E141: Balaji Srinivasan: The Rise of Network States and the Fall of Nation-States

Balaji Srinivasan (0:00)

You know, just like Rome succeeded Greece, and Britain succeeded Rome, and America succeeded Britain, I think the Internet eventually succeeds America. If you think about Bitcoin, it's definitely appreciated more, or the dollar is depreciated more against Bitcoin. It's on the order of, last I calculated, about 8% a month for the last 10 years. What that means is, since inception, the smart money has been exiting the dollar for Bitcoin. The Balaji Fund, techno capital for techno radicals, so investors, Novel, Brian Armstrong and Emily Choi of Coinbase, Mark Anderson, Chris Dixon of A6C, David Sacks, Gary Tan, Toby Lucky. Here are some problems. High inflation, privacy violations, lack of shared consensus, costly energy, election controversy, security breaches, loss of manufacturing capability, too many other things to name. You can just keep doubling down on that, try to reform that system, or you can build a better one.

David Weisburd (0:58)

Balaji Srinivasan, Balaji, you were the former CTO of Coinbase, a general partner at A16Z, the co-founder of Earn, the co-founder of Council, the co-founder of Teleport. I'm getting tired going through all your background, but alongside being a VC and a co-founder, you're also Wall Street Journal bestselling author of The Network State, which I did actually read over the Christmas break. So welcome.

Balaji Srinivasan (1:21)

Great to be here. And that's The Network State, by the way, behind me on my shoulder over there. So you can kind of see it.

David Weisburd (1:28)

And you're working on the version 2 of the book. Tell me about that.

Balaji Srinivasan (1:31)

You know, I got the first version of The Network State out July 4th, 2022, auspicious day, of course, for starting new countries.

And just as a pure Kindle book, and I basically became a book publisher and had to figure out all the Kindle formats and so on and so forth. It's actually, it hit number 2 globally on Amazon, and I tweeted that out at that time. You know what number 1 was? It's one of the most popular categories on Amazon. It's Billionaire Romance. I was competing for the number 1 spot with the, I think it's like the most eligible billionaire. That book I think is, so it was a bestseller, but it really is sort of, I feel it's catalyzing movement. There's a lot of people talking about network state in as a noun, as a phrase, sort of like Googling or Ubering or something like that.

David Weisburd (2:18)

What gets lost on a lot of people on network state is it's a little bit esoteric or a little bit in the clouds. Can you give us an example of a network state that you believe will be built in the future?

Balaji Srinivasan (2:29)

Well, I give you an example of something that's close to a network state that was built in the past, and that's Israel, in the sense of it was a group of people without a land that got a country. Now, of course, I recognize that Israel is quite controversial and so on today. But there's other precedents for the network state, like, for example, Singapore, startup country founded by Lee Kuan Yew. Obviously, America itself, maybe the original startup country. And actually, India, which got its independence nonviolently. So if you kind of add up those four precedents, where you have the Israeli concept of a diasporic group of people that then assembles on a piece of territory, the Singaporean concept of a charismatic CEO founder, the American concept of Bill of Rights and negative rights and all the amazing things that the founders of the US came up with, and then the Indian concept of independence through nonviolence, that starts to get at the concept of what I think of as The Network State, where in a sentence we've started new companies, we've started new currencies, can we start new cities or even countries? And that's a premise.

David Weisburd (3:38)

How do you start a country? Something like in Israel or Singapore was started historically?

Balaji Srinivasan (3:42)

Sure. So both of those are quite different, where Singapore got its independence involuntarily from Malaysia, whereas Israel was something which started with a book, and Der Judenstaat, which was Theodor Herzl's book, was something that inspired a lot of people, and they thought Zionism was crazy in the late 1800s. And he actually didn't just do a book, he also did a conference and he did a fund. And that conference is still going today, the World Zionist Congress, and he had a fund that actually today, the descendant of it, the Jewish National Fund, owns a big chunk of Israel. So he was actually, if you go back and read The Jewish State, Theodore Herzl was like a startup entrepreneur, right? He was like a tech founder. He talks about the death of distance due to the steamships that were carrying people abroad and so on and so forth. He reads in a very modern kind of way about, you know, here's a vision of what's possible, can I, you know, get the people and the capital to make it happen? I think that the amazing aspect of Israel going from a group of people to reviving an ancient language and building a land, there's something really interesting about that. I'll show you a visual of how the Network State might work. If you kind of understand this visual, you basically kind of get the whole thing. The whole Network State book is online at thenetworkstate.com, right? This is from the chapter title or the sub-chapter title, The Network State in One Image. Do you see that zoomed in version?