Bankless - 131 - Rise of the Network State | Balaji Srinivasan

Episode Date: August 8, 2022

✨ DEBRIEF ✨ | Ryan & David's Unfiltered Thoughts on the Episode: https://shows.banklesshq.com/p/debrief-rise-of-the-network-state  Balaji Srinivasan is an investor, founder, and Former CTO of Coinbase and GP at a16z and author of The Network State, which will be the main focus of the podcast today. The Network State explores ideas surrounding digital communities and the future of how we coordinate as a species. A startup society fosters the emergence of network unions, which evolve into a network archipelago—eventually calcifying into the network state. As we muse about the fate of human systems, we explore mental models for understanding the digital revolution and how we can allow coordination to thrive. ------ 📣 Forta | Help Make Web3 a Safer Place https://bankless.cc/Forta ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🌴 MAKER DAO | DECENTRALIZED LENDING https://bankless.cc/MakerDAO  🔐 LEDGER | SECURE STAKING https://bankless.cc/Ledger  ------ Topics Covered: 0:00 Intro 6:19 Common Denominators 8:50 Micro vs. Macro History 15:15 The Network State 19:05 Online Communities 23:50 Nation vs. The State 36:20 Why A Nation State 40:18 The One Commandment 1:02:44 Being Inside the Network State 1:08:00 Bankess x the Network State 1:13:38 What’s the Incentive? 1:19:30 Violence’s Role 1:33:48 Non-Wealthy Critique 1:38:53 Everyone Joins the Network State 1:44:20 Network State Action Items 1:48:46 Closing & Disclaimers ------ Resources: Balaji https://twitter.com/balajis  The Network State https://thenetworkstate.com/  Dashboard https://thenetworkstate.com/dashboard  Vitalik’s Review https://vitalik.ca/general/2022/07/13/networkstates.html#what-is-a-network-state  One Commandment https://thenetworkstate.com/the-one-commandment  FDIC Insured Bank Charts & Fintech Tweets https://twitter.com/balajis/status/1351068210930601984  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. 

Welcome to bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, we have a fantastic episode with none other than Bellagie, who is a pleasure to talk to. He's one of those people where I listen to every podcast I can that he is speaking. He's kind of like Vitalik in that category. And the premise of this episode is the rise of what he calls the network.

network state. This is a cryptography empowered country. We're going to dig into this. But the tantalizing prospect is this. What if online communities could use crypto to form their own nations? Belaji says not only is this possible, it's actually the way forward for humanity. The network state as the successor to the nation state that we all live in today. So a few things to take out of this episode. Number one, the inflation, the wars, the protests, the populism we see. Belashi goes through. the common denominator to all of these things. Number two, how a Discord community can launch a country. We go through an example for the bankless nation, what that might look like in Belaghi's framework. Number three, the one commandment, Belaghi says, for launching a network state, the thing you

absolutely have to have. Number four, countries in the cloud, let's talk about some of the critiques we do that in this episode, including, are these cloud countries just for the rich? And number five, some action items, as always, to walk away with. What do you do if you want to join one of these digital societies. Where are they? How can you start one? David, fantastic episode. Love these conversations with Belagia. We got to do this more. We had Belagia on back in November of 2020, which was really at the very beginning of his thinking around this like network state idea. And it's been lovely to see him fast forward almost two years later and just seeing how much it's been refined or being like sharpened and him being able to articulate with much more clarity.

I really, really enjoyed that. And this is a concept that we are super aligned with Belagia. This is the concept of blockchains or chains or tokens or online communities being enabled to produce currencies and then organize in other ways is something that has captured my attention as one of the early promising ideas that crypto can bring to the table is we can provide the structure for 10,000 nation states, but not states, just nations, to exist in the cloud and start to organize around new sets of ideals rather than just the geographic boundaries as to where humans and people tend to be living, but instead around ideals or values or shared goals, first in the cloud, but perhaps later also in real life. Ryan, if you were a part of a network state,

what would be the shared value that you would want to be a part of? David, I'd have to say going bankless would be a shared value. Decentralization. Perhaps we should create a bankless nation, if you will, Ryan. Sounds like a good idea. And we actually explored the Laji how to do that. As I mentioned, the cool thing about this, of course, is crypto technology is at the bottom of this, the network states, so cryptocurrency, of course, but social smart contracts to enforce governance, crowdfunding, on-chain consensus. It's all here in Belaghi's ideas. So we're going to dig right into this. There's some visuals that accompany this episode as well. So a lot. Good news, you can actually see the visuals on Spotify now. Spotify as partnered with bank lists to do video.

So we're bringing Belagogy to you in video format. You can get all those videos if you're subscribing via Spotify. Also on YouTube, catch it there. We're going to get right to our with Bellagie, but before we do, we want to tell you about these fantastic tools for going bankless. The Brave Browser is the user-first browser for the Web3 internet, with over 60 million monthly active users. And inside the Brave browser, you'll find the Brave Wallet, the secure, multi-trained crypto wallet built right into the browser. Web3 is freedom from big tech and Wall Street, more control and better privacy, but there's a weak point in Web3, your crypto wallet. And most crypto wallets are browser extensions, which can easily be spoofed. But the Brave

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everywhere there is defy. So follow Maker on Twitter at MakerDAO and learn from the oldest and most resilient Dowen existence. Bankless Nation, we are super excited to introduce you yet again to Belaghi Stranivasin. He is an investor. He's a founder. He's the former CT of Coinbase, general partner of A16C, and more recently, the author of The Network State, which will be the focus of our podcast today. Belagie, welcome back to Bankless. Thanks for having me. You know, it's been almost two years since we last had you on, and things have gotten weirder since then. All right, we've got inflation, which is now, household topic, global macroeconomic topic. There's a war in Europe, protests over food and energy,

increasing distrust in our institutions, our election process, our central banks. There's this increasing rise of populism that has just trended upwards. Is there a common denominator between these things, Belaghi? Can you draw a line between all of these things? Yeah, so my role model is, I mean, many other people have talked about this, but the ending, of the post-war order. So you have the post-war order of 1945 or arguably the extension after 1991 with the end of the Cold War. And it's that at the same time as, you know, the rise of the internet and an industrial revolution that, you know, with automation and the rise of crypto and the rise of China and the rise of India and, you know, the relative decline of the West and so on and

so forth. Like, there's many things that are all just going like this and this at the same time, right? So, yeah, I think, like, that older world is ending and a new world is beginning. And, you know, all the Top Gun Infinity remakes and the, you know, 70-something-year-old presidents and the geriatric Congress and all this stuff is sort of an attempt to kind of hold on cling to the past as it's kind of slipping away and people don't have a vision yet for a positive future. And insofar as they do have vision for the future, it's often a black mirror style dystopia or what have you because they envision the future getting worse. And so a big part of the book is on potentially a way that you or one personally can make the future better that is not simply trying to prop up or fix this

in my view failing, broken, hard to fix, if not impossible to fix existing system, but to build something better. I really like that analogy about the state of culture when it comes to our movies. Like, we're bringing forward action heroes from like the 50s and 60s. And also you can hear it in our political slogans, right? Like make America great again or build back better, depending on like which color that you align with. We're trying to like restore the past and we're fearful, perhaps xenophobic of the future. But I think there's a reason why Belagia, you are a crypto person is because of all the populations, all the people, all the communities out there, the crypto people of the world are one of the few populations that's actually optimistic of the future. So it sounds like your solution for this is to not try and restore the past. That tends to not work in history. But there's a quote from, I think, Winston Churchill that I always love, where if you find yourself going through hell, keep going. Like, don't stop. Break on through to the other side. Is that the future that you are trying to herald for us here? I'd say 75% yes. Let me give the 25% that is different, right?

25% is I am not anti, like, okay, so for example, let me motivate this in one way. Have you used undo in any app? No. You've never used undo in any app. Oh, command Z? Oh, every single day. Command Z.

Okay, that's what I think of, command Z. I was like, whoa, this guy never misses a keystroke, right? Okay. All right. So you've used undo. Are your programmer or are you used Git revert? No, no, I have not. Okay.

So get revert is basically like, you probably, you know, the concept, somebody introduced a bug and they have to revert it and go back, you know, right? So go back to the old state. If you think about undo, you think about previous file versions, you think about backup and restore, you think about, you know, that kind of stuff. It actually is useful sometimes to rewind, to move in a different direction. It doesn't mean rewind to go, quote, back to the past and stay there, but rather we took a wrong turn. And so we need to take this other turn, right? And if you agree with that on a microscale of undo, right, you actually probably agree with it on a mezzanine scale because companies actually spend a lot of money on backup and restore, right, to be able to back up your data from a week or a month ago, right? And in fact, blockchains are about an indelible history in many ways.

That's a big part of their value proposition, like property that can't be seized from you has that past, that history, that base. right this is what I call the relationship between micro history and macro history micro history is a history of measurements on a system macro history is like you know we think of as history like uh you know pottery shards and records of ancient Rome but those things relate with crypto history because it's the um it's got the aspects of microhistory like individual measurements but it's the scale of an entire society because it's the entire economy and it's every communication and it's all the users we're just built like history is beginning in a sense in, you know, the year, we're in year 13, Ano Satoshi, okay? Like the true start of

written history was maybe, you know, thousands years ago, the true start of crypto history was 13 years ago, okay? With that kind of framework, you know, things don't necessarily always just get better, you know, uniformly. Things are more complicated in that prices sometimes go down before they come back up. You sometimes need to undo and go back. You don't make the exact right turn every time. We're not infallible. Because we're fallible, we need to have metrics that say when the past actually was better to take a step back and then move forward in a different direction, right? And if you actually look at, for example, the Renaissance, right, that was inspired by antiquity, right? They rediscovered all these things from classical,

they're like, whoa, those old guys did some amazing stuff. And then with that, they were able to push forward. They didn't have to reinvent the entire wheel. In a sense, one point I make in the book is with physics, for example, we think of physics and science and so as being totally different from history. But there's actually a relationship. And what that is, is, do you guys know any physics? Do you need, like, you know, a little bit? Basic physics, yeah. Okay, basic. All right. So the equations of physics are written as like F equals M.A or, you know, F equals DPDT, you know, Maxwell's equations. Those actually are a distillation of lots and lots of experiments of essentially the history of all of these investigators. And rather than having all of their verbal stories and whatnot, rather than trying to

reinvent the wheel and redo hundreds, thousands, maybe millions of man years of experimental work, you encode that in one equation, you move forward from there, right? So you take the lessons of experimental history, encode an equation, and that foundation, that foundation stone allows us to get to Mars. Right. We don't realize that in science because it's like mathematical, but that mathematics did not just come out of nowhere, it came out of a distillation of all this past stuff. And in the same way understanding, like, sort of the physics of human beings and how they collide into each other, and understanding some sense for history, you know, it is possible, I think, to build better systems when you can benefit from the life experience of millions of other people and that distillation

just like you can from physical law. Let me pause there. So that's why I say I'm not a completely, the past sucks kind of guy at all, actually. I'm definitely future-oriented and whatnot. But as I gave some arguments for, I think it's useful to think about a rewind and then, like a repositioning to move forward. Right. Yeah.

