How to Opt-In to the Network State: The Coming of Parallel Governance

How to Opt-In to the Network State: The Coming of Parallel Governance

Many claim that democracy, upheld by territorial nation-states, is the height of civilisation; they believe it is effective and inscrutable. They say there is no better way to organise society, and they rapaciously defend that claim. They see the First World as a bastion of liberty, peace, and reason.

A simple Google search yielded an article by the Carnegie Council titled 'Why Democracy is the Best We’ve Got,’ validating the point above. Reading Steven Pinker’s book ‘Better Angels of Our Nature,’ one would also conclude that violence, immorality, and corruption have declined thanks to Western values—due to the Enlightenment and the birth of modern governments.  

However, this position is juxtaposed with vast governance inefficiencies and rising human rights violations. Across the world, wars have multiplied, along with rampant money printing, corruption, and bureaucratic logjams that thwart progress. The citizens are becoming disillusioned with the state of affairs, and approval ratings for world leaders have plummeted.

Solutions are on the horizon as humanity verges on another paradigm shift in governance. In response to growing concerns about the status quo, technologists envision a more efficient form of governance, called a 'network state,' which people opt into based on their values and preferences.

Let us unpack the network state, explore why it enables parallel governance, and learn how to opt in. First, we must learn what it means to exit.

Learning to Exit: What is a Network State?

Balaji Srinivasan originally coined the term 'Network State' in the book of the same name, but the idea was first distilled in its purest form in the early 1990s. Cypherpunk writer Timothy May discussed it in his article 'Libertaria in Cyberspace.' The purpose of the concept for both writers is similar. The goal is to 'exit' or leave nation-states through an internet network, which means joining online or cyber communities with governance rules and structures.

Srinivasan defined his vision succinctly: 'A network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.'

May described his view of network states, saying, 'This is the most compelling advantage of 'Crypto Libertaria': an arbitrarily large number of separate 'nations' can simultaneously exist. This allows for rapid experimentation, self-selection, and evolution. If folks get tired of some virtual community, they can leave.'

To be clear, there are nuances about how proponents define the ‘network state,' but the overarching goal is for its governance capabilities to improve human organisations in cyberspace and on the land. For instance, Srinivasan said that the primary aim of network states is to seek diplomatic recognition. Still, others see network states as entities that simply exist in parallel or outside the scope of the nation-state without needing to be officially recognised by other states.

Regardless of the nuances, we note that most network state ideas share three characteristics:

  1. Governance services: They provide governance services, processes, and procedures that the nation-state offers, including consensus, voting, electing representatives, and treasury management. Typically, a governance token minted by the network state will enable and support these functions.
  2. Right to exit: People can easily opt-in or out of network states as they see fit. They are not compulsory, and they have the right to exit. People may join network states that share their values and beliefs and leave at will if desired. There is a near-zero exit cost.
  3. Parallel existence: These network states are not necessarily intended to supplant or abolish the nation-state. They only aim to improve governance and offer alternative services similar to Bitcoin or other cryptocurrencies, which compete with the dollar and other currencies. We will repeatedly return to this idea of 'parallel existence,' as it is a chief benefit of the network state.

The features above act as ideological and technological scaffolding for the network state. The Logos organisation also defines a network state — or self-sovereign virtual territory — with these features in mind: It is an online collective that comes together voluntarily, shares values, promotes strong encryption and forms a compact with rules for individual behaviour.

However, it should be emphasised that 'network states' as a concept is evolving, and the reality is that these internet-based governance communities may start as credibly neutral and then arborise into various politically motivated units. The future of these ‘politically motivated units’ begs the question: since the nation-state has a monopoly on its services, is a 'network state' even possible?

Parallel Governance: Can the Network State Exist?


People unfamiliar with history may not realise that our species has invented many forms of governance and government. Democracy enforced by the nation-state is not the only form of governance.  

The ancient Greeks used a city-state model; instead of having absolute power over the entire geography of Greece, each city managed its governmental functions. The cities had their own culture, customs, and mores — they were all unique and existed in parallel. Athens was considered a philosophical and scholarly city, while Sparta was warlike and valued strong men. These 'city-states' were called 'polis.' The polis in Athens was a petri dish of governance exploration where drama, philosophy, science, and democracy were born. In contrast, Sparta maintained one of the period's finest, most feared and respected militaries.

The city-state model was imperfect, as it was developed in antiquity when slavery was fashionable, and living conditions were unpredictable and tumultuous. Still, due to their open-mindedness, the Greeks provided fertile soil for essentially 'inventing' the Western mind and its ethos, as Bruno Snell highlighted in his fantastic book, 'The Discovery of the Mind.' The Greeks thus introduced the idea of more localised, decentralised, and parallelised governance, albeit an early incarnation.

