On July 4, Balaji Srinivasan released the first edition of his new book, describing his vision for the “net state”: a community organized around a specific vision of governing society, starting as an online club, but over time Eventually become powerful enough to seek political autonomy and even diplomatic recognition.
The cyber state can be seen as an attempt at the ideological succession of liberalism. Balaji has repeatedly praised The Sovereign Individual as an important read and inspiration, but has also strayed from its ideas in key ways, concentrating in his new work many of the impersonal and non-monetary aspects of social relations, such as morality and community. Cyber states can also be seen as an attempt to outline a broader political narrative for the crypto space. Rather than staying in its own corner of the internet, disconnected from the wider world, blockchain can serve as the core of the way human society is organized.
These are high promises, can cyber states deliver on them? Does the state of the network really offer enough benefits to be excited about? Whatever the merits of cyber states, does it really make sense to tie this idea to blockchain and cryptocurrencies? On the other hand, is there something vitally missing from this worldview? This post represents my attempt to understand these issues:
Table of contents
- What is network status?
- So, what types of cyber states can we build?
- What is Balaji’s political argument for the cyber state?
- Do you have to like Balaji’s political science to like cyber nation?
- What do cryptocurrencies have to do with cyber states?
- What do I like about Balaji’s vision?
- What aspects of Balaji’s vision do I disagree with?
- Non-Balaji Network Country
- Is there a middle way?
- What is network status?
What is network status?
Balaji gives several short definitions of what is network state. First of all, his definition is one sentence: a cyber state is a highly coherent online community with collective action capacity, which raises funds to expand its territory around the world, and finally obtains the diplomatic recognition of the state. This seems to be undisputed so far. Create a new Internet community online, materialize it once it grows big enough, and eventually try to negotiate some kind of status. People of almost any political ideology can find some form of cyber state they can support under this definition. But for now, let’s discuss his definition in a longer sentence:
A cyber nation is a nation of moral innovation, national awareness, recognized founders, collective action capacity, individual civilization, comprehensive cryptocurrency, a consensual government limited by social smart contracts, an archipelago of crowdfunded physical territories, virtual capital, and on-chain Census, demonstrating a large enough population, income and real estate footprint to gain some degree of diplomatic recognition.
Here, the concept starts to get assertive: we’re not just talking about the concept of online communities that have collective institutions and ultimately try to achieve on land, we’re talking about a particular Balajian’s vision of what a cyber state should look like. It is entirely possible that we support the general network state, but disagree with Balajian about what properties the network state should have. For example, if you’re not a “cryptocurrency convert,” it’s hard to see why a “synthetic cryptocurrency” is a fundamental part of the notion of network state.
Finally, Balaji elaborates this notion of Balajian network state in a longer form.
A key point that Balaji emphasizes in many chapters is that any successful new community needs an ethical component.
Paul Johnson points out that early American religious colonies had a higher success rate than their for-profit colonies, and in a startup society, you don’t ask people to buy a product (which is an economical, individualistic pitch), but to join a community ( It’s a cultural, collective sell). The paradox of religious communes’ commitment is key here: the religious communes that demand the most from their members are the most durable.
This is where Balajismism clearly diverges from the more traditional neoliberal-capitalist ideal of defeated, apolitical, passionless consumerism. Unlike grassroots liberals, Balajis does not believe that everything can be “just a consumer product.” Instead, he greatly emphasizes the importance of social norms for cohesion and a literal religious attachment to the values that differentiate a certain network state from the outside world. As Balaji puts it on this podcast, most liberal attempts at microstates right now are like “Zionism without Judaism,” which is a key reason why they fail.
In fact, it was at the heart of Antonio Garcia Martinez’s critique of Balajis’ early sovereign-personal thought, in which he praised the tenacity of Cuban exiles in Miami, who “perhaps irrationally, this is our new homeland, this is Our final stand”.
This city, like any city, has foreign enemies and needs to defend against foreign attacks. Therefore, it requires a courageous and public-minded class of guardians who are willing to sacrifice their material desires and desires for the common good. Socrates did not believe that courage and public heart can arise from enlightened calculations of self-interest. Rather, they must be rooted in thymos, in the just pride of the guardian classes over themselves and their city, and in their anger at the potential irrationality of those who threaten it.
