing it. He's behind a couple of the big projects in the space. Uh he was formerly the CTO at Coinbase. Uh did some genetic stuff. Has a really long and interesting technical history and as a very prolific uh user of the internet. So you see a lot of stuff that he's posted online. Uh I was part of the

Cipper Punks group back in the 1990s. The uh mailing list that was created in like 93. I joined in '94. I was like 15 years old. It was a uh group of people that were talking about what the world would be like once we had cryptography widely deployed and uh wasn't called crypto well it was it was cryptocurrency I don't know we used mostly the term ecash at the time but basically anonymous online digital payments u they were centralized instead of decentralized was the main difference and then I got involved in seasteading which is another area that's sort of like one of the precursors of network states uh I was the CTO at this company called Havenco that did the data center on a tiny World War II abandoned anti-aircraft platform in the North Sea that the British had abandoned that declared itself sovereign in 1967 and we

ran a data center there from like 1999 to 2002 uh which is pretty interesting and then there's a whole bunch of libertarian social movements that have happened around the world. Uh there's also uh there whether a a group of people leaving where they're from to go create something new somewhere else. There are precedents in the real world uh historically there's like the people settling uncharted territory colony diaspora communities things like that there's also a lot of precedents in the pre-crypto or physical sort of space. Um, what I'm interested in is mostly what's happening. I I I think a lot of interesting stuff has happened in the past, but I think the most interesting stuff is what's happening now and what's happening in the future and what is

impeding what is what what things need to be built to get to where we need to be. And I think we have a lot of trends from 2025 that sort of build a lot of um motivation for why this stuff is going to be popular. Uh it's both positive and negative, but I'd say nationalism has really reemerged politically around the world. There's a lot of countries, US especially, but all around the world that really care about their borders, are enforcing their borders in a lot their physical borders in a lot of ways that they hadn't before. Also enforcing digital borders like China with the great firewall in the 90s, late 90s, early 2000s was uh sort of a was like a leader in the space of basically cutting themselves off from the world and connecting only in very limited ways. uh a lot of other places do that by default

by having a different language than everyone else. So like the internet that's used in uh languages that are not like top 10 languages is fairly self-contained and uh unique on its own. So if you have a you might have a social media company that wins in that particular space and that becomes sort of a closed community there. Uh another big thing that's happened is travel permissions and like the process of traveling. I travel like 200 days a year and travel postcoavid has become such a hassle for most people in relative to what it was in 1999. I'd say 1999 was the peak of easy travel across a lot of borders. There's a lot of pre-registration required in various places. Things like the US ESTA UK or UK ETA Australia ETA EDIOS even for visa-free countries a lot of countries

are losing their visa-free status. So visas and other permissions are increasing. So the physical physical permeability is is decreasing. Remote work is definitely hit or stay. Like there was a period where I mean I've I worked remotely for like what 25 years or whatever. But um remote work has become pretty common. There was it it got pushed I mean co certainly accelerated it from 2000 to 2020 to like 2022 or so. But then there was a push back on it from some organizations. But I think that's mostly been pushed back against. So the the counter revolution has has like uh pushed and remote work or at least hybrid work is here to stay and that becomes a major thing and there's a lot of regulatory arbitrage.

There's a lot of regulatory regimes that are very different in different locations either on how easy it is to build stuff or how easy it is to run certain kinds of businesses. So rather than going to the one world government model that a lot of people have been afraid of, there is definitely a difference in how uh certain countries uh run certain things and and subnational entities like the even within the United States like which which state you're in determines a lot of laws and also how easy it is to build. What community you live in in a local area also determines how easy it is to build. And a lot of that stuff has just been uh accelerating and a lot of people are moving because of the these other things because they have the ability to uh work remotely. Everything else they can take advantage of this.

There's the perpetual tourist or the perpetual traveler, the nomad lifestyle, things like that that are pretty common among a lot of people especially in the crypto space. And then there are projects where I've worked with people for like three years and never met them in person, then we finally met up. So things like that. So that's a a pretty big uh there's a lot of trends that exist in the the current space. Uh what's happening now in the network space? I mean the biggest thing is still conferences both like traditional conferences talks at conferences like this and then like the Zuzalu type conferences that we had. Uh there was a conference in Montenegro a couple years ago. There have been a couple successor events. There's the Zupass. There's a lot of cool stuff like that. Uh Vitalik was involved in um the creation of Zuzalo. A lot of other people involved

from the Ethereum community. So there's a very tight Ethereum crossover there. Uh and then Bology's Project Network School, which I got to attend last year. It's amazing. Uh in Singapore, which is a great city on its own, there's a tiny little um there's a like a causeway. And then the part of Malaysia that's right across the streets from um Singapore is called Johor Buu. It's a town that like before Singapore broke off, it was much more connected to Singapore. But it's basically a it was a crazy real estate bubble. Like there was a Chinese real estate bubble where they built like millions of units of housing there and 9,000 people live there for about like 5 years. Uh complete wasteland and then people have been trying to find stuff to

do with it. Uh he was able to rent a large tower hotel and do a cool thing where hundreds of people came working on their own projects working. They had like Brian Johnson, the life extension crazy guy, uh with the like nutty uh food products that he eats and the all the other treatments and a lot of other cool stuff that's going on there. So, sort of like experimenting in physical space with the kind of stuff that people experiment with online and the cost of living is very low. Visas are very easy to get. It's a great place and he has a conference every two years, the network state or every year. Uh he's had it in Amsterdam. Usually right before the or right before or after the Salana conference. There was one in Amsterdam.