This reminds me of Back to the Future two or three. where they go into the wrong future, and then they have to go back to the old future to go forward. And this is just, you know, basic respect for the lessons that we've learned throughout history, right? Yes. And so humans, we experiment with things. We learn new things. We try and go forward in one direction. And then we learned that we were actually off base.

So we have to rewind and go one step backwards, back to our core foundations. So we can go forward in like a new direction that we actually learned what's better. Exactly. Progress is a vector. it's not just a scalar. They say it's not just that we're going forward or back. It is we could go forward, but on a different axis. We're just, you know, we're moving to space as opposed to, you know, like, you know, another

society might be all about the oceans, right? Another human society might have been like their number one thing is to figure out what's at the bottom of the ocean. Everybody was obsessed with that and so and so forth. You can imagine different vectors for what progress look like, right? Right. And this is something that we talk about on bankless all the time. The American Constitution is a.

a great piece of just like fundamental, what feels like political science, right? Definitely is political science. But the current manifestation of America feels misaligned with that basic foundation. And so I think the idea, perhaps this is where we can start talking about the network state, is like, let's go back to some core principles because this current direction is a little bit off the rails. So let's go backwards a little bit so that we can go forward in a new, more refined direction that takes our current context, our current global macroeconomic context into account because we've gotten off track. That's right. And it sounds like I'm going to go ahead and guess, Bologi, that the network state is your proposed next vector for humanity. Well, you know,

it is it is a toolbox, not a manifesto. Sure. Right. And so that's actually like a really important thing is, you know, there's different ways of, quote, decentralizing something, right? One way of decentralizing something is, you know, the way Satoshi did it with physical decentralization. And actually pseudonymity is another form of decentralization. Why? Because he wasn't using the centralized state identifier where he could be looked up in a lookup table and knock down. A pseudonym originates from a different source. It originated from his computer or whatever, so it wasn't connected to that main graph. Sudonymity is actually also a form of decentralization in that sense, very important one. And he used various other kinds of techniques.

But there's another kind of technique for decentralization, and that is like open sourcing everything, right? Obviously, Satoshi did open source it, but imagine if Satoshi had put out the concept of the blockchain and tried to get lots of folks to build implementations. That may or may not have worked, right? He may have had to do it first party, but that's an alternative approach to decentralization, right? And insofar as, you know, the network state is sort of like, it's a toolbox where you don't have to agree with my problem statement or my solution statement. My problem statement is, I think we're vectoring towards what I call American anarchy and Chinese control. My solution statement is,

I think that rather than just centralization versus decentralization, I think we are going to need to see recentralization on the other side, not in the coercive sense of, you know, top-down control, but consensual regrouping around hubs. Just like, you know, when people exit a burning building when it's on fire, what do they do? There's an assembly point, right? They re-centralize. And even if the building has been burned down, they're going to build something else together again, right? That is different than scattering to the four winds, everybody running for their life and never seeing each other, right? There was value in having that group together. But if that building's on fire, you decentralize and then you re-centralize.

And so my proposed solution is if these existing central points, especially the U.S. establishment in China, are getting much worse. And we have this decentralizing technology. Then we can build new societies and eventually new states. Now, a lot of people will disagree with some part of that problem or solution. They might say, no, look, you're so bearish on the U.S. Oh, biology, everything is going to get better. Don't you know, like we got through a civil war and a world war? Oh, this is nothing by comparison.

There's a lot of arguments like that. And I acknowledge that I might be wrong in the book. I say, you know, the base rate or fallacy fallacy. Just because something is normie doesn't necessarily always mean it's false, though that's nowadays increasing the way to bet. So I acknowledge that it might be wrong on aspects of problem and solution. Nevertheless, I do feel that there's parts of this that you can. take and you can make your own. It's a tool. And you don't need my permission or anything as to

which pieces of it to use. I'm just trying to put it out there. And it's free online, by the way. Yet it's a bestseller despite being free online. How about that? That's fantastic. And I think it speaks to the need for this. And so what you're saying, Belagie, is even if people disagree with the problem statement, as you put it, American, anarchy, and Chinese control, it might have a different problem statement. I think a lot of people realize that we're on the wrong vector and that we do have a problem in some shape or form. So let's open up the tool. box if we can. Let's dig into what the network state actually is. I'm going to read out the tweetable definition here. Sure. The one sentence version? Yes, the one sentence version that you have.

And it says this. If we're defining a network state, a network state is a highly aligned online community with a capacity for collective action that crowd funds territory around the world and eventually gains diplomatic recognition from preexisting states. Online community capacity for collective action, crowdfunding territory, gaining diplomatic recognition from pre-existing nation states. Let's dig into this a little bit. The first question, I think, on my mind, when I see a definition like this. There's one thing you missed, though, highly aligned online community. Highly aligned online community. That part is really important, actually. But keep going, yeah. Can we talk about the online community piece? So in a simpler form, somebody reads this.

they might say, Belashi, are you talking about a discord room or a subreddit is going to found a nation state? They're going to create their own country? Is that literally what you're saying here? So what I'm saying is a message board created their own currency, right? Right. So they say Satoshi went and posted on the crypto hackers message board or whatever. I forgot the exact one.

It was like it was some crypto message board. 13 years later, it's a sovereign currency of El Salvador and of, you know, a central African Republic and probably more. It has led to every government in the world reacting to it with CBDCs. Even if they don't like Bitcoin, they have been shaped by it. Obviously led to Ethereum and you know our whole community. So yeah, like there's there's there's where let me first level set with that, right? The suspension of disbelief. You know, even 10 years earlier, the concept of a kid in a, you know, from a dorm room could build a three billion person communications network. We are in a sense, in a time of miracles that we don't realize that or we take it for granted in some ways, right?

That hyper growth, that insane growth from something extremely modest at the beginning is as possible. We've actually seen it. You've seen it multiple times. And so the thing about this is, you know that Margaret Mead saying, like never doubt that a small, committed group of people can change the world. Indeed, it's the only thing that ever has, right? all the, you know, when you actually get into history and you realize all these nations, these countries that exist today, did have founders, you know, they were founded. And in fact, the founding fathers, you know how old they were? I mean, many, like late 20s, early 30s, right?

Yeah, 21. Some of them were 19. Yeah. Some of them were quite young, right? Wow. So in the time and place, right, when the conditions were propitious, when there was a frontier and when, you know, like the man met the moment, it was possible to found new countries, right? In fact, it's done within a human lifetime, you know, like when the Soviet Union fell, there's Estonia and all these countries that were set up then. And in fact, the founding of Estonia ushered in this whole new age of governmental innovation. They're the most technologically advanced state in Europe, right? So that's kind of just, I want to like put that out there for some degree of suspension of disbelief. A, other human beings have starred new countries. B, we've seen recently

people have started new companies and new currencies within our lifetime, people we know. See what that means then, if people argue against it, they say, there's no path towards a change, it will never be changed. The current system is eternal and immortal, right? And this is actually implicitly the East Coast slogan, right? Oh, this time it's different, huh? Loll, right? And they'll say that.

And what that's actually doing, by the way, it's quoting something out of context. This time it's different. it comes from some sort of pitch that didn't hold up. But of course, the opposite of this time is different means nothing ever changes. But something did change for Blackberry or Blockbuster or Barnes & Noble. Something changed for them. The market changed and they're no longer, right? This time was different for them, right?

So this time it can be different. Change does happen. It's not like, you know, everything is constant for all time. So that just gives another approach on the problem, right? Now to the specifics. basically, let's just start with the definition, the nation state itself. Do you guys know the difference between the nation and the state? Help me.

Yeah, I haven't thought about that deeply. It's actually really important. And I talk about this in the book. Is the nation more kind of the cultural human side of things and sort of the state, more the protocol, like the rules, the constitution, the law, is that sort of be... Very close. That's right. So, I mean, really, that's a good paraphrase.

The nation, it comes from the same root word as netality, the common birth, common descent. like the Japanese nation. This is kind of a more old-fashioned way of talking about things, but you talk about, you know, this group that has common ancestry, culture, ethnicity, language, various characteristics. And then the state... Almost like a tribe. Is that we'd say?

It's a tribe. Exactly. That's right. Now you can see the overlap, right? Or perhaps an online community. Yeah. Exactly. That's right.

So you're there. All right. But the state is the administrative layer that this nation sets up. Okay. Now, there is a perennial argument that's actually very similar. So the argument over currency, as you probably are aware, is between the sort of, for lack of better term, I'm going to call them the libertarian progressive models, okay, because it's approximate. The libertarian model is that people started producing

and then barter is how money arose and it started with production, right? That is, you know, a common model that you'll read in like various, you know, libertarian texts, okay? The progressive model, like a David Graber-style model, says, oh, actually, no, that's a very independent kind of thing. Actually, money began with the state and with debts to each other, and that came first, and actually everybody's kind of downstream of that, right? And there is an interplay between these two views, okay? I lean towards the barter model, but I agree that there are aspects of, you know, for example, money only arises when there are two people. It's inherently a social phenomenon as opposed to an individual phenomenon, despite as individualist as money is.

It's like language, right? You have to communicate with folks. So in a similar way, just like there's an argument about how currency arose, there's an argument or how the state arose. What came first, the nation or the state? The people that gave rise to this administrative unit, or did the administrative unit create the people? At first, it seems totally obvious.