Balajis’ argument in Cyber Nation, as I interpret it, is as follows: We need political collectives that are not only bound by economic interests but also by moral forces, but we do not need to insist on the specific political collectives we have today, which have a large Defects are becoming less and less representative of people’s values. Instead, we can and should create new and better collectives.
So, what kind of network state can we build?
Balajis outlines some thoughts on the state of the web, which I will condense into two key directions: lifestyle immersion and innovation that supports technology regulation.
An example of Balaji’s immersion in lifestyle is a network state organized around wellness. Next, let’s make an example that requires a cyber archipelago (with a physical footprint), but not a full cyber state (with diplomatic recognition).
Beginning with the history of the USDA food pyramid, this geek has provided cover for the global epidemic of corporate glycation and obesity. . Organize a community online to crowdfund properties around the world, like apartment buildings and gyms, and maybe eventually even alleys and small towns, and you might take an extreme sugar-free approach, banning processed foods at the border and sugar, thus implementing a kind of “Keto Kosher”.
You can imagine a variant of this entrepreneurial society, like the “meat-eating community” or “Paleo people.” These will be competitive entrepreneurial societies in the same broad field, an iteration on a theme. If successful, such a society may not stop at sugar. It can set cultural defaults for fitness and sports. Strictly speaking, this does not require any diplomatic recognition, or even political autonomy — which could negotiate lower health insurance costs and Medicare taxes for its members in the long run. What is the need for autonomy? How about a free zone for medical innovation?
Now let’s take a more complex example, which requires a complete network of countries and diplomatic recognition, which is the medical sovereign zone, the FDA-free society. You start your entrepreneurial society with a history of Henninger’s FDA-induced drug lag and Tabarrok’s FDA intervention on so-called “off-label” prescriptions. You point out how many people have been killed by its policies and make it clear to all new members why your cause of medical sovereignty is just…
If it is outside the US, your startup will work under the auspices of Malta’s Food and Drug Administration for a new biomedical regime. If within the US, you need a governor who has declared biomedical asylum. That is, just as a sanctuary city declares it will not enforce federal immigration laws, a biomedical sanctuary state will not enforce FDA statutes.
People can come up with more examples for these two categories, we can have an area where you can walk around naked, both guaranteeing your legal right to do so, and helping you feel better by creating an environment where many other people can be naked as well. Comfortable. Alternatively, you could have an area where everyone can only wear basic plain clothes, and people could create a friendly community for cryptocurrency users, require every store to accept cryptocurrency, and require NFTs to enter the area.
What all these examples have in common is the value of owning a physical area where the unique rules of the cyber state are enforced. Of course, you can alone stick to eating only at healthy restaurants and research each restaurant carefully before going there. However, with an exclusive piece of land, you can guarantee that anywhere on the land will meet your standards. Of course, you can lobby your local government to tighten health and safety regulations. But if you do, you risk friction with those with vastly different preferences, and you risk shutting the poor out of the economy, an online state offers a gentler approach.
What is Balajis’ big political case against cyber states?
A curious feature of the book that readers will notice almost immediately is that it sometimes feels like two books: sometimes, it’s a book on the concept of the cyber state, and other times, it’s an exposition of Balajis’ political theory. Balajis’ political theory is in many ways remarkable and interesting. At the beginning of the book, he lures readers with some tidbits.
- Germany sponsored Vladimir Lenin, the New York bankers sponsored Trotsky’s incitement to the Russian Revolution, and American propaganda from Wall Street and John Reed helped both Lenin and Trotsky’s revolution. In fact, Reed was so useful to the Soviets — misleading about the nature of the revolution — that he was buried in the walls of the Kremlin. Surprisingly: the Russian Revolution was not entirely accomplished by the Russians.
- The Oakes-Sulzberger family, who owned the New York Times Company, owned slaves, a fact that was not reported in the 1619 report.
- Ninety years ago, New York Times reporter Walter Duranty won a Pulitzer Prize for helping the Soviet Union starve Ukraine, and 90 years ago, The New York Times decided to turn “to stand with Ukraine.”
You can find a bunch of examples in the chapter titled “If the news is fake, imagine real history” that seem to be haphazard when in fact, in a way, they are intentional: the goal is to put readers in the first place Detach from their existing world model so they can start downloading Balajis’ own thought model.
But soon, Balaji’s example did start to point to some particular themes: the deep distaste of the American left for the New York Times, and the love of freedom on the American right (in the case of the Bitcoin extremists) and their love for cooperation And order combined with appreciation. Next, we analyze Balaji’s overview of political adjustment in recent history, and finally we arrive at his core model of politics today.