There was one in Singapore last year. Uh certainly not going to announce that he's going to have another conference because he hasn't announced that he's going to have another conference, but there is a Salana conference that conveniently has a day right after it in no in uh October this year in Singapore. So there's very high likelihood of a conference. And uh there they do a pretty good job of showing the 30 or 40 projects that are happening in the space. There's a uh sort of a tension between building something that's really capital intensive, really big, requires a lot of effort, which takes a lot of time, or doing something that is fast and gets immediate feedback and gets a lot of people to respond. And you you really do want to have an ecosystem with a lot of experiments, but you do need to also have some big wins. Uh some of the

biggest things that have happened in the space did predate the network state terminology, but are very much philosophically network state. uh Prospero which is um so British Honduras was is an island that is off the coast of Honduras became part of Honduras uh like century decades ago or whatever. Uh it's always been sort of a different place. Honduras is a I mean Honduran people are great everything else but Honduras as a country is incredibly challenged like from a security and economic perspective and uh like my company would require that I have security detail to go into downtown and stuff. So, it is a tiny little island that is off the coast that is very very safe, lots of tourism, everything else pre-existed. Some people created a uh set of laws, the the um uh laws that can

do like a charter city kind of law where you're allowed to have a municipal government that is essentially privately owned that owns some territory and has the ability to be a municipal government like a town government within that town. And they created a interesting place. They took over a resort that had been abandoned during COVID or like was bankrupt during COVID. So they have a lot of physical infrastructure there, golf course, a lot of biotech research, which is a niche that's very interesting there. Lots of cool stuff happening there. It's been a physical place that's been happening for a while. They are unfortunately having a lot of legal um and contractual disputes with the federal government of Honduras that are being uh litigated through federal like international legal entities. So that's going on. And there's this big thing

called the free state project in New Hampshire which is uh the way the US voting system works is you have like uh some thing obviously a federal system and there is a there's a lot of states that are very small. There's some states that are like California, New York, uh Texas that are tens of millions like 50 million people. But then there's a lot of states there's like 15 states that are about 1 million people each. And the thesis was if you move thousands of people like 10,000 20,000 people to a state that only has a million people, you can make a meaningful change in the demographics as far as voting and everything else of the state. People like libertarian political people created this maybe like I don't know like 20 years ago as a concept and then created a contract where if everyone else moves you're supposed to move too.

Um a lot of people moved. New Hampshire was a state they picked. It's a small state near Boston and uh they uh have been relatively successful. a friend of mine is actually a state legislator in that state now and he's just like a sci-fi author. So, it's kind of kind of cool. Uh but yeah, that's going on. So, these things are happening and they're there they there's progress but it's certainly not progress to the same degree that like AI is having progress or mobile phone computing had progress or the internet had progress or whatever else. It does seem like things are kind of stalled. uh Dows I I mean philosophically I love Dows but I think there has not been a there's been a lot of DAO not great like covering themselves in glory situations. So I I

don't know that they have been the most successful part of cryptocurrency that has in the crypto space that has existed today. And the the big thing that's missing is why do people want a network state? uh there's a lot of this infrastructure of how you'd build a network state, everything else, but there's not a whole lot of what is the the the core reason that the network state exists. And until there is something that is so um overwhelmingly interesting that people do genuinely want to participate in it, there's going to be a lot of experiments, but I don't think there's going to be a a truly big success. And then that's that's how you get the the early uh adopters as that whole like Christensen curve of adoption. But you also need to have something that does hit escape velocity

and has a lot of success. It doesn't necessarily need to be a super ambitious project. It just needs to be uh large scale and success seen as successful. So it could be something that is um an education based community or something like that. There's a lot of cool stuff that could happen and there is a lot of infrastructure. But the one thing that I've noticed from crypto from the past like 30 years is if there's a need for something to exist as an infrastructure project, people are very good at building it. They may not build it perfectly. There might be like 10 different versions that are funded by different VCs that are trying to build it. But generally if infrastructure is needed, it does get built. So, so that exists and obviously we're all crypto people and what can we do? I mean obviously crypto is a great source of

capital for projects like this and there's a lot of services that are provisioned through crypto that are great and then participating like a lot of us work remotely. we can participate in these kind of projects and a lot of cool things. So mostly I wanted to have a discussion and some questions about uh things that people are interested in from network states and specifically from the crypto perspective. But thank you. [Applause] Thank you. Uh to put it in a very big nutshell, uh globally nation uh nation state would be some kind of uh online democracy. Um and therefore how do you