Just like the libertarian model is like, well, how could you have the state come first. You have a people, it's a tribe, a primitive tribe or something, and they start setting up some formal government and some laws or whatever, and, you know, Kovahamrabi, like, you know, that's not totally primitive tribe, but like a written set of laws. That's like a state, you know, and a bunch of guys to enforce them. Okay. How could the state come first? Well, when you look at nation formation, it's not quite that simple. For example, around the time of the French Revolution, most of the people in what we now think of as France did not actually speak French. They spoke various other dialects and languages. And it was the initial French-speaking group that invoked the

sense of nationalism, built this powerful state that went and propagandized all of these people into speaking French and, you know, basically imperializing them. Eric Hobbsbom talks about this. And, you know, similarly, the thing we think of as Germany, that's a Bismarck creation. The thing we think of as Italy, that's a creation of Garibaldi, right? These are giant unifications where the state, in a sense, did create the nation of the people we think of as German or Italians or French and who think of themselves as German or Italian or French, right? So there is an interesting feedback between the nation and the state, even if I would argue the nation comes first, I agree that there is a ladder here, right?

The state can create the nation and vice versa. Just like I agree that there is an interplay between the libertarian and progressive theories of money. Okay. Now, why do I bring all this up? Well, I think, extreme importance to crypto people because if the question of the 2010s was what is a currency, I think the question of the 2020s will be, what is a nation? Okay?

What is a legitimate nation that is both deserving of and capable of some degree of self-determination? Okay. And we think of the question of what is a currency. Now you can rattle off the definition of a currency. You can rattle off. It's like medium exchange, store value, unit of account. We've all seen that. Most people could not rattle that off in the late 2000s.

Why have we had to rattle that off? because the constant of, you know, the U.S. dollars of currency, and obviously that's not something you can innovate on, became a variable. Suddenly there's U.S.D and BTC, and now U.S.D. BTC, et ha, blah, blah, blah, blah, blah, all this long list of things, right? And when a constant becomes a variable, all the certainty is, especially something that's a really deep constant, when that becomes a variable, all the certainties go away, right? There's a huge time of chaos, volatility, upside and downside, blah, blah, blah. And one constant that's becoming a variable is the concept that America is a, quote, nation state. It's not. It arguably never was. But it definitely isn't today. It's at a minimum binational where there's two groups that literally don't intermarry anymore. Democrats only marry Democrats. So that's the thing is, you know, people are, it is progress. Yes, in the sense, it's progress, of course, that folks will marry across, you know, racial boundaries, religious boundaries and so on. But you know where they don't marry across. They don't marry across party boundaries. So you know what happens in like one generation.

ideology becomes biology. Democrat Republicans becomes like Sunni Shiite, right? And you just go back to the future. It becomes a tribal thing where it's literally biology like, you know, this people are there the bad folks and you don't marry them and like racism returns in a sense, right? Because it becomes like, you know, it becomes biological. It will take some time for that to iterate out. Don't get me wrong.

Okay. But you're in the process of that. We're talking like 80, 90 percent of people. It's like very strong like, you know, taboos. on this now, right? So when you have a binational state, that's a recipe, I mean, either for a crackdown or for like a Yugoslavia, Bosnia type situation where you have a bunch of different nations that are angling for control of the state. That's a recipe for conflict. In fact, the entire concept of the nation state was the idea that each nation gets its own territory

and its own laws so that each guy in a box or whatever, right? That's the initial ideal abstraction. That abstraction is actually not typically reached. Japan is the largest probably single nation state out there. You know, China or India are not really nation states or civilization states because there's many different ethnicities, especially within India. China is more monoethnic. You can argue the Han are like 90-something percent, right? But they also do have lots of different ethnicities in there, lots of different regional tensions and stuff. But many other countries are really multinational states. And you know, the opposite of a nation state in a different sense is the concept of the stateless nation.

Okay. So can you name a stateless nation? You've heard that term? A stateless nation. So this would be sort of a group of people, Palestinians, possibly. Okay, right, that's the most famous, right? But you could take, you know, the Kurds,

you could take the Catalonians, the, you know, some of the Armenians, the Basques, right? Mormons? These are folks. Mormons in Utah? Arguably, yeah. I mean, they're certainly influential in the Utah government. Right.

But yes, that would be something you could think of potentially as a stateless nation. And in fact, one way of thinking about the world is once you start actually really putting a magnifying glass in that word nation, right? You see some really interesting things. For example, the term multinational really should be like multi-state or multi-jurisdictional because it's not like this company is interfacing with, you know, all these nations of people. It's not like doing a deal with the Catalonians and the Basque and so on. It's doing to deal with the Spanish government, right? So it's multi-state, multi-jurisdiction rather than multi-nation.

The reason for this is, you know, you all see your terms like national security or, you know, it's a national matter. National has to mean all of us, right, when it's really, you know, you might call it federal. It's a bit of a misnomer, right? Because it's trying to, this is the state using language to try to make the nation and the state the same. Right. Okay. Right. Which I understand it kind of helps with legitimacy, but it's also a stolen base.

And another version of this, which is actually quite important, is the United Nations, really we should think of as the selected states. Because most nations are not in the United Nations. There might be like 600 legitimate nations in the world. The Kazakistani president recently said, if all the nations of the world were able to get self-termination, nation in the sense of the Japanese nation, the Catalonian, et cetera, if all the nations of the world were able to have self-determination, we'd have 600 countries in the UN, not 190-something, right? Right. Yeah, I think there would be a lot of African tribes that would be unaccounted for in a nation-state model. Yeah, whenever you see lines, like straight lines on a map, that is almost never what, you know, like actually reflects what the ethnic groups and language and history and culture was. It's an imposition by the British. Now, as I said, the state can create a nation. So, you know, there's this famous graph of, like, search queries in the U.S. for, like, for baseball teams, right? It's a paper, I think it came out of Yahoo research in 2005, I'm like Geocenters.

Okay. I mean, I can bring it up. Let me see if I can bring this up. Okay, here we go. This is an amazing, amazing figure that I'm just going to try to zoom in on. Okay. So this is from like 17 years ago, all right? And so these are queries from different sports teams.

Right. Okay. And you can see that like this is a group of people who are Brewer's fans and this is the group of people that are Cubs fans and so. Okay, so Belagra, I'm going to commentate for the listeners out there. We are looking at what is almost a map of the United States. However, there is no actual drawings of the sea or ocean. There's no drawings of the states. There's only dots, but you can see the outline of the United States just because it's like a population map, right? Like people sort of outline in a pseudo way the actual physical landscape of the United States, but there's only

dots. And these dots are different colors based off of what team that they are on. So my team of choice, the Seattle Mariners, happens to be this white in the upper left corner of the United States. You have the Chicago Cubs, which is where you'd expect around Chicago. You got the Houston Astros around Houston. You got the San Diego Padres around Southern California. But you don't actually see the state of California or like the city of San Diego or any particular line. You just see these masses of dots that are around their respective, probably sports stadiums would be like the epicenter. These are the baseball tribes. Baseball tribes. Yes. But what here's interesting. You can sort of see some state boundaries there. Like if you look at the tigers,

right, versus the Cubs, you can kind of see like the boundary between a pretty clear line. Right? There's a pretty clear line. So this is an example of where like the social construct of these sports teams and these states is in the minds of these people. It's installed softening in the minds of these people. And so the lines on a map have become reflected in the softer installed in people's heads. This is one of those cases, which comes first, the nation of the state and the answer to that question is yes, right? And so it's like, I think the separation is super useful for me, and I hadn't thought of it. Immediately we're seeing crypto parallels so that, you know, the nation is the tribe, it's the people. And the state is the protocol of a set of

rules. It's the constitution. And so the parallel between online communities, which is kind of the root of the definition here is we've had the online communities online since the first early versions of the internet through chat rooms and message boards, right? So we've had the nation, we've had the tribe. We haven't yet had the state part of it, the protocols and rules. And maybe that's what Bitcoin brought, you know, in year zero 2009 here. And maybe that's the parallel here. But I still have a question about these online communities. My question is this, Bellagie. So like, why does an online community need a nation state type of apparatus to be recognize as a nation state. Why not a guilt? Why not a Dow? Why do we need this state recognition

piece of it? Excellent question. I actually talk about that in my chapter on the one commandment. Okay. And so just to kind of explain this, the short version is not all sharp societies need that, right? Many of them can deliver value as purely digital. Okay. Many of them can deliver value as having a physical presence without any diplomatic recognition, but some kinds of innovations or things you'll want to do require diplomatic recognition, right? So if you scroll down a little bit here, you know, you can kind of read my definitions and stuff, but one concept is you start with a startup society. That's just like a very early stage thing. You know, it's very similar to a startup company where it's small but has aspirations of coming big. Then you can set up a network union.

That is, you know, a online community that is capable of collective action, like, for example, crowdfunding something or upvoting something or helping people promote a product or giving user feedback or something like that, right? So a network union is a digital thing that's capable of collective action online, which is actually a very high bar because it's hard to get people to do things that are productive together. It's easy to get people to yell or destroy or whatever. You know, if you ask 100 people to burn down a building, they can do it. It's very easy.

They parallelize that. It's embarrassingly parallel. If you ask 100 people to build a building, that's actually really hard. It's like 100 or 1,000 X harder, right? You're not sure those 100 people could even do it or have the skill. So a network union, just getting to that alone, getting a digital community that's capable not of just canceling somebody online and everybody yelling at them in a disorganized way, but building something online like a Wikipedia or Google Docs or a GitHub, you know,

a repo, that's actually somewhere where there's talent, there's skill, there's organization that's required. It's non-trivial to build a good network union. Once you've done that, the next step, if you want to do that, and not everything will need that, right? Some things, as I give examples in the book, examples of purely digital network unions that do not need physical territory like the cancel proof community, where you have a guild, exactly as we were talking about, let's say, have designers. And 99% of the time, they're just designers trading back and forth designs, giving figma tips, they're paying their subscription fees, whatever. one percent of the time somebody's getting canceled and they come in and they say hey look this is happening and then you know the leader of the guilt looks up the rule book and is like okay were you getting

canceled for something legitimate or illegit they actually have some rules process they don't just blindly defend a constitution yeah exactly and they're like if x then why they have a written law so they aren't just reacting to it in the moment they aren't just reacting to it you know based on how much they like this guy they actually have a set of rule of law right and that's like the point, the reason you have written laws for murder is it's like, oh, this guy's good guy will let him off or this guy's, you know, a bad guy, let's really throw the book. You know, sometimes you have discretion, but really the constant rule of law is it's applied uniformly to people as opposed to the mob just deciding randomly. That's not justice. Mob justice is never

justice, right? So this is an example of something where you have a community of a thousand people and maybe, you know, you have to pay some fine if somebody said a bad word like, you know, a decade to go, and that's it, and you're good in the community. There's forgiveness. There's a forgiveness process. Do you see what I'm saying? It's cancel proof cultures, like restoration culture. That's something you could do digital only. Now, if you want to- Before we go too far, I'd actually like to kind of just back up and just like emphasize this one point before we start talking more concretely about like the future, the future tribes, the future network states. Just to really drive the point home as to like, if anyone is skeptical,

as like, oh, how is this Discord channel or how is my telegram group going to turn into a physical country somewhere. And there are some parts of the crypto world that we're already seeing accept some of these outcomes or trajectories. There's this like meme in the crypto space that, you know, everything will have a token, right? Is it a protocol? It's going to have a token. Is it a protocol? It's going to have a Dow. There are some people who are also going as so far to say every single defy app, every single defy protocol will also have its own chain. We'll also have its own like layer two or layer three or app chain on Cosmos. And all of a sudden, not only do you have your own native currency, but you actually have your own, like, economy.

