The Network State of the Union - TOKEN2049 Dubai 2024

all right well Monday it was Iran and Wednesday it was Iran and that's an improvement anyway um all right so state of the network State uh gonna blast through a bunch of stuff here a lot of new content so first let me give an intro to what is the network State uh the concept is you know we've started new currencies can we start new countries and and talk is in three parts first starting new countries are possible second but why now and third what next right so let's do the first part starting new countries is possible more specifically it's uh you know something I've talked about in this book at the network state.com I think it's not just possible but preferable and profitable let's start with that first part possible basically we've started new companies like Google we've started new communities like Facebook we started new currencies like Bitcoin from uh a white paper can we start new countries and that's cons of the network State here's what a network State actually looks like it is just like Bitcoin is a decentralized currency a network State's a decentralized country it has nodes around the world but the hearts of the people are all in one place this is an example of a network state with 1,729 314 people that has population and income in real estate footprint comparable to that of a legacy nation state like Estonia except all around the world rather than one place that 1 million is kind of a magic number how would we actually get to something that big well you can actually do it just like a normal startup you know here's uh just like Zuck starts out of a dorm room you have somebody starting in Japan with one person they get 17 uh people to c-li around the world and then 172 1,729 they start getting buildings and communities together they've got 17,000 170,000 uh and then eventually 1.7 million and that's how you can actually build a decentralized country now that 1 million actually puts us within country range because most countries are small countries the majority of un countries have uh less than 10 million people only a few countries are like the big countries like you know the US and Russia and China and not only are most countries small countries un membership has actually grown over time since 1945 to the present day the number of new countries in the sense of UN members is increased 4X that's more than we usually think static for a long time moreover we already know that cryptocurrencies rank with Fiat currencies this is a fun website called Fiat Market cap.com if you go there at the time I went there Bitcoin was somewhere in between the Turkish lur and the Chile and PESA this is a few years ago it's higher now okay so if cryptocurrencies can rank with Fiat currencies could crypto countries rank with Fiat countries if you take the Wikipedia table of Nations and the real estate and population and so on a crypto country with 1, 72934 people a network state would be somewhere between laia and Bahrain it would just be Global and decentral calized just like a Bitcoin a cryptocurrency is global and decentralized very analogously we know we've been able to rank on that previous leader board maybe we can rank on this new one now this is how that dashboard earlier maps to that population now one one thing people might say is well you might get big but would you actually get diplomatically recognized and the thing is that the cloud is already doing deals with land so for example GoDaddy is doing deals with tuvalu fortv domain uh Tesla is doing deals with Nevada for the Giga Factory uh you know El Salvador is adopting Bitcoin as it's National currency and in general I can give many examples of this the land is already open for business and doing deals with the cloud so a crypto Community could probably get at least a special economics Z or something like that from a a traditional country especially if you've got capital and You've Got Talent so that's why it's I think it's possible why is it preferable well basically um there's really two groups of people the same groups of people that are into crypto it's a power list and the power users okay it's those folks who are trying to hang on to a bank account or a country and those are pushing the limits of what a bank account or a country even are and you know all these people who are living in failed States or failing States you know Sri Lanka and Venezuela and Panama all these riots all the inflation that's being exported around the world if people in rich countries are having a a tough time if people in poor countries are having even a tougher time they need you know new States and then of course there's also the Pioneer mindset that led us to you know as humans leave Africa you know go to the us laying on the moon um that Pioneer mindset lets us to push the limits of what countries even are so that's why they're preferable and why are they profitable this is last but not least financially feasible is a form of feasibility this is a great table that shows uh the annual revenue per user of nation states social networks and network States and so the x-axis there is the number of people in millions and the y- axis is annual revenue uh per user per capita and so over here for example are the social networks and so that's like you know uh Facebook or meta and WeChat and you know LinkedIn and so on and so forth and those got have got billions of users but if you look at the y-axis they've got only on the order of tens of dollars per person per year so $10 times three billion users is 30 billion per year pretty good business