Network States: What They Are and Why You Want To Bet On Them
123: Making complex ideas ready for real-world application.
Welcome, reader! After a wild week in crypto that was impossible to ignore—congrats to those who made a fortune. We are diving deeper into the related topic: network states. What are they, why would you want to be part of one, and what is their purpose? There will be much to digest for those who have never heard about them.
Network States
Note: This is a highly complex topic. The goal is not to discuss the details or systems behind the network states or whether they can be achieved. The goal is to show you their value and what you should consider regarding them. We will see many more projects and communities emerge as technology advances, and the divide between those who are comfortably numb and those who want more becomes bigger. Pay attention.
Network States: The future. No one can deny it—it should be pretty clear where things are heading and what is happening. Better said, what kind of power do online communities with the same approach and belief system have. Most tech workers know about Effective Accelerationism (e/acc), which is a solid example. It is powerful to unite people who share and spread it. Often, you can hear negative comments about how communities die after the hype period and that they are only temporary. What most people mix up is hype with ideology, which is not necessarily the same thing. Quite the opposite—especially if we are talking about the long run. Things are heating up for them, and it will take years for the movement to reach mainstream popularity—talking about e/acc. The topic we described a few months back in the internet turning pay to play and the kind of power it will bring to those in the right place at the right time. Network states take online communities to another level. The low-level approach to network states and what they are would be cloud first—physical land later. The general idea is to connect like-minded individuals (from the tech and crypto world primarily) and base the economy around smart contracts, virtual currencies, and a government that wants the best for its people. Balaji's idea (original creator) is based on the thought that the more authoritarian the government is, the more anti-crypto they are. Similar to what is happening in Europe and with the ideas about how to tax crypto. Why are we covering this? Because the general idea is powerful. Collect the bright minds, let them connect, put them in the same group, and base them on the same geographical area(proximity). Results? Let them create a country. It sounds like a startup approach to building something bigger. Unsurprising, considering Balaji used to give classes on startups at Stanford. The original idea must have been sparked based on those. Not to make the post unnecessarily long or go further into describing what network states are. We recommend picking up a Network State to better understand the basics and main ideas. Repeating ourselves, the complexity of the topic, and the ideas behind it are not something we want to cover in this post—leaving it up to you to decide whether it is worth your time. We would say it is.
The Network State In One Sentence.
Current Environment: Network states make more sense considering the current environment. Everyone can agree that the environment is far from optimal. There is a constant divide between those who want to move forward and those who are comfortable—often wasting their lives away. Those divides will become bigger. Why? Because life will become more comfortable than it already is. Things are moving in that direction, and everyone can see it. Since you can’t separate yourself or find it hard to connect with those who do not share the same values as you. You are not to blame. That is where ideas such as the network states start to make sense. If you know, everyone has the same vision and aspirations to make things better and help others. Why wouldn’t you want to be part of it? From a sociological perspective, it makes a lot of sense. Humans are social creatures. On a deep subconscious level, it leads us to understand that everyone wants to belong to a group that shares ideas and characteristics. That is also why stereotypes and archetypes play a big role in our lives, but we never pay much attention to them. The need to belong and relate to those with similar characteristics, goals, or aspirations is present in all of us. Never bet against tribe mentality. It is also one of the reasons why cults are so popular and will never go out of fashion.
Gap Between The Two: Everyone reading this is far from the average and has at least a few things going on or follows an efficient plan. Which often means that the current environment is far from optimal for those who want more. The results? Unhappiness, loneliness, lack of big ideas, and a general sense of detachment from others—concepts described in our post bet on long-term degeneracy. It's all far from optimal. Those in different situations or who managed to put themselves around others striving to improve and push forward. Congratulations. You did one of the best things for yourself. The reason why we recommend people join high-end gyms and sports where wealthy people are present. It is also the best way to gain insight into what works and how to take your game to the next level. Put yourself around those who operate differently from the rest. Why is this relevant? Because network states are the perfect platform. One that will allow you to connect with others on the same mission. What do we mean by that? We have not heard anyone talk about them or shared the ideas presented by Balaji that didn’t have something going on in their life. How long will it take mainstream media to catch up with network states? At least 5 to 10 years. This means only those serious enough in the first place will be interested in such topics, finding and joining communities such as those. This is how the internet initially worked—it was categorized into sub-niches. Until becoming available to everyone. Slowly losing that initial edge, it had. You can still find websites such as those, but most of those have been long gone, and the general feeling is much more present than niche ones—something that won’t return soon.
