Can Tech Entrepreneurs Really Crowdfund a New Country? Inside the Network State Movement

The Crypto Bros Who Dream of Crowdfunding a New Country

Do you look at the possibility of political turbulence ahead of November’s US presidential election and think: democracy could be in trouble? So does a group of tech entrepreneurs backed by big Silicon Valley money. And they love it.

Imagine if you could choose your citizenship the same way you choose your gym membership. That’s a vision of the not-too-distant future put forward by Balaji Srinivasan. A rockstar in the world of crypto, Balaji believes that pretty much everything governments currently do, tech can do better.

I watched Balaji outline his idea last autumn, at a vast conference hall on the outskirts of Amsterdam. “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?” he asked. Balaji is a former partner at the giant Silicon Valley venture capital firm Andreessen Horowitz and has backers with deep pockets.

Silicon Valley loves “disruption.” Tech startups have been disrupting traditional media for years; now they are making inroads into education, finance, and space travel. Balaji stated that if startups could replace all these different institutions, they could replace countries too. He calls his idea the “network state”: startup nations.

How the Network State 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, existing alongside existing nation-states, and eventually replacing them altogether. You would choose your nationality like you choose your broadband provider.

There is nothing new about corporations having undue influence in the affairs of nation-states; however, the network state movement appears to have greater ambitions. It aims to replace governments with companies.

The Rise of the Corporate King?

At a pitching session in Amsterdam, a young man named Dryden Brown expressed his desire to build a new city-state governed not by a giant state bureaucracy, but on the blockchain, the technology underlying cryptocurrency. His project, Praxis, aims to embody the ideas of “vitality” and “heroic virtue.” While he was vague on the details, he claimed Praxis was backed by funds with access to billions.

In this niche world of startup nations, cryptocurrencies are loved. They are seen as the future of money—money that governments cannot control. The attendees at the conference included tech entrepreneurs showcasing some of these “startup societies.”

Dystopian or Revolutionary?

There are those who view the network state idea as a neo-colonial project that would replace elected leaders with corporate dictators. Others see it as a way of cutting through what they perceive as the regulation-infested state of Western democracies today. The conference included projects like Culdesac and Cabin, which aim to create network cities in various locations.

The Future of Citizenship

The network state concept suggests that online communities can crowdfund territories and eventually gain diplomatic recognition from pre-existing states. As the US heads into a presidential election, the movement seems to be waiting in the wings for an opportunity to reshape governance as we know it.

Between the Lines

The movement appears to yearn for a specific conception of Western culture—a Nietzschean world where the fittest survive. Critics question the feasibility of starting entire cities without any government, and the implications of corporate governance.

As I left the party hosted by Praxis, I reflected on whether I had witnessed a glimpse of the future or merely a gathering of tech enthusiasts roleplaying as revolutionaries. The network state movement is certainly ambitious, and its advocates are eager to explore what lies ahead in a world where democracy is in trouble.