The NYT team basically runs the US, the BTC team (referring to actual bitcoin extremists and the American right in general) has some positive values, but their outright hostility to collective action and order means they are incapable of building anything . The CCP team can build, but they are building a utopian surveillance state that most of the world would rather not live in. And all three teams are too nationalistic: they see things from their own country’s point of view, while ignoring or exploiting everyone else. Even though these teams are theoretically internationalist, the specific way in which they have their values makes them unlikable outside a small part of the world.
In Balajis’ view, the cyber state is a “decentralized center” that can create a better alternative. They combine the BTC team’s love of freedom, the moral energy of the team, and the organization of a centralized team, and give us the best of all three, avoiding the worst parts. This is Balajis politics in a nutshell, and it’s not trying to justify the cyber state with some abstract theory. Rather, it is an argument that positions the cyber state as a response to the specific political situation of the world in its current place and time.
Do you have to agree with Balajis’ political science to like cyber states?
There are many aspects of Balajis politics that won’t convince many readers if you consider “Symbolic” to be an important movement to protect the underprivileged, i.e. it is basically just a mask for the will to power of the professional elite. If you’re worried about the plight of a small country like Ukraine, threatened by aggressive neighbors and desperate for outside support, you won’t be persuaded by Balajis’ content.
I do think that you can support cyber states while disagreeing with some of Balajis’ reasons. But first, I should explain why I think Balajis feels that his view of the problem is the same as his view of the solution. Balajis has long been passionate about roughly the same issues; you can see a similar outline of the narrative in his 2013 speech on “Final Exit,” which is to defeat institutional hardening in the United States through technology and exit methods that the cyber state is The latest iteration of his proposed solution.
Talking about this is important for several reasons.
To illustrate that the cyber state is the only way to protect liberty and capitalism, if the United States or the “democratic liberal order” is good, then there is no need for an alternative; we just have to redouble our efforts for global coordination and the rule of law. But if the United States is in irreversible decline and its adversaries are on the rise, then things will be very different. Cyber states can maintain liberal values in an unfree world, while hegemonic thinking cannot.
Many of Balajis’ readers are not in the United States, and the world of a cyber nation is inherently globally distributed — and that includes many who are skeptical of the United States. Balajis himself is Indian and has a huge Indian fan base. In India and elsewhere, many people think that America is not the guardian of the liberal world order, Balajis wants to make clear that you don’t have to be pro-American to be liberal.
Many segments of the American left-wing media are increasingly hostile to the cryptocurrency and tech industry. Balajis expects the authoritarian left-wing part of the New York Times team to be hostile to the cyber state, but that’s not the only way to see the big picture. What if you do believe in social justice values, the New York Times, or the importance of America? What if you value governance innovation but have a more moderate view of politics? Well, you can look at this from two perspectives.
Cyber Nation as a coordinated strategy, for example, anything that happens in American politics to improve equality is only good for the population living in the United States. The First Amendment does not apply outside the borders of the United States. Governance in many rich countries is rigid, and we need some way to try more innovations in governance. Cyber Nation can fill this void. A country like the US can host a network country that attracts people from all over the world. Successful cyber states can even serve as a policy model for countries to adopt. Also, what if the Republican Party wins in 2024 and ensures decades of power, or if America collapses? You wish there was an alternative.
Withdraw from the cyber country, if everyone’s first instinct is to flee to other countries when faced with domestic problems, then there will be no one left to protect and defend the country itself. Ultimately, the global infrastructure on which cyber nations depend will suffer.
Both of these viewpoints have many disagreements with Balajis’ political science. So, in order to argue for or against the cyber state of Balajis, we will eventually have to talk about cyber state. My own opinion is friendly to cyber states, although there are many caveats and differing ideas about how cyber states work.
What do cryptocurrencies have to do with cyber states?
There are two kinds of docking here: one is the spiritual docking, that is, the idea of ”Bitcoin becomes the banner of technology”, and the other is the practical docking, that is, the specific way that the network country can use the blockchain and encrypted tokens. In general, I agree with both these arguments — I think Balaji’s book could articulate them more clearly.