People inspire you, or they drain you. Pick them wisely. - Hans F. Hansen
Betting On Network States - Getting The Most Out
The Fun Part: We all know the answer… The fun part is getting the most out of the situation and projects. The same concept applies to network states and what is going on with projects such as Praxis, Afropolitan, or Zuzalu City. You can expect the list of projects to become much bigger. There will be many success stories and more failures—based on the complexity and structure required to pull this off. Betting against network states and projects like this? Not something you should do. It is not necessarily that these projects will reach the whole idea and achieve the independence and sovereignty described by Balaji in his work. Yet, parts of the whole concept will have an impact and will not be avoidable. Not necessarily on the other countries, but with a big enough impact for you to get something out of them. The fun part of the network state bet or any other bet—comes down to what you and the people you care about are getting in return. This doesn’t exclude the fact that you will help others achieve their goals as they will help you. It is expected in this type of community where it's all about being goal-oriented and working on the same vision.
High-Level Betting: What would high-level betting be? The complex parts include citizenship, acquiring a passport, early access to projects that could grow, and access to specific infrastructure—such as location, territorial sovereignty, and potential position in a newly formed government. They might sound ridiculous at first. Yet, if you have read and understand the concept of network states—that’s what you will be getting at a high level. This is why people want to participate in the entire network state concept. It all makes sense when you think about it, more so when you consider how people are tired of the current system. Being inefficient and slow. There is a lot of space to improve positioning by making the right moves and joining the right project. High-level betting is not for everyone, and we would argue that most of the audience will not utilize most of the ones we have mentioned above—at least not in the current state. As network states become more common and increasingly important, high-level betting will start making more sense.
The virtual community is a real community, and it can be as real as any physical community.” This emphasizes the legitimacy of online connections and communities, suggesting that digital interactions can be just as meaningful as those in physical spaces. - Howard Rheingold
Low-Level Betting: What about low-level betting? The part that will make more sense for the bigger part of the audience—at least when writing this. Networking, economic innovation, getting a job, and power (crypto) would all go into low-level betting. These should bring the most results for the majority. Networking is generally driven by people sharing the same ideas and moral standpoints. Economic innovation goes hand in hand with the crypto movement. Meaning that getting a job and accessing the community of people you bond with over time should not be a problem. None of the scenarios mentioned in the post are network state only. When discussing topics like this, you must look at the big picture. If your network state citizen whom you met in Discord works in Google or any other big corporate environment. It means you have gained leverage and potential referral to a position. Suppose you are thinking: "that’s not how it works". You are wrong. That's exactly how it works—that is the power of community. Diving deeper into the network states or having an interest in one should be justified based on this reason alone—everything else should be a bonus.
In business and in life, relationships are everything. - Tom Ford
Conclusion: 1) Understand what network states are and how early the concept is 2) Pay attention to what is happening and where the future is heading—as always 3) Decide whether you want to take part in high-level or low-level betting 4) Leverage your position in the community and help others improve their lives. This is one of those topics that could be discussed from multiple angles. Balaji did tremendous work explaining it in the simplest terms possible. Our goal? Different from his. We didn’t even bother touching on political or social norms the network state aims to solve—general decentralization and the sovereign entity being those. Our goal? To inform you of what is happening worldwide and how internet communities create new boundaries. This allows you to improve your life in ways no one thought possible years ago. Connecting with people sharing the mission and goals. Result? You are creating leverages with your connections, and you are being early in a concept that is yet to achieve the popularity it deserves. What should result from this read? There is a big opportunity for you—one that has yet to be popular. Your goal? Get into it before others and leverage it—depending on your goals and aspirations. Some will prefer high-level bets, while everyone can get something out of the low-level bets. Leaving you with an update on crypto. Still not investing?
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@balajis got a wonderful book on this topic. Incredible read and lessons on history.