#606: Balaji S. Srinivasan The Network State and How to Start a New Country

In the 2010s, we started to ask a question that we had never really asked in the 2000s, and that question was 'What is a currency?' In the 2020s, we're going to start asking the question, 'What is a nation?'

If, in the 2010s, social media became what all politics is about, by the end of the 2020s, cryptocurrency becomes what all politics is about. You will not be able to fund your government without it.

That surge of anarchy in 2020 that came down, yeah, 2021/2022 was more peaceful than 2020, but it's way more anarchic than 2017, which is itself more anarchic than 2012. So, American anarchy is on the rise.

People have been so freaking angry at each other during the 2010s in a relatively booming market ... And when there's, like, actual genuine scarcity, if that does happen, if physical goods are hard to come by and inflation destroyed your currency and so on, and you have a country where people are heavily armed, and they're yelling at each other on social media... You've got a very potent cocktail for bad things.

Basically what I see is serious inflation, Bitcoin mooning, and then the US government trying to freeze or seize the Bitcoin with something that's similar to Executive Order 6102.

When you walked out of your house in the 80s or 90s, you'd have your wallet and your keys and then maybe your credit card. And then later, you have your phone. It'll be a physical wallet and a physical key and a credit card and so on. And eventually, that's all going to converge into a different kind of thing, because it's amazing that your cash and your wallet and your keys to your car and your credit card can all be thought of as a private key on your phone.

They're going to be forced, probably, to bring interest rates all the way to the floor, maybe before the 2024 election, and I think you will see very serious inflation as a function of that.

People who are really asserting that the reserve currency won't fail are often the ones who kind of suspect on some level that maybe it could, and they just can't imagine a world without that, and they don't want you to undermine their God.

The worst thing to do is buy an asset when it's in the news and sell it when it's in the news.

I think Bitcoin maximalism is the most important ideology in the world that people don't know about.

The US economy, we have run out of juice. The Federal Reserve being able to print money and so on, it just keeps going down on this trend, like interest rates. And if you notice every time they try to jack it up, it has to be pushed back down and kept down for longer and longer and longer.

Bitcoin's core value proposition is seizure resistance.

If those folks can hit a key and freeze your assets, you don't really own your assets.

We're sort of re-entering high-volatility times ... Companies and governments shield people from volatility to an extent that we don't really think about it that much, and now that shielding is going away.

A network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of stability, an integrated cryptocurrency, an archipelago of crowdfunded physical territories, a virtual capital, and an on-chain census that proves a large enough population income and real estate footprint to attain a measure of diplomatic recognition.

Democrats will only marry Democrats to a higher percentage, and Republicans are tending to only want to marry other Republicans, and that has being growing.

Once you define a community on the basis of what they think is good and bad, it's so strong. It's ridiculously strong because they agree on the basic premises ... You don't have politics in the same way, because they don't have internal disagreement; they have alignment. They agree on what the good world should be. And then they can crowdfund things; they can appoint leaders; they are essentially organically aligned for a cause.

Outside, people would think I'm a Bitcoin maximalist, but it's a log scale. To a truly devout Orthodox Bitcoin maximalist, I'm a statist cuck.

Assets that can't be frozen or seized are your assets. And Bitcoin has a root system that extends way outside the United States to hundreds of millions of people around the world that value it. And that is not the case for your frozen assets on a stock exchange, for your valueless dollars... There's a shelling point that has been built up, which is probably going to be Bitcoin.

Many non-white people will shift to Bitcoin orange ... Inflation is absolutely crushing people of color.

Censorship is going to increase dramatically if inflation happens. You know why? Because in Argentina, in other countries where inflation has happened, the government argues that talking about inflation causes it because you're causing people's price expectations to rise. Therefore, you're disloyal if you talk about inflation, and you're undercutting the stability of our society.

The majority of English speakers on the Internet are, or soon will be, Indian. English-speaking culture is going to be influenced by Indian culture. It's just like this total thing that's not on people's radars. They have not priced this in. Most of your followers will probably be Indian by, like, 2030, or something like that.

I kind of think that by 2040 or 2050, maybe sooner, maybe later, that there's a chance that this century is the Chinese state versus the Indian network.

The fundamental value of cryptocurrency is can you have a system where the root permissions are independent of the US and Chinese establishments? That is the fundamental question—is one of digital freedom.

In one sense, we've got far more information than we've ever had. In another sense, I know we have 100 or 1000x left to go.

Similarly, a lot of people... They'll be like, 'Oh, but it will give you cancer,' or 'Steroids will screw you up man,' or whatever. That may be the case if you are not throwing all the science and engineering in the world at it.

The US is not really a nation-state. Arguably, it never was, but it's not really a nation-state. At a minimum it's a bi-national republic, which has the red and blue nations underneath it.

We have not yet had total cyber war. We're going to see some crazy things as a function of that. And that's going to push people to truly 'not your keys, not your coins' type stuff.

I think that maximalists will introduce a constitutional amendment for no seizures of Bitcoin. Just like free speech or right to bear arms, can't seize Bitcoin—fundamental right.

I think Bitcoin will draw significant support from the working class Democrats because of the inflation thing ... It doesn't matter what the establishment says, how good their propaganda is, when you're seeing your money crumble underneath.

The reason that guy is saying to you that the reserve currency can never go away is he worships the US government in a sense. Even if he doesn't understand it, he really thinks it can never go away.

Google has, literally, billions of users. It has, if it decides to use it, the power to shape language and speech and thought with its suggests, with its autocompletes, with things like this.

I'm bullish on Indians and modestly bullish on India. That is to say, the Indian state, I'm very modestly in favor of, or very modestly bullish on; but the Indian network of the global diasporic Indians... I'm very bullish on.