The cryptocurrency of 2022 is an important standard-setter for internationalist liberal values that are hard to find in any other social force still strong today. Blockchain and cryptocurrencies are global in nature. Most Ethereum developers are outside the US, living in distant places like Europe and Australia. NFTs offer unique opportunities for artists in Africa and the rest of the Global South. Argentines have made their mark on projects such as Proof of Humanity, Kleros and Nomic Labs.
At a time when many geopolitical actors are increasingly serving only their own interests, the blockchain community continues to stand for openness, freedom, censorship resistance, and trusted neutrality. This further enhances their international appeal: you don’t have to love American hegemony to love blockchains and the values they represent.
However, if there is no practical use value of the blockchain to cooperate with it, the spiritual cooperation is meaningless. Balaji gives a plethora of blockchain use cases. One of Balaji’s favorite concepts is the idea of a blockchain as a “ledger of record”: people can time-stamp events on-chain, creating a globally provable log of humanity’s “micro-history,” and he goes on to cite other examples .
- Zero-knowledge technologies like ZCash, Ironfish, and Tornado Cash allow on-chain proofs of what people want to expose.
- Blockchain name systems, such as the Ethereum Name Service (ENS) and Solana Name Service (SNS), attach identities to on-chain transactions.
- A company registry system allows businesses to abstract on-chain representation above a purely transactional level, such as financial statements, or even fully programmable corporate equivalents such as DAOs.
- Cryptographic certificates, Non-Fungible Tokens (NFTs), Non-Transferable Tokens (NTFs), and Soulbounds allow non-financial data such as diplomas or endorsements to be represented on-chain.
But what does all this have to do with the state of the network? Specific examples of crypto cities: issuing tokens, issuing CityDAO-style citizen NFTs, combining blockchain with zero-knowledge cryptography, doing secure privacy-preserving voting, and many more. Blockchains are the Lego building blocks of crypto-finance and crypto-governance: they are a very effective tool for implementing transparent intra-protocol rules to govern public resources, assets, and incentives.
But we need to go a step further. Blockchain and network state share the property that they are both trying to “create a new root”. The company is not a root: if there is a dispute within the company, it will eventually be resolved by the national court system. The blockchain and network countries are trying to become new roots. This doesn’t mean that some absolute “cry, no one can catch me” ideal of sovereignty is needed, maybe only ~5 countries with highly self-sufficient national economies and/or nuclear weapons can really achieve it. Individual blockchain participants are of course vulnerable to state regulation, and cyber states are even more so. But blockchains are the only infrastructure systems that attempt to do ultimate dispute resolution at a non-state level (either through on-chain smart contract logic or through free forks), making them ideal infrastructure for cyber states.
What do I like about Balaji’s vision?
Given that pure “private property only” liberalism inevitably suffers from problems such as its inability to fund public goods, any successful pro-liberty program in the 21st century must be a hybrid, and here is a compromise Ideas, at least 80% of the problems, so independent individual initiatives can solve the rest. This could be some draconian measure against the concentration of economic power and wealth (perhaps an annual Harberger tax on everything), it could be an 85% Georgian land tax, it could be UBI, it could be forcing companies big enough to be internally democratic , or any other suggestion. Not all of them work, but you need something drastic to have any chance.
Generally, the idea of compromise I’m used to is a leftist idea: some form of equality and democracy. On the other hand, Balaji’s idea of the “great compromise” is more right-wing: local communities with shared values, loyalty, religion, physical environment structured to encourage individual discipline (“Keto kosher”) and hard work. These values are implemented in a very liberal and tech-forward way, not around land, history, nation and country, but around cloud and personal choice, but they are still right-wing values. This way of thinking is foreign to me, but I find it fascinating and important. Stereotypes of “rich white liberals” are at risk if they ignore this: these more traditional values are quite popular even among some minorities in the United States, and even more so in places like Africa and India , and this is where Balaji is trying to build his foundation.
But does the state of the network really interest me?
The immersive cyber state of the health-focused lifestyle of “Keto Kosher” is certainly one that I’d like to live in. I could just spend time in a city with a lot of healthy stuff, and even the motivating aspect of being around other people with similar goals sounds very appealing. But what’s really interesting is governance innovation: harnessing the state of the network to organize in a way that’s practically impossible under existing regulations, there are three ways to explain the underlying goals here:
- Create new regulatory environments that allow their residents to have priorities that differ from mainstream preferences: for example, areas where “anyone can walk around naked”, or areas that implement different tradeoffs between safety and convenience, or allow more spirituality Areas where active substances are legalized.
