03 – From 1,000 Startup Communities to 1 Network State
Originally aired on September 18, 2023
Founder, Investor, and Author
Balaji Srinivasan, the Founder, Investor, and Author of The Network State, discusses the possibility of starting new countries as a continuation of the entrepreneurial spirit seen in the creation of companies, communities, and currencies. He introduces the concept of a network state, which is a decentralized country similar to how Bitcoin operates as a decentralized currency. Srinivasan explains that a network state is a distributed country with a population, income, and real estate footprint spread around the world but unified conceptually. He argues that it is possible to start new countries by building traction and eventually attaining diplomatic recognition. Srinivasan highlights the value of network states for individuals seeking alternative options to failed states and the potential profitability of such ventures.
The concept of a network state
- A network state is a decentralized country that is distributed around the world but unified conceptually.
- It has the population, income, and real estate footprint of a traditional nation-state but is not bound to a specific physical location.
Building a network state
- Starting with a small group of people, a network state can gradually grow by recruiting more individuals and coordinating activities.
- Crowdfunding, purchasing properties together, and building a cohesive crypto tribe are some examples of how network states can be formed.
The size of network states
- A network state with a population of 1.7 million people would fall within the range of small countries.
- Most countries have populations of less than 10 million people, with many having less than one million.
Attaining diplomatic recognition
- With sufficient traction and persistence, network states can obtain diplomatic recognition from other countries.
- By inking deals and forming partnerships, network states can establish their legitimacy and gain recognition over time.
The need for network states
- Network states provide alternative options for individuals facing problems such as inflation, riots, and food shortages in their current countries.
- They cater to both the powerless, who seek a way out of failed states, and the power users who want to push boundaries and create pro-technology states.
The profitability of network states
- Network states have the potential to monetize on a per-person level, offering services such as Discord subscriptions and rent.
- By materializing decentralized autonomous organizations (DAOs), network states can create value for users and foster a sense of community.