And that economy, if it's its own chain, starts to actually collect, you know, transaction fees, like taxes, if you will. And so, like, first, we have this shared valued, shared community that's coalescing around this token because everything's going to have a token. Then we can lean into that and be like, well, everything is actually going to be able to produce its own boundaries on its own, like, layer three on top of ZK Sync or app chain on top of Cosmos, and then create its own literal protocol based off of the community. that's around this currency. And so, like, these things seem to have, like, a set of believers who kind of think this outcome is a little bit inevitable for every single community that's out there. And so, like, now we're getting into examples of, you know, the anti-cancel culture community. And what you were about to show on the screen is, like, the sugar-free keto culture community. as soon as we figure out how to have tokens for each one of these things, it's not that many steps removed from some of the infrastructure that we are already talking about here in the show.

So, yeah. So one thing, though, I do want to stress is I'm very big on this concept of the one commandment in the book, which is a non-monetary thing, right? That's to say, I am very much about, like, look, I'm pro-capital. Obviously, I'm pro-craptoe. I'm pro-cropos. I'm pro-tokens, pro all that stuff. but I'm about them as a tool rather than a goal, right? And what I mean by that is a lot of discords, because they start money first, right, then they end up, yeah, exactly. So communities are caused first, company second, right? So let me explain first and then kind of go there. So many discords, as you know, they start money first.

And what happens? Lots of people are there for the free money, when airdrop, right? Like, you know, that is, is it good that folks, you know, have some way to live? And so, sure, I'm not against people making money. The problem is when that comes first, everybody's there, they're not really united by anything, right? What you want to do is start with the kind of moral foundations first. Now, the moment I start talking about morality, people will basically be like, oh, that's weird or, you know, where you preacher or blah, blah. Let me see if I can motivate that.

In Western society, you have folks who, when you say morality, they are very reticent. They will say, who am I to judge? I'm a fallible person. I can't really tell others how to live, et cetera. That's one reflex. The other reflex is when you get them on politics, this is how everybody should live. We ought to pass a law at gunpoint if necessary, screwed them, tax them, blah, blah, blah. And so they go from zero to infinity like this.

It's totally bipolar, right? Oh, I'm so, you know, I can't judge at all to I judge everything and I will enforce it now, right? And in between that zero and infinity, how about a one, right? So that's why I call like a one commandment. I'm not saying to come up with your own religion and Ten Commandments. So that's actually a really big deal to do. It's like a whole software infrastructure in its own way. It's a social order.

But you could come with one commandment. Okay, one way that you feel society is at large failing that you are morally innovating on, that you think you have a better way of life, that people should live like this, that it's a single biggest problem, whether it's, you can think of it as obesity or as screen time, or it's cancellation, or it's guns or it's alcohol. Well, actually, ours is banks. bankers. There you go, right? Okay, perfect. Okay, bank less. There you go. So once you have that one commandment, and it really should be reduced to like the smallest number of words and almost in a guttural way I remove is. So rather than even saying banks are bad, I'd be like banks bad, right? Why say it like that? Because you're going to say it a zillion times and it will need to sort of be laced into the community. And the ideal one Commandment is one which has a real polarization against default society, but that only changes

that one thing and then the implications of it. So when you say banks bad, you're not changing traffic lights. You're not changing, I don't know, like the laws on how electrical power is wired or something like that. You're not trying to change that stuff, right? You're not trying to change how words are pronounced or change the language to Turkish, right? All those other things are remaining constants, you are changing this one dimension. Banks bad. That's actually a pretty big dimension, by the way, to change, okay? And easier, you may require legal kinds of things for that and so and so forth. But it's totally, you know, it's in line with what you guys are doing. So you've got energy and so on behind that. You have a historical critique, right? And by the way, how much do you guys

know about like what happened under Sarbanes Oxley and Dodd-Frank and what have you? Are you familiar with that? Yeah, I mean, it increased the complexity. So I want to dig into that. But by the while you're talking, I tweeted out from the bankless account, Banks Bad. That tweet is doing quite well at this moment and is on message. Is it at Bankless H.Q? Yeah, Bankless H. All right. How many? I'm going to get you. So am I. People are going to wondering what we're up to. I mean, this is the meme layer. This is kind of the moral philosophy of what we're doing. This very much fits the bankless Twitter. But continue. Yeah. Tell us, so why is Sarbanes-Oxley applicable here? Banking regulation. Your critique of everything will be just

vastly more sophisticated and remember the thing we were talking about at the beginning with like knowing the laws of physics like all of that accumulated thing like summarizing it here like it just makes your argument more powerful you have a stronger base like you do squats you know like you lift right oh i do squats do you even lift bro like all right so lifted lifted at least sit up point is you need like a strong base like good positioning to like lift a lot of weight right

And banks are a big thing, right? So I think you get a lot of leverage out of essentially writing the history of banks from a critical perspective, right, from a crypto-critical perspective. Let me give you an example. The state's solution to the financial crisis in 2008 was to stop issuing commercial bank charges for almost a decade. It was a coronation disguised as regulation. Basically, oh, you know, they said banks bad.

But how did they deal with it? They've rewarded them by essentially eliminating their competition completely. So what we are looking at is a graph of the number of new FDIC insured commercial bank charters in the United States from 2000 to 2019. And right at 2008, 2009, the number of new FDIC shared commercial banks, it was 188 in 2000. It was 167 in 2005. It was 175 in 2007. basically drops to zero. Because there was like a social distaste for banks, right? What blotjy, the point you're making is that, okay, we have this distaste for banks, therefore we're just eliminating all future banks, making all current banks the new winners,

the new incumbents. Exactly. That's right. And then, but fortunately, we'd had the internet. And so we routed around that in two ways. FinTech was a front end during this period. Even though you couldn't get a new bank charter with FinTech, people could build all these very amazing layers on top of the.

this antiquated banking system, right? That's Stripe, that's Square, that's Mercury. It's all these guys, you know, built things over the 2010, Stripe and Square especially, right? And Coinbase and so on, right? But I'd say Stripe and Square are like classic, you know, FinTech unicorns, right? They're working on top of this antiquated, you know, bank backhand. And the reason it's so antiquated, imagine if, like, when you sent an email, okay, behind the scenes, it got printed out and delivered via Pony Express to the other side of the country, and it took two to three days to get there. And it and then it got scanned on the other side. And that is a pretty good analogy for FinTech on top of the wire transfer system,

like the legacy wire transfer system. It's like this pony express thing under the hood. And if you put unusual workloads on top of it, like Robin Hood experience with the game stock trading, if you put unusual loads on top of it, it will not make it, right? Okay. So FinTech began the front end and blockchain became the back end. Right. stopped new bank charters from getting issued. But like in a pincer attack, fintech built a front end,

blockchain built a back end, and like neobanks are now arising that have the Ux of a fintech and the back end of a crypto protocol. And that's like totally packet based and outside the system, right? I'm a big fan of this trajectory so far. I love this. Yes. The point is if that's a history that just goes back 20 years, if you write the history of banks, I think you will find way more interesting nuggets there that deepen your critique of the system and also show why they were set up in that way in the first place, such that your proposed reforms, that's why you know, to really, you really want to go after banks, you have to become a counter historian. You need to understand why the rules were set up the way they were. You need to understand their legitimating history

better than the bankers and the regulators do themselves. In order to quote it back to the them chapter and verse, and to point out all the things they missed so that your V3 fixes not just the abuses of the American regulatory state, but the abuses they claim to prevent as well. By the way, I don't think that's that difficult because I feel like a lot of regulators and bankers have forgotten the first principles of why they were formed in the first place and what they're seeking to protect. That's right. That's right. But this is the first commandant, right? So like for the bankless nation, the bankless community, it's not about all of the money you can earn in crypto. It's not wealth first. It's mission first. It's tribe first. It's

nation first. That's what you see as the one commandment and is essential for the formation of a network state. That's exactly right. And the thing is that you know, you sort of know this as an investor, by the way. You know that, you back missionaries over mercenaries, right? That missionaries who believe in the purpose, they don't quit, right? Mercantaries are just there for a paycheck. You see that with armies, you know, like nationalism of the French variety was actually, you know, that was a left-wing ideology for a long time

before it's now associated with the right. But nationalism gave essentially everybody like an equity stake in the country, at least mentally. And so those nationalist armies felt they were fighting for something that they themselves belonged to as a citizen and they often beat

the hired guns of a monarch, right? Missionaries beat beat mercenaries almost always, right? Nationalists beat usually soldiers of monarchs because they're more motivated. And so starting with that moral premise and attracting people on the base of that moral premise without any money. That's actually kind of what a startup is, by the way, right? A startup is there's a potential, there's an equity stake, right?

But fundamentally people are there early on because they believe in the mission, you know. If you're doing a startup and you're recruiting people on the base of a paycheck, of a higher paycheck or comparable paycheck to a Google or whatever, where you're just not going to make it, NGMI, right? And so it's a mistake to start money first as a motivator. Money should be removed as a constraint. Money can be, you do have to make the dollars and send that up, absolutely, but it's a tool to achieve that purpose.