- The creation of new regulators may be more efficient in serving the same priorities as the status quo. For example, instead of improving environmental friendliness by regulating certain behaviors, the Pigovian tax could be directly levied. Instead of requiring licenses and regulatory pre-approvals for many acts, you can ask for mandatory liability insurance. You can use two-dimensional voting to govern, and two-dimensional funds to fund local public goods.
- Fight against general regulatory conservatism by increasing the chances that certain judiciaries will allow you to do anything specific. For example, institutionalized bioethics is a conservative enterprise, 20 deaths from a medical experiment error is a tragedy, but 200,000 deaths from epidemics may seem to some to be a statistic. Allowing people to choose to accept a state of the network with a higher level of risk could be a successful strategy against this.
Overall, I think there is value in all three.
- Large-scale institutionalization can make the word more liberal at the same time, while making people comfortable with a higher level of restriction on certain things, knowing that if they want to do something that isn’t allowed, they can go to other areas and do it. More broadly, I think there is an important idea hidden in : while the “sociotechnical” community has many good ideas around better governance, there is a lack of emphasis on categorizing better sociotechnologies. We don’t just want to take the existing graph of social relationships as inherent and find better ways to reach consensus within it. We also want to reform the social network itself, bringing people closer to others who are more compatible with them, to better allow different lifestyles to maintain their own uniqueness.
- Exciting because it addresses a major problem in politics: Unlike startups, where early-stage startups look a bit like a miniature version of later-stages, in politics, early-stages are a game of public discourse, choosing Stuff is often very different from what actually works. If governance ideas are often implemented online, then we move from an extroverted “speaking liberalism” to a more balanced “doing liberalism,” where ideas rise and fall depending on how they operate on a small scale actual effect. We could even combine  and : create an area for those who want to automatically participate in new governance experiments every year as a way of life.
- A more complex ethical question of course: do you see the paralysis and gradual move towards authoritarian global government as a problem, or the bigger problem of someone inventing an evil technology that will destroy us all. I’m generally in the first camp; I worry about the West falling into a kind of low-growth conservatism, and I like how imperfect coordination between nation-states limits the enforceability of things like global copyright laws, the possibility of which is aided by future surveillance technologies , the whole world will enter a terrible political equilibrium that is highly self-executing but cannot escape.
What aspects of Balaji’s vision do I disagree with?
There are four areas that worry me the most.
- Why does Cyber Nation need a proven founder to be the core?
- What if the cyber state ends up serving only the rich?
- Mere “exit” is not enough to stabilize global politics. So what would happen if quitting was everyone’s first choice?
- What about more general negative global externalities?
Throughout the book, Balaji insists that the founders are in a cyber state (or, rather, a startup society: you create a startup society, and if you’re successful enough to get diplomatic recognition, it becomes a cyber state) Importance, Balaji explicitly describes the founders of start-up societies as “ethical entrepreneurs.” But as a startup founder, you’re not a tech entrepreneur telling investors why this new innovation is better, faster, and cheaper. You are an ethical entrepreneur telling potential future citizens a better way to live, telling them what is wrong in the existing world, and your community is righting it.
The founders crystallize moral intuition and what has been learned from history into a philosophy, and those whose moral intuition aligns with that philosophy coalesce on the project. This makes perfect sense in the early stages — although it’s definitely not the only way how a startup society can emerge. But what happens in the later stages? Mark Zuckerberg, as the core founder of the facebook startup, may be necessary. But Mark Zuckerberg is in charge of a multi-billion dollar (billions of users, in fact) company is an entirely different matter.
It’s good for small things to be gathered together, but terrible for extremely large undertakings to be gathered together. And given the reality of network effects, the option to exit is not enough. In my opinion, the question of how to settle out of the founder’s control is important, and Balaji has spent too little effort on that. Recognized founders are included in the definition of the Balaji network state, but the roadmap to broader participatory governance is not.
What about everyone who is not wealthy?
Over the past few years, we’ve seen many examples of governments around the world being explicitly more open to tech talent. There are 42 countries that offer digital nomad visas, there are tech visas for France, Singapore’s crypto-friendly policies, and many others. That’s a boon for technologists and the wealthy, who can often escape the world’s systemic discrimination against citizens of low-income countries by spending hundreds of thousands of dollars on another passport. But what about ordinary people? What about the ethnic Rohingya who face extreme conditions in Myanmar, most of whom have no way to enter the US or Europe, let alone buy another passport.