if you can get it over here are the small countries they only have a few million users like Estonia or Singapore or what have you but their monetization per person is like tens of thousands of dollars per person per year okay here are the big two countries the US and China which have a lot of scale very large populations on the x-axis and high monetization per user in terms of tax revenue per year on the y- AIS and I think Network States would land around here where they're between 1 to 10 million-ish people and the monetization per person per year is in the hundreds of dollars perhaps for a a dow membership and eventually into the thousands of dollars per person per year for rent or Community membership or something along those lines and so you know this but these can grow and these can become big but this is why these could be financially feasible and and potentially Venture back okay so that's why I think starting new countries is possible but why now what what is the moment that's happening now so the reason I think this is going to be happening now is uh I have a concept which I call history is running in Reverse okay and what do I what do I mean by that so let me just show you some examples so if you go backwards in time you see certain events that are happening today but with the opposite sign the opposite direction for example you go back to 1890 the Western frontier closed forward to 1991 the internet Frontier opens you go backwards in time you have the Spanish Flu forwards in time covid-19 backwards in time you have the captains of industry the robber barons today we have the tech billionaires backwards in time the journalists actually beat the founders Ida Tarbell investigator Rockefeller they busted the trust all the great fortunes were pushing into foundations there was communism all the seizure of the the great fortunes today the founders are beating the journalists ha okay um back then the New York Times was on the side of stalinist Russia to choke out Ukraine today the New York Times is on the side of Ukraine versus Russia back then America actually shipped Goods to China this is an amazing cartoon forgive The Stereotype in it but basically it's showing Uncle Sam taking all these Goods to China which is just a market okay now today it's completely the opposite where it's China that is shipping all these Goods to America I mean the reversals are amazing I'll show you a few more back then Russia was the senior partner in the you know sinos Soviet relation right Stalin was senior ma was Junior today it's reverse where China is a senior partner in the China Russ relationship and back then there was a British guy who ran India today there's an Indian guy who runs Britain okay it's kind of funny all right so we can see history running reverse quantity L as well um this is a very important graph which shows the geocenter of the global economy for thousands of years it was in Asia and or EUR Asia let's say and then with the Industrial Revolution over the course of hundreds of years it rocketed out to the west and 1950 was Peak westernization that's when the center of the world economy was positioned between the USA and Western Europe and people think that's the natural state of the world because it's the beginning of the postwar order but it's actually one of the most atypical times in human history it's like balancing uh something on its head it's when the West was very very powerful and the rest of the world wasn't and so what's happened since then is that the world economy the center of is rocketed back east and it's happening now in tens of years so it's in the East for thousands of years it went West over hundreds of years and it's coming back East over tens of years and these kind of U curves you see in many different places another of them is on tax rates so now there's exceptions to this and you can you know point to Candace's recent boost but in general mid-century was a time of communism in the East and 90% marginal tax rates in the west and those have broadly come down and in the same way fortunes the great fortunes were seized and then they were released and this always talked about in terms of inequality but actually in some ways power inequality is decreased because if you were uh you know a an entrepreneur you were just confiscated in the Soviet Union or China or actually to some extent even America gold was seized and mid-century is very hard to start a business and now you can actually do that other things that have run in reverse back then you know the US was 10x Chinese steel production today China's 10x American steel production um back then uh America was ideologically unified it was like a single unip party where all the people these are congressmen but they Democrat Republican they voted basically the same way by 2011 that was completely split apart it's like mitosis of a cell and in fact I'm saying America's ideologically disintegrating but if you look at social networks it's not just ideologically disintegrating it's ideologically ideolog disintegrated because uh on the left you have Macedon and blue sky and threads and on the right you have gab and parl and Truth social these networks have millions of people and if you go there they're both speaking English but they have completely different worldviews and values it's like people speaking Korean these are in North Korea and these are in South Korea they've already ideologically digitally seceded from each other and that remains to be printed out in the physical world so that means we're going to see new countries because that's happening