So the one thing I would also do is I'd say, yeah, banks bad is really important, but you also need to say X is good. I mean, Ethereum is good. I'm sure you'd say that, right? Then you'd have derivations and things of that, like, you know, once you agree, for example, that banks are bad, you might say self-sovereignty or self-custy is good. And you have all these derivations from that. And so that set of moral premises, the more you can get of those and get those explicit, I think it'll make, it'll just make you

really strong as a community, because you can now start doing tracking polls, for example, right? You know how you have uptime, uptime graphs? You're already seeing those? Yeah. Right? Right. So you do a tracking poll for your community, and you ask, are banks bad? Yes, no. Is self- sovereignty, self-custody, whatever. You ask these questions, and you will actually see numerically what percentage of your community agrees with you on these things over time. Now, why would anybody ever disagree? Well, I mean, let's say there's some huge hack or whatever. Then maybe people's confidence in self-sovereignty declines. And then you have to bolster it again, or you have to flip on that, perhaps. But a flip is a really big thing. It kind of means that, you know, your moral

fiber is, you know, eroded, you've lost the peg in an important sense, right? You know, I'll show a provocative pair of graphs, okay? Obviously, you know the, like the Terra-USD thing when it lost the peg, right? Basically, it was a constant, and then it became a variable, right? It was supposed to be stable, and then it plummeted. Here's a point I want to make. So just take this image, right? You see it was flat, and then it just suddenly falls off a cliff. The thing that people were relying on a constant it became a variable, right? Right. That happened over a series of hours,

but there's something that's kind of similar, and that is like the decline of religion in America. You know, people, you used to kind of be able to take for granted that people had this base of believing in Christianity or what have you, and you look at some of these graphs, like church membership among U.S. adults now below 50%. And this graph looks like this graph. Right?

Just like the wobble before the complete collapse? Yes. And it's down like it was flat at like 77% for decades and then, you know, dropped. And then now it's like down to like 47% it's dropped like, you know, more points in a few years than it had in like decades before then, right? Belagie, America kind of feels like it's been wobbling more and more and more ever since 2008. Yeah, but it's been accelerating arguably. But yes, you can argue when it started or no. I'm saying it's definitely accelerating.

Like 2008 was the first wobble. And then we got back to stability for a while. But now ever since, I don't know, 2016 has been wobbly, wobbly, wobbly. Yeah. Though the thing is that one thing that's useful is to take the long lens on certain things. And some of these trends started probably before you were born, like the Fed funds rate, right? I'm not sure if you've seen this. Have you seen the long-term chart here?

I have not. So this is like the interest rate, right? And the thing about this is you see, so this is like the 1980s. And you see how this has just been declining. with spikes back up but decline, decline, right? And then here's like the zero lower bound interest rate. And what is the long-term trend there? It is absolutely like a trend towards lower and lower and lower interest rates, right?

Right. They just keep stimulating the economy and they try to let it recover, you know, and go back to normal, but it needs to be stimulated again and stimulated again. And like they juiced it to such an extent over here and they had to the high rates. They're probably going to be forced to print again. Right. just looking at that long-term trend. And they'll print longer and harder

than what happened in the 2010s. And that may result in like serious inflation. The point is these wobbles began even before 2016. There's certain things that are in the system that like have gone back further, right? Other things like Social Security and stuff go back even further than that. So, you know, I'm not saying all these things are inevitable,

but I'm saying that some of them, you know, go back further. The point is when you have something that was a constant that becomes a variable, right? When it goes from the USDA, you know, of Terra as 1.0 to something much, much less is that very fast, or it goes even over decades, like everybody's a Christian or you can basically assume 77% of American's Christian are like less than 50%. The entire premise of society now changes. You have like structures that were set up on a certain set of assumptions that, you know, people just no longer agree. A small example, an important example.

abolish the police. Okay. Like, that's something where you might have had 99% support for that the police should exist or 99.9, whatever, in the 90s, in the 2000s, that was not a political issue. Suddenly, for a time that dropped to, like, maybe double digit said the police should not exist, all right? That's a huge shift in society. Those people can't, they have a fundamentally different conception of what society should be. You can argue whether that is a good or bad moral innovation. I think probably you're going to need some kind of police force of some kind. But it is certainly just like those folks cannot really live in the same jurisdiction. They have a different view on what like fundamental premises are. So that's why it's actually important to measure these kinds of things

in a tracking poll and make sure your community has that strong moral fiber, which is the premises for all of your arguments as a content creator, right? If you enumerate all your moral premises, those are like the notes that you're using to generate your songs. Yeah, I just did a tweet replies you were talking, you know, banks bad, bankless good. Rocket Pool is your decentralized Ethereum staking protocol. You can stake your eth in Rocket Pool and get our ETH in return, allowing you to stake your ETH and use it in Defi at the same time. You can get 4% on your ETH by staking it with Rocket Pool, but you can get even more by running

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Bankless means you don't give up custody of your keys. Right. You don't need to trust that. You are your bank. You're going bankless. And that is the gutteral representation of our mission. But like, so getting to this idea of the definition of a network state, we've got this align.

online community now that has a moral imperative and is creating some moral innovation, that mission piece is absolutely critical. Can we like look at this graphic that you put together? Because I just want to make sure people get out of this podcast. What being inside of a network state actually is, like the day to day. Am I in a Discord room? Am I in a subreddit? How am I existing in a network state? So have four tiers, right? Startup Society, Network Union, Network Archipelago, network state. Startup society, you're just starting. Okay, it's like one person thing. Network union, you have a digital society that's capable of collective action. Network archipelago, that digital society is using a collective action to crowd fund territory and start assembling offline.

And they're networking those pieces together all around the world. What that is on screen is a vision of a network archipelago where it's got lots of nodes around the world. There's little cul-de-sacs and apartments and offices and parks and ranches and whatever, all network together where your NFTs, your crypto passport gains you entry. Maybe you have AR glasses and you can see the sigil of that community there. And it's got lots of pieces all around the world that when you sum them together are potentially of the same square footage as an existing sovereign, right? Because many countries are small countries in population and or real estate.

and or income. And that's a network archipelago. So is the structure of a network state something like global campuses, or is it supposed to be in one specific region in the long term? So the final version is a network state. And I define a network state as a network archipelago that attains diplomatic recognition from a sovereign. So you wouldn't start a network state. You'd end with it. Same like you don't say, I'm starting a public company. That's actually something where you sort of need diplomatic recognition from the government to say you're a public company. Do you see what I'm saying? You need like some interface, you're getting on the public markets, right?

Diplomatic recognition is this incredibly important step between crypto countries and fiat countries. It's as important as the interface between cryptocurrencies and fiat currencies, okay? And that's actually a really productive analogy. You know, the crypto country to fiat country exchange is an important thing. Cryptop passports and fiat passports will have some interplay, I think, over time. But coming back to this, basically the Denver C in one image, the important. thing about this is what I'm describing there already kind of like rough analogies things that

already exist. Okay. Google offices around the world all have Google's logo and your Google key card or whatever opens the door to all of them. And it's like a piece of Google, whether it's in Boston or Bangalore or Budapest, right? Like it's this archipelago of territory around the world. And the total footprint is probably quite substantial, especially if you add up all the data centers and so on.

But it's only commercial real estate. It's only office space and data centers and stuff. If you added in residential and industrial and other kinds of stuff, parks, whatever, you actually start to get something that looks like, you know, what a group can afford. I mean, one way of putting it is the million Estonians could afford Estonia, right? What do you mean by that? Like the territory of Estonia is mostly held by Estonians. Ah.

Okay. So a million people is actually a very large number of people if they are all putting their morality and money behind something. It's just a massive force, right? Even 10,000 people is a lot of money and a lot of energy if they're all committed to something. 10,000 people on a straight arrow, right? Like, by the way, here is one proof of concept, okay? You know you don't have a network union if you have a community that has a thousand people and you can only get like 20 to like a tweet. Right? A network union would get all 1,000 of them, basically to first order would like that tweet.

What you're doing is the community is becoming like almost like military level organization, right? It does things together. You think about a union at a company. It's not something we're like, oh, yeah, some people can strike. They enforce basically like discipline in terms of people are there to do something. You know, if you're on a football team, you don't like just show up for some games. You show up at the games. You show up every play and the coach is calling the place, right?

at a company you're not just I'm there some of the time whatever like that's a full-time job right so that is actually the level of priority it needs to get to to be like a network union you see that's actually a pretty high bar that's not just a discord right okay so can we walk this through for like you know again using the bank list example because I'm familiar with that right so we have this mission this gutteral thing banks bad bankless good all right we have that we started like kind of this online community this social movement where we have a newsletter with 200,000 subscribers. We have a podcast, you know, 2 million, 3 million downloads a month. We have a Discord community with tens of thousands of individuals, all trying to go on the

bankless journey. Banks bad, bankless good. Okay, so we have that. So we're at level one of kind of the network state model, maybe level two. But like the nice thing about this is there are these, again, we don't really have digital campuses right now. But bankless is a global movement. There's a bankless Brazil that's kind of fractured off. And David and I don't even know what it does. It has its own podcast, has its own community. There's like a bankless France. I don't know that we have yet these digital campuses. But let's say this community gets riled up enough about the mission and excited about the mission that we want to get to that end stage of a network state. And our end stage is basically some sort of jurisdiction that is incredibly crypto-friendly that has like

banking laws and property rights laws that mesh very well with, the global digital rights platform that is Ethereum and Bitcoin, kind of what we're building in crypto. And we don't have that in our Western countries and other societies. We have sort of crypto antagonistic legislation, at least not crypto-friendly legislation. So that is the end goal. We want to get that jurisdiction. We want to get that United Nations representation. How do we do that? So one thing I'll say is basically, I think you're starting to see my logic on this. there's actually levels up of commitment that you haven't gotten to yet, that once you set that as a goal, you can start achieving that, right?

Think about it, like, people go from just aimlessly surfing online, spending lots of time on social networks to putting lots of money into cryptocurrencies, to then thinking of these as their primary vehicles for, you know, community and citizenship, right? They're becoming their primary identities. Like the merger of social networks and cryptocurrencies is what we're talking about, which are entities that are very, very important and that have your community and your money and your citizenship and your history and your work history and that can acquire territory. So to your specific example, one thing that's good about the One Commandment model is that it's

kind of like a startup because you can kind of poke and you can say that's not specific enough, right? For example, I want to improve file sharing online, right? The current state of file sharing is not good. You have to get like super specific on exactly how you're going to do that, right? So you can start with a high level, the one command of banks bad, bankless good. And then you just raised a really interesting way to potentially operationalize that, which is you have a crypto bill, like a set of legal provisions that maybe the community crowd funds or someone who does the legal work for what's called model legislation, right? And it's like, this is what the ideal law should look like.