avoid on the very long term uh for those online democracies to just as the physical and physical democracies and governments to just turn into uh dictators or like where there's some kind of natural leaders that just appear takes powers and stuff. Uh I think you don't prevent that. So that's a great question. I think you don't prevent that. The advantage of online is you can fork off and just leave if you find a community is bad. So certainly there's a lot of smaller scale things you can do to prevent negative um political dynamics or personality cult or whatever else happening in a community. But if a community gets bad, you just create take your stuff and go do something else. And that's the the great advantage that you don't have with physical space. One of

the cool things about seasteading like like the idea of like living on like floating platforms on the sea that link up together is the idea that you could build a house or a business or whatever else on a little structure and then if a community gets bad you move your house to another place. It's sort of like if you're living in like a nomadic like step culture instead of a farmer culture if an area gets bad you can leave. Um I think that is ultimately good. The problem is if you live in a place where everybody just leaves if there's a problem then problems also happen. So like get to a certain scale.

So there's there's an investment that people have in in staying in a place that is important too. So yeah unsolved problem like the fundamental problems of human political science are are not solved by network states. Thank you. Um if uh we want to set up a network state, it's really complex. There are a lot of um component capabilities. What capabilities do you think would be a first uh minimal valuable uh state? You speak you spoke about education, but do you have like other ideas about what would be uh something? I think the

things that have been the most successful so far from a online first are either fans of a certain person like honestly Taylor Swift fans. If you just looked at Taylor Swift fans, there's like probably 50 hundred million of them worldwide. They will spend $10,000 to go to a concert in Argentina. I was there for a conference and like I wondered why all the hotels are full. Oh, there's a Taylor Swift conference going on. So there's a whole community of people that are into certain things that will go out and do things like that. So, the two models that I think work the best are you find some like celebrity or fan or or topic or some event that people really really like. There's also the honestly like the Burning Man community or things like that where there's a an event that people do every year growing

out of that and people that turning that into lifestyle. There's also other other bands. So, like cultural things are definitely one approach that have gone that way. Uh the other thing would be a pure online community where people are working. So certainly online games there are certain games that people are completely immersed in and like especially the multiplayer uh persistent games they're there's a like a chart where like if you look at Silicon Valley startups that were created by people that were members or founders of guilds in like World of Warcraft I think it's something like five 5% of the people within a certain 5-year period were from those things. So communities like that, games that have that kind of social dynamic built into them. And then uh I think a lot of discussion forums on the internet have also created their own

identity. Like certainly Cypher's list for me that back when the internet was was like millions of like lowdigit millions of people and this was a 10,000 person list. It was a major force. Uh there's also a lot of like the Bitcoin talk mailing list was early on in crypto and was like a major focus of how that evolved. So I think a lot of discussion forums like that. So tools like that and then groups like that that have periodic physical meetups or things like that is probably the fastest route. I think two minutes left. So, uh, Tim Draper supported a plan for six Californiaiforns where you'd have

Northern California, Southern California, Central Coast, and a couple others, but I was just wondering if you had any thoughts on that. Would it enable like a more efficient government? Would it ever go through something like that? Uh, I think US politics are very complicated. I live in Puerto Rico, so I'm a US citizen, but I live in Puerto Rico. And the best thing about living in Puerto Rico is I don't really need to care about US politics anymore because I can't vote and I have no other another interest in them. But yeah, I think I think in general I am a fan of devolving power as close to the individual people as possible. And a state that has 50 million people is more than the United States had at founding and more than the United States had until like 1830 or 1840 or something like that. So the size

of the biggest US states are really nations and they're not set up to govern themselves like nations. at the very least having a California with a regional government. The one of the biggest problems in California is like uh you end up with a city like San Francisco that has nine counties around it in the area. There's no real governance system at the at the nine county level. There's only governance at the city level or at individual cities or counties. So you can't build like a regional transit system that's any good or things like that. So there's a lot of problems with having the wrong scale of government. I think there's obviously Dunar's number like 150. There's probably a group where you have maybe 10,000 100 thousand people that make sense. Anything above that is not evolutionarily something that humans

really created. It's really something that economics drives. And economics like the the best book that probably I I would I might actually go far as far as to say this is the best book. But uh the sovereign individual book is essentially a book on how power structures and how military forces and everything else created uh government. Like because the 1900's military system depended on having the biggest possible military of a certain size of a certain force, you ended up with a very nationalistic like communism, US style liberal democracy, things like that were the biggest possible blocks of people that you could have and they created the most powerful military forces. That is the reason why we have systems like nation states that are hundreds of millions of people and uh

that's not necessarily the best for anything other than that particular facet. So yeah, but yeah, I I I'm very optimistic that there will be changes in the US someday, but I'm not optimistic on any particular change. But Trim Trim Draper is awesome. And there's also a cool network cities project that's happening near uh San Francisco, like in Travis Air Force Base area, where they're trying to build a new city from scratch, which is pretty cool. Cool. Okay, thank you. [Applause]