Here we see a potential tragedy of the concept of the cyber state. On the one hand, I see that going abroad can be the most viable strategy for global human rights protection in the twenty-first century. What would you do if another country was oppressing a minority? You can do nothing. You can sanction them, you can try to hack. Quitting is a more humane option. People who have suffered human rights abuses can simply leave for friendlier countries, and coordinated leaving in droves means they can leave without sacrificing the communities on which they depend for friendships and economic livelihoods. And if you’re wrong, the government you’re criticizing isn’t actually that bad, then people don’t leave, it’s all good, no hunger or bombs, it’s all good.
What is the answer? To be honest, I didn’t see it. One argument in favor of cyber states is that they can be located in poor countries and attract rich people abroad, then help the local economy. But that doesn’t help people in poor countries looking to get out, where old-fashioned political action within existing countries and relaxation of immigration laws seem to be the only option.
nowhere to run
After Russia’s February 24 invasion of Ukraine, Noah Smith wrote an important piece on the moral clarity that this invasion should bring to our minds. One particularly compelling title, “Nowhere to Run,” is quoted as follows:
While “exit” works on a local level — you might be able to move to Austin or another tech city if San Francisco is too poorly functioning — it simply won’t work on a national level. In fact, those crypto-rich who move to countries like Singapore or territories like Puerto Rico still rely heavily on the infrastructure and institutions of developed countries. Russia is making it clearer that such a strategy is doomed because in the end there is nowhere to run. Unlike previous eras, the arms of great powers are long enough to reach anywhere in the world.
So, what about those negative external factors?
If we had a hundred poorly regulated innovation labs around the world, this could lead to a world that is harder to prevent. This raises the question: Does believing in Balajiism require believing in a world where negative externalities are not too much of a problem? Such a view would be contrary to the “fragile world hypothesis” (VWH), which argues that as technology advances, it becomes increasingly easy for one or a few crazy people to kill millions, possibly requiring global authoritarian surveillance to prevent extreme Pain and even human extinction.
One way out might be to focus on self-defense techniques. In a world of cyber states, we cannot prohibit gain-of-function research, but we can use cyber states to help the world along a path with really good HEPA air filtration, far-UV light, early detection infrastructure and a very A rapid vaccine development and deployment pipeline could defeat not only viruses, but worse biological weapons as well. Self-defense technology may be an undervalued area of funding focus. But relying on this alone is not realistic. Transnational cooperation is required, so we do want a world where even though cyber states have more sovereignty than today’s intended communities, their sovereignty is not absolute.
Non-Balaji Network Country
Reading Cyber Nation reminds me of a different book I read ten years ago. Economic Democracy in the Twenty First Century by David de Ugarte. Phyles talks about a similar idea of transnational communities organized around values, but with a more left-leaning focus: it assumes that these communities will be democratic, inspired by the online communities of the 2000s and the cooperatives and workplaces of the 19th and 20th centuries. Inspired by democratic thought. We can see these differences most clearly by looking at de Ugarte’s theory of formation. Since I’ve spent a lot of time quoting Balaji, I’ll make a fair statement from David de Ugarte.
The blogosphere is a sea of identities and conversations, from which the great social digestion periodically distills stable groups with their own contexts and specific knowledge, in constant cross-breeding and change. These communities of dialogue, which develop to a certain extent, play a major role in what we call digital Zionism: they begin to settle into reality, generating mutual knowledge among their members that makes them useful to them More identity-important than the traditional imagined community (nation, class, party, etc.), as if it were a real community (group of friends, family, guild, etc.).
A few identifiable and dense groups in the dialogue network begin to generate their own economic metabolism, and with it a unique Demos with the goal of nurturing the autonomy of the community itself. These are what we call the new Venetian network. They were born in the blogosphere, the successor to the hacker work ethic, and operate in a conceptual world that leans toward the economic democracy we talked about in the first part of this book. Unlike traditional cooperativism, their local ties do not create identity as they do not come from a true proximity-based community.
We see some of Balaji’s ideas: a shared collective identity, but formed around values rather than geography, that started as a discussion community in the cloud, but then materialized to take over much of economic life. De Ugarte uses the exact same metaphor as Balaji (“Digital Zionism”) but we also see a key difference: Balaji’s point is: “Digital Zionism” is a people-centred philosophy.
