Network states: the tech broligarchy who want to create new countries

"We start new companies like Google; we start new communities like Facebook; we start new currencies like bitcoin and ethereum; can we start new countries?"

These were the words of Balaji Srinivasan in 2023, a "rockstar in the world of crypto" who was outlining a vision of "the not-too-distant future", said the BBC. The "serial tech entrepreneur" and Silicon Valley venture capitalist calls his idea – effectively start-up nations – the "network state":

Cyber statelets

There is "nothing new about corporations having undue influence in the affairs of nation states". Beginning in the 1930s, a US company, United Fruit, "effectively ruled Guatemala for decades".

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But the network state movement "doesn't just want pliant existing governments so that companies can run their own affairs". It wants to "replace governments with companies". Here's how it works: "communities form – on the internet initially – around a set of shared interests or values. Then they acquire land, becoming physical 'countries' with their own laws."

The entities would "exist alongside existing nation states", eventually replacing them. This would allow people to choose their nationality, "like you choose your broadband provider", and "become a citizen of the franchised cyber statelet of your choice".

These new states "are not merely theoretical constructs", said Forbes. "They represent a practical reimagining of how communities can organise and govern themselves in the digital age." And in today's "chaotic world" of "geopolitical clashes" and an increasing digital economy, this "sounds more realistic than ever before".

The idea is being powered by a "cultish tech movement that ultimately seeks to end countries as we know them", said The New Republic, and "decentralise governance in the same way that crypto seeks to decentralise finance". The ambitious plan would see "typically cash-strapped countries cede land to tech bros who want to play a real-life version of SimCity".

Another major player is the Coinbase CEO, Brian Armstrong, who told the "Moment of Zen" podcast that we can "tokenise real estate and actual physical land to create better forms of society". It's "hard to imagine any other American CEO openly discussing plans to undermine the US government and start their own country", said the news site, but "even more unimaginably", politicians "across the spectrum are openly embracing Armstrong".

Crowdfunding territory

The players behind this movement are slowly gaining more influence. In his 2022 book "The Network State: How to Start a New Country", Srinivasan – commonly known as just Balaji – said a network state would be "a highly aligned online community with a capacity for collective action" that "crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states".

Srinivasan argued that "these new business-friendly hubs would soon compete with nation-states and, one day, replace them", said The New York Times. He said "The Network State" was inspired by the state of Israel. "What I'm really calling for is something like tech Zionism – when a community forms online and then gathers in physical space to form a 'reverse diaspora'."

His company, Praxis, is looking to build a new city on the Mediterranean, "governed and built by the community", said Forbes. The project has "significant funding" and it has hired a team that includes a former G7 prime minister to support negotiations and city planning.

Last October, Balaji announced "the network school": a three-month retreat for those interested in what he calls "decentralised countries". Details were "shrouded in secrecy", said Wired – even the location wasn't publicly disclosed, although there are indications that it is Forest City, a "duty-free zone" in Malaysia.

A "crucial step" for decentralised countries is "having physical territory": the network school "clears that bar". Balaji said he is working to "build out the real estate" with the goal of "scaling the school".

He also outlined the "values" to which students must conform, including "seeing bitcoin as the successor to the US Federal Reserve, and trusting AI over human courts and judges". "It's for those who want Silicon Valley without San Francisco," said Balaji.

But the network state project "has its detractors", said Wired. Some argue that by acquiring low-cost land and relying on low-wage labour, using such network states to allegedly "hoard personal and corporate wealth", founders "exacerbate colonialism and inequality".