It gives zero privileges to existing legacy banks. It allows for new charters. It allows for anybody to basically be their own bank at home legally, like a First Amendment like thing. You know, right shall not be infringed kind of thing. Second Amendment, right? And I'm just like making this up right now. But, you know, you'll have to think and deliberate on what that model legislation looks like.

And then you have folks in every different country who are like allocating time for this. And they're like, I speak Portuguese. I'm translating it here. I'm introducing it in this town in Brazil. We'll get on base here. Oh, you're in Spain. Okay, great. let's work. You know, this is an activist group, right? It is checking in each day. You're giving out

NFTs and stuff if you want for like checkpoints, like job well done. You're holding meetups and stuff. But now you're not just, you know, right now, if I'm not mistaken, you have folks who, you know, like your podcasts, they're there to be informed and so on and so forth. But after information comes alignment, after alignment comes activism, right? And not every single thing. It needs to be paid. You know, look, I love tokens. I love other kinds of things. People are there because they believe in something bigger than themselves, you know? And look, obviously, you need to make the dollars and cents work, but you have a concept of the collective good. Now, it may turn out, by the way, and you have to think about this, is bankless the right, it could be a stream into this, but not it itself, right?

You might, you want to put some thought into that one command. You're right that you have something that's like that, but it may not be super specific enough. In the same way that, for example, Vitalik wrote for Bitcoin magazine, and those people were aligned with his vision of Ethereum, but he had to actually go and do Ethereum and have, I don't know, the 30% or 40% of Bitcoin people crowdfunded Ethereum with Bitcoin, if you remember that, right? And then, like, Ethereum almost like forked off from Bitcoin. This is where, like, a model for bankless is you stop at the online community, you stop at the Dow or you stop at some level before a full network state. Yes. And even actually, there's a level in between, which is a network

archipelago. You might find it cool to have bankless embassies around the world, right? or even something in between which are like bankless meetups, you probably already have those, right? Those are like temporary piece of a network arc appellate. But cloud is like materializing on the land temporarily and then dissipating back into the cloud, right? What is the incentive, though? So, I mean, we talked about the collective good.

That's clearly an incentive. But is there sort of a founder incentive as well? Or for like those who govern and work inside of the network state, is there upside here? Or are you like deprioritizing the economic, upside. I think it's kind of like, you know, the left and right engines on a plane, right? You have to kind of balance, you know, if you're over money, you probably need to increase morality. And if you're over morality, then people need to eat, right? And so they're kind of like control sticks where you

kind of need both, right? And I talk about this in the book. Like, that's very roughly like left and right, you know, and it's like cause and community and, you know, like do it for this. And then, okay, like, you know, let's be pragmatic and whatnot. But then you can get too self-interested over here, and then this is the group again, you know? So you kind of need both of those control sticks. It's like, imagine a car that you could only steer right or you could only steer left. The goal is the destination, not the direction. Actually, you know, I talk about this. Do you hear my concert of the Westist? No. Tell us about that. So imagine somebody who they call themselves Westists because they like the idea of going west to California.

I mean, we're about these words. This is a, big theme that we use on bankless is going west, we're going into the frontier, we're exploring the unknown, it's dangerous, but we're also like looking for upside. Yes. And to be clear, what I'm about to say is not a critique of that all. I believe in that also, you know, going to the frontier and so on. But in my hypothetical example of Westist, which is not where you guys are, but in the hypothetical example, a Westist would define themselves by, okay, we're going west, right? And then they end up in California. And then what happens is there's a schism in the movement. Why? Because

some group, subgroup says, what, are you guys wimps? Are you, are you east-est cucks? We need to keep going west. Right? We got to go into the Pacific. That's west. What? You're in East-S now? Right. And so they just go into the Pacific Ocean.

Right. And that is when like ideology and direction is taken as being prime over destination. Right? And, you know, that seems like a caricature example, but you can see how that applies to so many ideological movements. Oh, I mean, we definitely have that in bankless, right? You're not bankless enough.

Yeah, exactly. You still have a bank account, David and Ryan. I thought you're like, decentralized. And I'm like, I got to pay bills. I have a family. I have a more, like, there's things in the real world I still have to do. I want to be more bankless. And like, you know, someone would also say this in crypto more broadly about decentralization, making that the end goal rather than a means to some other end. Well, I think this is the critique of maximalism, right? Like, if you become too maximalist about one thing, you end up as a snake biting its tail, as in you become a maximalist for maximalist's sake, and then all of a sudden, like, oh, you're more maxless than me? No, I'm more maximalist than you. And then it creates

this like extremist culture of just like, who's the most maxi of them all? That's right. And this happens basically, this is really just fundamentalist movements in general, right? Maximilism is, you know, one thing I actually, I've got a new chapter coming out on, um, do you read the bit God's state and network? A while ago. I didn't catch that bit. Okay. So the concept is like, you know, there's this,

this concept of a Leviathan from Hobbs, okay, as the most powerful force. This is a big bankless thing. Yeah. Yeah. And so it generalizes the idea of God, right? So for some people, God is the most powerful force, you know, the prime mover and so on. For some people, it's not God. It's the state.

It's the U.S. military. It is the police. They don't believe in God, but they believe in the state. Okay. the state exists, the police can't throw it. Okay. And then for yet another group of people, that most powerful force is the network. They believe in encryption and they believe in, you know, the social network over the state or God, right? And so God's state network are three contenders for the Leviathan, right? That power that hovers over fallible men and makes them

behave in pro-social ways that aligns them. Yeah, exactly, the Leviathan. That's right. This is the actual image, and I think it depicts those three that you were talking about. out. Well, it's funny. That's a really old image, so it probably wouldn't have, you could argue that the network is those people there, but he is, you know, Leviathan also comes originally from the Bible, and then Hobbs, you know, turned it into something that was like the figure that represents the state. But the thing is, one of my concepts in the book is, the network is the next Leviathan. It is contending with the state. And you can do some really fun stuff with this where you say, God's state network are not just pure forms.

You can do mixes. So, for example, God plus the state, that is like the 1950s, U.S., where people fought what? For God and country. Right. That was like the Marine Corps, for God and country, right? So it's God plus the state. Or you have, like, God plus the network, that's like the Jewish diaspora before Israel, or God plus stateless network, that's the Jewish diaspora after Israel, where they have a religious state, you know?

Okay. And then we also have the network state. That's also a hybrid. So it's a different way of understanding. constant of the network state, I think it's a very fun term because you can define it in several different ways as the fusion of these two Leviathans, right? The network and the state are colliding with each other, you know, Bitcoin versus the government trying to seize it. And so building a state, which leans into the network is that concerted like re-centralization, rather than just decentralization

in the network and the centralization state, the network state is the recentralization. Belaji, I'm a little rusty on my Hobbs, but it's like also baked into the Leviathan concept is this concept that has been, I guess, core to the nation-state principle of a monopoly on violence. Well, this is why the Leviathan is holding a sword. That's what that represents. This is why the Leviathan in the picture was holding a sword. And of course, you know, crypto is very much a non-violent movement. But there are these world coordination problems, right? You know, like we can't have slaughterbots going out in the wild or like, you know, bio-weapons, right? Some network state comes up with this incredible bio-weapon and it doesn't just affect the network

state. It affects the entire world. And so how do we bring that in? Ultimately, the sword, the monopoly on violence. What is the role for violence in the network state as a settlement layer, if you will? Extremely good question. And the thing about this is just to preface it, like, I want to just identify a certain catch-22. If you don't discuss violence and war and so on in this, then people will say, oh, you're hopelessly naive, you know, pie in the sky, et cetera. sorry. If you do discuss it in exact and detail, they're like, this guy's like a tech warlord. Oh my God, right? Yeah, I get seen that. You know, he wants to draw on. Yeah. So there's a bit of a catch train too there. So I just want to first identify that, right? And then propose a somewhat different framing on the thing, which is the way we think about the military and force and so on, it just changes completely online. Okay. It's as different as imagine firing a gun underwater. It just doesn't work, right? And like all the tanks and the planes and the nukes and stuff, they don't work in the cloud in the same way.

They don't work on the internet, right? You cannot just hit a button and bomb Bitcoin or Ethereum. So think about something like this. One of the things that I took from Bitcoin and Ethereum was the concept of physical decentralization as a core part because the internet makes it possible to network enclaves. Little pieces of territory before the internet that were all spread out of. around the world, we're not that valuable. Like if you had a little drip here and a little drip here, but now they are valuable because you can network them together. And it's almost like, you know,

just somebody who's in Hawaii thinking themselves as part of the U.S., someone who's a town over here thinks this as part of the same, you know, network over here, right? Okay. So when you've got something like this that's physically decentralized, think about just logistically what it would mean to bomb something like that. First, you'd have to find all the notes. That itself is non-trivial because a network state or network archipelago or network, you know, society, it doesn't need to make all of them public. It doesn't, in fact, need to make any of them public. It can still prove its population and annual income in square meters. Why?

