Crypto States - Let's build our own nation
Crypto States - Let's build our own nation
Welcome to my crypto nation
Thursday, April 15, 2021
If the opposite of pro is con, is the opposite of progress, congress?
Try answering this question after reading today’s blog.
If you have been following this newsletter from the very first day, by now you might be familiar with my fantasies for dreams. In the very first edition of The Passion Pad, I told you about one of my coolest dreams - planning the architecture of a decentralized city on Mars while eating Kebab. Read it here, if you missed that post.
Since then I have been bombarded with a dozen questions by numerous people, some of them being -
1. What do you mean by a decentralized city?
2. Does this mean we won’t have governments?
3. How about the migration laws?
4. Who will govern the city?
So today, let’s talk about the possibilities of a crypto state.
Throughout history, powerful states - Spain, The Netherlands, France, Britain - have found themselves routinely replaced by more powerful empires. Today, there are speculation of United States ceding place to China as the global superpower. But what if we are asking the wrong question. What if there is a possibility of a more radical transition? What if all the states are in the process of transforming into a network state?
History shows that technology has replaced most of the existing systems. Consider a few examples -
Quantified Self v/s Licensing
Individuals will have the power to self diagnose themselves by measuring their glucose level & other chemicals by analysing the data using a software that combines the power and intellect of hundreds of doctors. Thus disrupting the Patient-Doctor relationship. Hence the medical license is becoming a software license.
GoPros vs Police Testimony
Bodycams mean that video evidence is now more trusted than the sworn words of an officer of the state. Thus trusting the computer and the network more than you are trusting the city.
3-D printing vs conventional weapons
It is impossible to stop the production of 3-D printed guns. Hence they cannot be regulated.
The Leviathan - What do people believe is the most powerful force in the world is shifting.
Earlier people used to say that don’t steal because God will punish you. Because for them God was the most powerful force in the world. Then later in 1990’s people were afraid of committing crimes because they were afraid that the laws and the government will punish them. In the 2000’s people will not steal because the Network won’t let them. Encryption will be the most powerful force. You will not have the access to private keys of someone else.
Technological development creates new sources of power, and it’s possible to discern a logic to that growth. First, information: Google knows more about you than your government ever will. Second, community: Facebook brings more people together on a single collective platform than any society, including China or India, can match. Third, currency: Bitcoin is a new kind of money, decentralized and free from political control. Fourth, law: smart contracts are computer programs working without human intervention. All that remains is to combine these elements, and a new form of governance will be born. What might it look like?
In an essay published by Mark Zuckerberg in 2017, Mark says. - “Facebook stands for bringing us closer together and building a global community, In times like these, the most important thing we at Facebook can do is develop the social infrastructure to give people the power to build a global community that works for all of us.“ Of course, Facebook, with no territory and no claims to territory, is dedicated to building a global community not in physical but in virtual space. Starting a new city would require a lot of land, but starting a cloud city would be much easier. There is an infinite amount of land on the internet.
“In the same way that social media turned a lot of people in publishers, I think that VR is going to turn a lot of people into architects” – Balaji Srinivasan
Laws are a function of longitudes and latitudes. As you change the (x, y) coordinates, the laws change. In the physical world, you live in a world, where your neighbours do not think the same way and do not have the same beliefs as you have. The virtual state will have people with same beliefs. By freeing itself from geographical constraints, the new community would be open to every person on the planet.
Facebook however lives a double life. On the one hand, it says that it wants to enable a virtual community of global citizens. On the other, it is a company incorporated under the national law of already-existing nation-states. In this second aspect, it is subject both to the rules of market competition and to public regulations. Neither is compatible with the global political role to which Facebook aspires.
Cryptocurrencies—and crypto platforms more generally—offer an answer to this difficulty. Already, with Bitcoin, we have seen the advent of a new global infrastructure, where data and transactions can be endlessly recorded in a trusted blockchain ledger, without any of the usual intermediaries: no large multinational corporation captures the data, no banks are involved, and no state authority can tamper with the record. Disputes within the community are automatically settled by the existing ledger, which takes on the role of paramount authority.
Offline, we rely on public authorities to confirm to others that we are who we say we are. Marital status, property, age, taxes, health and school records, contact information—state authorities zealously keep all these records, and, normally, a society will work better if citizens can trust those authorities to fulfill that task. But online, the scale of information explodes. The vast volume of data collected online now bears no comparison with the primitive records available in the physical world. Thus, identity changes online. Human beings are transformed into streams of data, which can be recorded, analysed, and assessed in real time.
What Facebook did was “Surveillance capitalism“ - we serving the purpose of maximising profits for Facebook and their advertisers by selling them our data without our will. This was the reason, Facebook’s digital currency Libra destined to fail. No sooner was it announced than congressional hearings started, and the chairwoman of the Committee on Financial Services called on Facebook to halt its development. Unlike Bitcoin, Libra is centrally controlled by a particular firm, and thus an easy regulatory target.
An alternative is conceivable: each individual would own their digital identity, which different services could use according to their current interests and choices, instead of that identity being recorded and updated by large Internet platforms and then sold to advertisers without consulting the people to whom these online selves ultimately belong. With a distributed database of the kind first introduced by Bitcoin, something truly remarkable became possible for the first time: a community coming together with no other authority than the database that records its members’ collective lives. The ultimate promise of crypto lies less with digital currencies than with the replacement of other state structures. Smart contracts further extend the use of blockchain from monetary usage. Think of smart contracts as a vending machine. Without an owner, it enforces a contract to sell a beverage at the advertised price to the user. Anyone who puts in the sufficient coins gets the beverage.
“ A new business model for building a city: Instead of owning specific pieces of land, you own equity in the entire city. This way, you have equity alignment with everyone else in the city. The internet is the next Silicon Valley” – Balaji Srinivasan
It’s fascinating to see that the Mobile is making us more mobile. Network is slowly and gradually taking over from the state. Gear up to witness the sequel to Democracy.
What should you do?
One should first become financially independent and How do we achieve it?
2005:
1. Go to Silicon valley
2. Found a company
3. Raise VC
2021:
1. Don't go to Silicon valley
2. Don't found a company
3. Don't raise VC
Instead
1. Get a remote job. (don’t take the promotion, otherwise you become the hub)
2. Move somewhere cheaper (where the taxes are less).
3. Save money
And you get your financial independence.
FINANCIAL INDEPENDENCE IS PERSONAL FREEDOM.
However the aspiration to start a new decentralized city are far more tougher than envisioning it. Let’s leave the subtle problems for the next blog, otherwise it will turn out to be an OHT.
Have a great day ahead.
Cheers!
Some things that you may find interesting-
Article I am reading: A Closer Look at the Environmental Impact of Bitcoin Mining by Christopher Bendiksen
Thought I am pondering upon: We are a generation of clowns - loves sleeping but can't sleep on time.
Song I am listening to: At my worst by Pink Sweat$
Quote I am enjoying: “Media corporations are not the free press, you’re the free press. Right as a citizen, you’re the person who’s supposed to hold everyone accountable.”
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