all around the world all kinds of places are getting split ideologically and it just hasn't been printed out yet now remember this graph the graph of all the new countries rising from you know 45 in 1945 all the way up to um you know about 4X that number 196 or so today an interesting thing what what led to this well as the British Empire broke down as the French Empire broke down the blue c countries there are like basically the countries that that gain independence from France and then a little bit later in the 80s late ' 80s early 90s as the Soviet Empire broke down um in 1991 all these new countries there's a sudden burst of new countries that got formed interesting question is what does this curve look like if we go forward you know backward and forward in time if we if we go backward in time and we ask what what what happened with this curve before 1945 well something really interesting happens most people don't have a good mental model of what the world was like before then but if you go a little bit further back in time and you actually get lots and lots of independent states for example this is what what is today Germany looked like before bismar this is what India looked like the princely states if you go backwards in time and if you zoom in to even one section of India it looked completely fractal in the physical world because in a sense it was unified at the community level at the cloud level but not at the land level okay if you printed out a social network it would look like this okay and and that's kind of what's what's happening so you go backwards in time you have this enormous rise in IND independent states okay and why did that actually happen you know that's that's really surprising if you go if you get more independent states as you go backwards in time 1950 was actually Peak centralization that was in a sense like the the minimum number of independent states and why did that actually happen well my answer for it is in the past uh the world was decentralized there wasn't a lot of centralized power so it's like the loosening of a fist by 1950 due to Communism and the rise of these giant centralized States the world got clutched into these Giga States huge unions were formed and now we're getting red decentralization those centralized states are losing power and that fist is ungraspables everybody clumped together you know at at an assembly line and the sovereign individual right so that's the technological aspect of centralization and red centralization the political aspect looks like this where all of the people are you know voting together and now they're all coming apart so that's why history is running in reverse and the thing is though we aren't done red decentralizing we went backwards in time what if we go forwards in time so I believe that we're just at the beginning of an explosion of new countries just as we are in the middle of an explosion of new currencies and you know you probably heard this term the multipolar world if you're here at a cryp conference in Dubai you might be familiar with that and um you know even Foreign Affairs is starting to admit the world is multipolar all these people are tugging on in different directions and you know Sunday Telegraph wrote this article you know is the increasing multipolarity dragging the world into chaos now there's an interesting quote from a guy who's actually the president of Kazakhstan and he says if the right of Nations to self-determination was realized in reality over the whole globe over 600 States would emerg on Earth instead of 1993 of course that would be chaos now why does this guy say that well he actually lived through the collapse of the Soviet Union but all these states emerged and if you go into Wikipedia look at the post-soviet conflicts there was a lot of conflict there was a lot of chaos and that actually may be a preview of what is to come if we extrapolate everything out because there's more you know uh centrifugal in the sense of centri fleeing forces around the world more decentralizing forces than even there were in 1991 so rather however than just accept that there's going to be chaos maybe he's right but maybe we can forge a new order out of that chaos maybe we can ride the tiger maybe we go from slinging around coins and tokens which is fine to actually building new cities and new countries and maybe that's what's next so that's part three this is why I wrote the network State book and that's why we've started to hold these Gatherings uh so vitalic held Zulu last year some of you may have attended that in Switzerland uh Vitalia which was in Honduras um this was a uh a gathering of people from the cloud Who all believed in life extension longevity we had the network City conference last year we're going to have another one this year I'll announce it and we're going from Gatherings to building a movement so there's now dozens of networkstate related startup Society projects on gitcoin we've got a dashboard of this at at the network state.com they just la TNS Camp a network state camp in Austin so all of these movement leaders Community Builders going from becoming CEO of a company to president of a community or president of a country I think that's what's next and you know it's still early of course I would call it pre 2013 crypto we have yet to see the first starup Society unicorns or what have you but this space is bubbling and things are happening and we've started new uh companies we've started new communities we've started new currencies can we start new countries I think we can so thank you very much [Applause]