Through some combination of zero knowledge proofs in crypto oracles, right? So it can prove how big it is while proving only that. You know, and you can put that proof. You'll stuff to trust the crypto oracles or it'll have some, more generally, some trust model for the crypto oracles, meaning you have some probability that this particular. particular Crypto Oracle is misreporting, and you've got some independent check. They reported it as 1,000 square meters. We resampled, you know, 50 of their properties. There are 950 square meters most of time. They're somewhat overestimating, but not by a huge amount, right? You have some model for the Cryptoracles' reliability. You can frame it as an estimation problem of how reliable

they are. The point being that this society does not need to give away its entire position. Okay. It can be something that is new, a secret state. And encrypted state because the network that overpins the state is itself secret. Is that cool? This is so cool. I mean, I guess it lends a hand to the incredible prospect that maybe we can create the state in a way that doesn't require violence. And I'm not aware in the trajectory of humanity of a time we've actually been able to do that. There's a couple. We've always used arguably. I'd like to hear that. But generally, we've used violence as kind of the settlement layer. Yeah. And what's interesting about crypto is we have created this property rights system in Bitcoin and Ethereum and others

that can settle disputes, can settle one asset goes to another place, can enforce property rights without violence. And so while it does seem a little pie in the sky, and I'm skeptical that the network state will lead to less violence in the world, at the same time, we see the examples of Ethereum and Bitcoin, which are a property rights system that is enforced in nonviolent ways, and maybe that is a hopeful prospect that we can actually achieve this. But yeah, comments on this. Well, just as we were talking about the banking layer, needing a foundation to stand on, if we want to make network states that are nonviolent at their core, they need to have this nonviolent foundation to stand on. And Bitcoin and Ethereum, they have their own armies,

if you will. It's the proof of work minors for Bitcoin and in the future very soon, the stakers for Ethereum offering. And Ryan, if you want to share the Leviathan picture that I sent you, Belawjee, this is why, like, you and I have thought about a lot about this. This is a Leviathan picture that I put together forever ago to illustrate the bankless Dow, and I've photoshopped out the sword, and I've replaced it with the bank token, as in it's an incentive-only structure, as in there is no, like, physical enforcement by the Dow. There is only an incentive structure. Now, this might change when we actually instantiate the bankless Dow somewhere physically in the world,

but when we are born on top of these, like networks, like Bitcoin Ethereum, that inherently don't have any armies or any physical capacities. And then we also form DALs, which same same, don't have any armies or physical capacities, but they are still organizing people under a code of values of morals in the same shared space. And as you said, like these meetups that are birthed in physical space and then they dissipate back into the cloud, for a long time, these things will be only be able to have incentive only, carrot only, incentive structures, as opposed to incentive structures with the stick, which is why the Leviathan has a sword. It's meant to represent a punishment-only incentive structure.

Are we tracking here? Yes. Yep. And I think, like, the transition, obviously, from that guy has a fish, let me bash his head and take that fish to that guy has a fish, let me trade him for something, was violence-reducing, right? Like, you know, trade is a very important technology. Animals don't have it, right? Like, animals do not have.

Someone is eating something. They just go and kill that thing to eat the thing instead, right? It's very zero-sum. So the gains from trades vary insanely abstract. So that shows there's some proof of principle. Also, the fact that Ethereum and Bitcoin have, for the most part, got into whatever hundreds of billions, basically without much violence at all, at least within the protocol. You know, obviously there's people and folks have been mugged or whatever for it offline,

but relative to what they are, give a proof point. Coming back to this thing, have you guys know why the internet was originally developed? The DARPA stuff? Yeah, why? Sort of, I don't know. Something to do with the military. belogia. Yeah.

I can't. To retain communications in the event of a nuclear strike. That's right. This is right. Yes. Now,

unfortunately, and I don't want to sound flip about this, what's old may become new again, right? Because, like, there is more probability, I think,

of a nuclear exchange than, I mean, we're flirting with that, right? When you're talking about like Russia and China and hot wars and crazy things happening, you know,

you're just rolling the dice on something that you don't want to roll the dice. on. And the people who set up this whole system of deterrence and whatnot are now long since gone, and a lot of people have inherited and have fingers on a button that they could never have built in the first place, right? So the thing is that if you look at that map, you know, can you nuke a network state or a network archipelago or a startup society? It's actually pretty hard to do. You'd cause, you see, that's the thing is imagine a gun that didn't have targeting, right?

if you pulled, it might shoot the guy next to you rather than the guy in front of you. That's not a good weapon, right? It's not something where the use of force is targeted and proportionate and controllable and so and so forth. People don't usually think of it this way, but like more is not always better. For example, the Soviets had something called the Tsar bomber. There was this gigantic nuclear weapon. It could have like blown up all of Western Europe or something like that.

But it wasn't useful as a political tool because their goal was, you know, basically to convert people to communism. not genocide them. Maybe after they convert them to communism, then they genocide them, okay? But they weren't admitting it like that. They thought they were going and doing a good thing, comrade, right? And moreover, on the other side, if you just nuke something and it's all glass, then, you know, like there's nothing there to conquer. You know, you basically want to use the minimum amount of force to capture that territory

and stop them from fighting you back and then return to trade and peace. And so the concept that like guns and bombs and stuff are plums. political weapons where you basically punch somebody and you're like, yield, and they don't yield, punch, punch, punch, yield, right? Like, you're hitting them to get them, to get the fight to stop, basically, right? Unconditional surrender or conditional surrender or whatever it is, you have conditions and punch, punch, punch, punch, negotiate, right? That's basically what conflict is. That's why people say, war is politics by their means. Punch, punch, okay, the leverage has shifted. And, you know, now you get punched back. Okay, the leverage is shifted back the other way. Okay. So all of those

tools that people think of as tools for coercing the other side offline, basically they all have to be completely reinvented online. It's like firing a gun underwater, right? This stuff just doesn't work online. Like, you can't nuke online. You can't send Apache helicopters online. You know, a concrete example, if your if your wallet is stolen physical wallet in front of a police station, a police person can in theory run after them, grab them, bring them back. If your cryptocurrency is stolen, that police person has zero. I'm going to do, like launch some Interpol thing to track down some person in Turkey or, you know, like Moldova or the UK that stole the money, right? The physical force isn't work in the

same way. It does. It strikes me that the physical force doesn't work. There could still be wars and conflicts, but it's also striking that these might be digital. These might be black hats and hackers and, you know, coercion to have a core dev flip and inject some malicious code into a major patch or something like this. That's right. So it looks actually like what we have now, which is social war and financial war with, you know, this is all happening in the cloud and occasionally gets printed out into the physical world with assassinations and drone strikes and riots and bombings and so and so forth. I'm not saying that like large-scale wars like Russia, Ukraine, like never happen. Not at all. In fact, I actually think we haven't

talked about China that much, but one of my projections for the future is a centralized east and a decentralized west. China and India are at different stages in their civilization. life cycle. This is something the sovereign individual, I think, is not, I think, sovereign individual is a good book, but it's not a global book. The counter decentralization, I think, is going to triumph in China, probably, at least over the medium term. And the counter decentralization, just like the reformation, the counter-reformation, like Protestants, and then Catholics didn't just accept that Protestantism was going to sweep. They had a counter-reformation against it. Similarly, we have the decentralization and the counter-decentralization, I think,

wins in China, but it loses in the U.S. and that's how you get Chinese control American anarchy. But the thing is that that means that the large army is probably, it's possible that for some period of time, the largest army in the world is China's drone armada, which you just don't want to see that black cloud crossing the horizon. Wow. Okay. That, like, you know, I don't know if you've seen their factories and stuff like cranking

out this, you know, I followed this, unfortunately. But unfortunately is a key word there. It's, it's, it's terrifying. Yeah. Well, the thing is also that stuff goes down. It doesn't just scale up, it scales down. It scales down into like assassination robots and other types of stuff, right? You know, when you start thinking about that stuff, then you're like, okay, digital defense, the security starts in part with obscurity.

It's not all of it. But stealth is important in war. That's why you have a B2 stealth bomb or so on. That's why don't disclose location. that's why I use pseudonyms online. That's why I have a secret state, an encrypted state, a distributed state. That's why, you know, actually masks in public, it's actually good that they exist, right? Basically, you know that saying, like, the internet is an untrusted environment.

Have you heard that before the untrusted network? So, you know, it's complicated, but basically treating your startup society as the high trust zone. And then zones outside that as potentially bad lands, I think will be, common in some regions of the world. It already is, okay? But I think more common in some regions. And in other regions, there will be surveillance. And we want to build kind of that third region, which is the sort of liberal, free society you have today where people can walk around without a mask and without like their shotgun and whatever, but also without the surveillance drone of hovering overhead. So rather than American anarchy or Chinese control, can we preserve this sort of, you know, pretty decent life that we have now?

or not just preserve it, but build a better one. That is the hope, and that's certainly the hope of crypto. I want to get to one other criticism of this idea that's maybe more on your term. And that is the idea of like, Belaghi, but what about everyone who is not wealthy? Oh. Okay. In the short run, what you're talking about maybe to someone's ears comes off as like, oh, cool, the crypto bros, they want to go create another, you know, nation state,

and it's going to be like another board ape yacht and only the cool kids can come. and, you know, it's just for the wealthy sort of tech elites of the world, it's not going to help the average individual citizen in an emerging country. What do you say to this criticism? So I reject this one completely, and let me kind of go root and branch on that, right? So the first observation is America isn't just a nation of immigrants. It's a nation of immigrants, right? Meaning something like 90% or so of the U.S. left. They left Poland. They left India, they left Vietnam, they left Mexico, they left wherever to come to the U.S. And in their leaving, they weren't necessarily rich. In fact, many of them were not rich, right? They were actually folks who were locked out of their existing political system, and that's why they left.

In fact, the whole concept of, quote, the rich and the poor is actually too simple because a good way of thinking about it, Peter Churchill talks about this is, you know, there's the masses, there's the elite, and then there's a counter elite. and the counter elite, for example, of San Francisco, the tech folks lost. Because they lost to the political elite, they had to leave. And the political lead are pretty darn rich. If you go and look at the political elite of San Francisco, they're quite wealthy, but they're not just wealthy. They're powerful.

They're politically powerful. So the folks who are leaving are not the rich. They're the politically poor. Okay. They're the politically powerless because if they had a political power, why would they leave? They would just transfer them to society as they saw fit. Right. So once you add that other axis where there's a significant power deficit, and one way I kind of, to take this to like extremists, was Stalin rich? It kind of breaks the scale, right? Stalin was powerful? Was he a billion? I mean, he could command anything in the USSR. He could basically like hit a button and get root on any tank or whatever that he wanted. You know, people waited on him hand and foot. But he didn't carry cash to pay for things. He just seized things. He had power, but not money. That's the extremist example of showing the political power is not the same as money. And in fact, if you were some poor wealthy guy in the

Soviet Union, Stalin would liquid, he was definitely more powerful than you. You'd leave. You'd be a Kulak, you know, you'd be denounced as quote wealthy. And so the whole thing about all the wealthy, blah, blah, is meant to, I think, usually obfuscate who has political power. And the political elite versus the tech elite or mercutile elite, that is this eternal sort of dance, right? And that's the dance. And I think that's coming up, but it's already ongoing. between the cloud and the land. Right? So that's kind of one or a couple of major reframes. The first is that if the U.S. is a nation of immigrants, it's also a nation of immigrants.