But we also see a key difference: There is no single founder. Rather than a startup society formed by the actions of one person, a philosophy that combines intuition and thought strands into a coherent, formally documented philosophy, a phyle begins as a conversational network of blogospheres and then directly becomes a group, Do more and more over time — while maintaining its democratic and horizontal nature. The whole process is more organic and not at all guided by one’s intentions. Of course, the immediate challenge I see is the incentive problem inherent in this structure. It might be unfair to summarize Phyles and The Network State, where The Network State tried to use the blockchain of the 2010s as a model for how to reorganize human society, while Phyles tried to use the open source software communities and blogs of the 2000s as how to reorganize A model of human society. Open source has under-incentivized failure modes, and cryptocurrencies have over-incentivized and over-centralized failure modes. But it does suggest that some intermediate way should be possible.
Is there a middle way?
My verdict so far is that cyber states are great, but they are far from a viable compromise idea that can really plug all the holes and build the kind of world I and most of my readers want to see in the 21st century . At the end of the day, I do think that we need to introduce more democracy and some kind of compromise oriented towards mass coordination in order for the cyber state to be truly successful.
Here are some of my big tweaks to Balajism:
Founder startup is OK (though not the only way) but we really need a roadmap to decentralize power to the community, many founders eventually want to retire or start something new, we need to prevent the state of the network from crashing or happening This situation has sometimes led to the failure of decentralization. Part of this process is some kind of constitutional guarantee of exiting the community: as the state of the network moves into higher levels of maturity and scale, more power from community members is automatically considered.
Prospera tried something similar. As Scott Alexander sums it up:
Once Próspera has 100,000 inhabitants (if the experiment is very successful), they can hold a referendum and a 51% majority can change anything in the charter, including kicking HPI out entirely, becoming a direct democracy, or rejoining other Honduras nation.
Another part of this process, and what I have learned growing up with Ethereum, is explicitly encouraging wider participation in the ethical and philosophical development of the community. Ethereum has its Vitalik, but it also has its Polynya, how will your startup community recruit its top ten Polynyas?
Cyber Nation should be governed by some non-token driven governance
Token-driven governance is chaebol-like and vulnerable; I’ve written about it many times, but it’s worth repeating. Ideas like Optimism’s soulbound and per-person citizen NFTs are key here. Balaji has acknowledged the need for non-fungibility (he supports token locking), but we should go a step further and more explicitly support governance that is not just shareholder driven. It would also have the beneficial side effect that more democratic governance is more likely to align with the outside world.
Cyber states promise to make themselves friendly through external representation in governance
An under-discussed idea in the rationalist and friendly AI community is functional decision theory. It’s a complex concept, but the powerful core idea is that AI can coordinate better than humans to solve the prisoner’s dilemma that humans often fail, by making verifiable public commitments to its source code. An AI can rewrite itself to have a module, preventing it from tricking other AIs with similar modules. Such AIs would cooperate with each other in the Prisoner’s Dilemma.
As I pointed out years ago, DAOs have the potential to do the same thing. They can have a clear governance mechanism and be more friendly to other DAOs with similar mechanisms, the network state will be governed by the DAO, and this will also apply to the network state. They can even work on governance mechanisms that promise to take the broader public interest into account (e.g., 20% of the votes could go to residents of a randomly chosen host city or country) without having to follow specific complex rules about how they should take into account How these benefits are distributed. Cyber states that do so clearly have friendlier policies and may be a better world.
I want to see entrepreneurial societies exist along these types of visions, I want to see immersive lifestyle experiments around healthy living, I want to see crazy governance experiments where public goods are funded by quadratic money, I want to see To more technical experimentation, accepting a higher level of risk, and I think blockchain-based tokens, identity and reputation systems, and DAOs could be a good option.
At the same time, I am concerned that the vision of a cyber state in its current form risks meeting the needs of only the wealthy, while many of the less well off will be left in the dust. Arguably what works for cyber states is their internationalism: inequality between countries accounts for two-thirds of global inequality, and inequality within countries accounts for only one-third. But that still left many in all countries, and the vision didn’t do much. So we need something else too — for the poor around the world, for the Ukrainians who want to keep their country from being invaded, and for all the other groups that don’t have immediate access to cyber countries.
Cyber Nation, with a few modifications to drive more democratic governance and positive relationships with surrounding communities, is a vision I can support.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/vitalik-what-is-the-cyber-state-that-crypto-converts-yearn-for/
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