And that means the most American thing in the world is to leave your home and search for a better life. So probably that person who's saying this, you ask them whether they would denounce their ancestors and were they betrayed, they were super rich to leave Poland or Germany or Vietnam or South America or Mexico or India. Were they super rich? No, they were not, right? they left because they lacked political power in some key way. Sometimes that was, you know, literally fleeing like genocide or war or revolution. Sometimes it was just searching for economic opportunity, but they didn't have the political power to drive that at home.

Okay. So that's one. Number two is, even if it's only a small group of people that leaves, the frontier shows reform for everybody else. Only a small percentage came to the United States. and that had so many reforms, so many new things that the world benefited from, right? Only a small percentage of people left to go and join Google. That created all this good stuff for a time for the whole world, even if it's become evil now. And so the percentages don't necessarily matter so much as the example to show on a new, you know,

bit of terrain that you can do better than the old society. If keto kosher worked, if there were, that is that example of that one commandment, if that society worked, if you had before. for and after photos with all these people who are, you know, going from fat to fit or at least, you know, dropping weight, that would be copied, right? You're actually doing something for the common good by shouldering the risk as this startup society, figuring out all the bugs, and setting an example for the rest of the world in a consensual way, 100% consensual. It's 100% democracy, not 51%. 51% democracy is 49% dictatorship. The 51% is basically dictating to the 49%

Whereas in a startup society, everybody's chosen to be there. Everybody builds that example. And then anybody else can adopt that example should they see fit. This example point is really interesting because I was going to add another critique to the pile here of like you were talking about basically, I'm envisioning this kind of castle of, you know, classical liberalism, you know, freedom and property rights and these sort of things for the individual. And we're at a castle wall. What's coming is kind of this army against that idea of authoritarianism, right? what you're also inviting in the network state idea is that people abandon the castle wall essentially opt out, stop defending it. And like the question here is, or the criticism here is, Balaji, if all of the good people leave, all the people with strong conviction, strong values about these Western ideas of democratic representation, if they leave for the network state, then the existing democratic nation state, the West, as it were, will erode even

faster and leave them in the hands of nuclear bombs. What is the argument to that? Is it still the example? There's a slate of hand there, right? The most important word there in that thing was all. All? You know how hard it is to get people to move? It's not even going to be close to all.

It's like a tiny, tiny, tiny fraction of people that will do this. I would be extremely, I think it'd be, think about it, it'd be incredibly impressive to have a million-person network state, which is not even close to all. That's like less than one-one-thousand-of-the-world population by like 20. 30. That'd be insanely impressive, right? So the concept of, Balagia, your concept is so ridiculously persuasive that everybody is going to drop everything and do it, right? It's not just, it's not going to happen, right? It's going to be something that I think there are some good concepts there, but we will see, you know, like gradual exit. Now, with that said, after critiquing all,

let me try to steal man it and give, you know, a different thing, which is, they're like, well, if everybody leaves, who is there to maintain? Well, who's there to maintain BlackBerry? who's there to maintain Barnes & Noble, who's there to maintain Blockbuster? Some old institutions should pass such that others can be born, right? And, you know, who's there to maintain, you know, I don't know, the town where the, you know, Puritans left in England, right? Ain't there, right? Just, you know, basically, but the thing is, and this is crucial, what I'm trying to set up

in the book is something where the new societies are better than the ones that were left. They are attracting people because they are better. Everybody, there's a continuous vote of confidence in these societies because people are staying there and not leaving. It is a continuous plebiscite. And it's not just on a two or four-year election cycle. It's not with politicians who have non-binding campaign promises. This is the most binding campaign promise of all. You know why?

When that president of a starb society advertises their startup society as what it is and you come there and if it doesn't match, you leave. right? By contrast, you have no recourse when a politician scams you out of a vote. And we are so used to them doing that where you vote on the basis of, I think they will do X, Y, and Z, and they do A, B, and C, or then they don't do anything at all. And then they can always say, oh, I was blocked by these other people. The point is, if you invest in a CEO or you buy a product and they give blah, blah, excuse that they, that's why, you know, you ordered orange juice, they give you milk. That's just breach of contract, right? You're just going to go and find a different and a different product.

And so all of that concept of recourse, of optionality, all these things that we know are just so crucial to making markets function, to making lots of aspects of society function, people are actually over-morality when it comes to the existing system. And the reason they are, by the way, and I argue the reason they are, is because they see no alternative. Right. Once they see an alternative, I mean, notice how actually in some ways the commentary on the Fed was much more passionate in the early 2010s than it is now, right?

I'm saying it won't wrap up again. But over the 2010s, everybody who just really disliked the Fed and thought it was unjust, just exited for crypto and built a better system. And now that is there as a life raft to take over when the previous system collapses because it is not always true that just more effort will prop up that existing system. Sometimes it's the Titanic. And that's just throwing good money after bad, good talent after bad. Having people being able to build that life raft and realizing that this person's estimation

of their abilities as a reformer, they may be wrong. You know, sometimes you just cannot, you know, go clear and bring them back to life, right? It's very important that there's diversity of opinion and somebody can go and have this minority report and start something new because you might rely on that. Look at like, you know, what happened with COVID when all the delivery apps and all the things that all these journals had made fun of, they've realized. lied on them. They needed them, you know, like to do things. And they were so, you know, there's a time, there's a period where they should some gratitude for the first time of their life. But it was

something where they're like, oh, I'm so glad that these, you know, apps and so on exist that it's a lifeline. Now, it turned out, you know, with lockdown and so forth, you can critique many aspects of that and whether any non-pharmaceutical intervention even work. Point being, though, that all these things that people thought of as toys or not a big deal became absolutely essential. Right. Right. Belaghi, I think there's a lot of the listeners who are listening to this and you are articulating what was previously a vibe into an actual actionable path forward. I would actually like to get into the actionable side of things. So like say we actually get into this future network state,

I don't know what your trajectory is for this on the timeline, 5, 10, 50, 30 years. But the idea is that we're talking about it now to manifest it into the reality in the future. But like what is the short term path for this? What are we doing in the next 6, 12, 18 months to like manifest? And we're this vision. Okay. So the first thing is, you know, DM me if you're building a startup society. Okay. And if you're starting a startup society, if you're doing something with aspirations of becoming a network state, and, you know, the reason I don't say starting a network state is, as I mentioned, I try to reserve that for the thing that has diplomatic recognition, right? But if you're founding a startup society, message me, I may invest. That's number one. Number two is we have a new dashboard at the networkstate.com front slash dashboard, which is tracking 23 startup societies. Number three is I'm going to be like shipping, hopefully a bunch of things that serve as catalysts for the space, right?

Like this dashboard kind of shows that this thing is real. Belashi, what's that? Can we pull up that dashboard? Yeah. As you're talking, what's the link? It's the networkstate.com front slash dashboard. So it's essentially something where, first of all, just showing this, people are like, whoa, I didn't realize there were that many of them. Right.

And pulling them together, we just did like a Twitter spaces the other day. you can listen to that. And they were all like, oh, cool, my one commandment is this. And my one commandment is that, right? And we're starting to bring some degree of organization, legibility, you know, like, it's like early crypto in my view, except, and this is important, this is not a, remember my God state network framework, right? This is not a list of networks.

It's a list of societies and potentially eventually future states. Okay. Wow. I didn't even know this existed. This is very cool. Isn't this cool, right? So click all of these, take a look at them. They're early, but they're not incredibly early.

Collectively, they've raised like a few hundred million in venture. So it's like this thing is happening, right? And so one way of thinking about my goal over the next five, ten years is to turn 20 startup societies into a thousand. Why? If you can do that, it's way harder, by the way, to go from zero to 20, then from 20 to a thousand in a certain sense, right? If these business models work, if some of these business models work, if some of these business models work, and there's a variety of different things, and these societies scale, and, you know,

we are seeing a lot of different experiments in living, then you have lots of different options for people suddenly. You're giving back agency to people. They no longer feel like they're just on this Titanic that's falling and they vote for people and nothing happens. They can find people of like mind and move in with them right now, if they'll be accepted, right? That's so important to kind of return agency to people. That's actually really the essence of, quote, democracy is, you know, the consent of the governed, right? Like the choice that the citizen has a real choice. It's not just, you know, checking a thing on a form that's like a pro forma kind of vote for somebody. They're not voting against something. They're voting for something. They're voting with their feet.

They're voting with their wallet. And then there'll be voting as they join this new community, just as their ancestors probably emigrated before them. Okay. So this is basically the concept is concretely, there's a book. I need to do the V2 of the book, like the hardcover and the audible. People here should subscribe at the networkstate.com. There's also a direct link like the networkstate.com front slash subscribe. Maybe you can pull that up. And you'll get like the notification and the audible. We'll release all this stuff. And that'll be the V2. And I'm also building this startup society's tracker enlist and investing in startup societies. And that combination is, you know, there's more, you know, I don't announce everything or whatever now.

But let's just say, there you go. There you go. So you'll get notifications and stuff. And by the way, do you like our little logo there? I thought it was kind of funny. Yeah, that's great. You're not right? It's a flag.

It's a flag. It's a flag with a plus for new, like a new document. Okay, the plus. Right. Got it. Got it. So that's a cool. I thought it was a cool kind of thing.

This is great. Pelaghi, this has been so fun talking to you. And I really appreciate that you are bundling these ideas together and kind of making them actionable. I don't know. I feel like we could have gone for another hour or so. and we'd love to bring you back sometime soon to review the progress on the network state, maybe kind of an annual state of the state.

That's a great concept. If we could. That's right. The bankless state. That's right. You've given us some food for thought and some ideas, too. So Bellagie, once again, great to have you on bankless. Thank you.

Thank you very much. Thank you, David, too. Cheers. Bankless Nation, as we call you, very applicable in this podcast. Some action items we will leave in the show notes. The first is, of course, head on over to the networkstate.com, where you can read the network state book. It is free. Blasji has published this open source, so you can go check that out. Also, tune into that dashboard as well. We're reviewing that at the end, but there's a dashboard

of existing network societies that you can apply to join, or also, if this is food for thought, giving you an idea of starting your own network society, you can DM Bellaji on Twitter. Finally, another post for you. I really enjoyed Vitalik's review of the network state after he read the book as well. Has some interesting thoughts and analysis there. So we'll include that as a reference for you. As always, our one commandment to you, of course, is banks are bad, bankless good, and also, risk and disclaimer is crypto is risky. You could lose what you put in. But we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.