Velvet Revolution

Another looming question is whether a revolution of network states can exist peacefully alongside the current social order. Most argue that nation-states would not allow network states to exist. That is likely true, but what the politicians want may not matter, depending on the socio-cultural climate. In other words, if people want change, they will pursue it.

For example, in the late 1980s, Czechoslovakia experienced a peaceful cultural shift and power transition called the Velvet or Gentle Revolution. During this revolution, activist Václav Benda wrote about what he called the 'second society' or 'parallel polis.' These parallel polis were communities with differing values that would exist alongside the Czech State. They would include groups that contradicted the government’s influence on society and cultivated unique cultures that held and shared values anathema to the communist party.

To spread ideas about the parallel polis and engage in dissent, the revolutionaries leveraged Samizdat, a kind of dissident activity that involved reproducing previously censored material and passing it to others by hand. Through this 'parallel polis'-inspired activism and other efforts, the government peacefully relinquished power in 1989, allowing the idea of parallelism to contribute to lasting social change.

A Modern Polis

Although the ancient Greeks and the Czech activists represent wildly different examples on the surface, the central idea of the ‘polis’ and ‘parallel polis’ unites them. They demonstrate that societies can organise without a nation-state overseeing the populace with a centralised planner. They also demonstrate that if states devolve into authoritarianism, people can 'exit' those structures and create more robust, decentralised, or parallel networks. This idea holds even if the parallel communities reside within the authoritarian regime, as suggested by the Velvet Revolution.

Therefore, the network state is the modern polis. Its mission is to exist alongside the current social order as a form of activism or exit. Each network state's ultimate aim or goal will be unique to its particular community, though. One network may be more interested in something other than strict politics, but another may be interested in forming a community around a controversial or uncommon ideal.

Now, we will turn to how the network state will materialise and how we can opt in.

Opting-In: What will Joining a Network State Look Like?

The first iteration of a network state can be seen as blockchain networks and decentralised autonomous organisations (DAOs). These networks based on blockchain use consensus mechanisms to allow people to vote on proposals, enact changes or upgrades, and actively participate in the network. In this sense, alternative governance already exists. Anyone can opt into a network, leverage a token, and vote on proposals. For example, bitcoin is a governance mechanism and currency that exists parallel to the state in a hostile and adversarial environment.

The difference between the aforementioned type of organisation and a network state is that a network state is intended to provide or offer governance services that mimic nation-state 'services.' In other words, the network state provides a broader scope of services, not only a token, currency, or economic purpose. A key feature is that this competing governance service will provide more quality offerings based on citizen demand rather than edicts from a central authority. The modus operandi is to create an ecosystem of 'unbundled governance,' where different actors offer solutions on the open market.

Unbundling the State

This open governance market comes to fruition through what Trent MacDonald called 'Unbundling the State.' Similarly, cypherpunk Jerry Everard called it the 'disaggregation of state services.' MacDonald, in his 2013 article, expressed the idea keenly:

'Consider the possibility of unbundled governance, where collective goods and services are provided separately by independent single-purpose governments or public enterprises that are functionally-specialised. This is ‘government a la carte’: there will be greater diversity of governmental forms and a wider range of choice for groups and individuals.'

MacDonald was clued in about network states before the term became passé. His idea of creating 'à la carte' governance services is what the network state seeks to implement because the network states would form around a specific value set or group identity. Aside from blockchain tech, internet communities and groups are also precursors to this dramatic change in how we organise as humans. Once the technology infrastructure is complete, there will be no stopping the myriad ways governance will emerge and alter the social fabric.

Again, the key takeaway is that these unbundled, network-state services exist in parallel; people can voluntarily opt into them, and they will fail if they do not please their customer-citizens.

So, what’s next for the network state? How far along is the technology?

Network State Infra and Privacy Thesis

Much talk has been occurring about network states, and conferences have even been held about their use and utility. However, much of the activity around network states is isolated to special economic zones, smart cities, and similar geographical spaces. However, we want to be clear that network states will first function in cyberspace with a shared community operating with strong encryption safeguards.

The reality is that most DAOs, as mentioned earlier, need to prepare to operate as network states due to inherent weaknesses in encryption and privacy features. For a network state to exist alongside the nation-state paradigm, it must be resilient and deter bad actors with its strong privacy guarantees. Otherwise, the network state cannot exist for political and social reasons. It would be undermined by anyone who does not wish to tolerate its existence. In this regard, the network state must be impervious to hostile forces. It must be antifragile.

Furthermore, there has to be infrastructure that defends and protects the network state. In the Web2 ecosystem, almost all aspects of the Internet are controlled by central entities and big tech regimes. Without proper decentralisation, the network state would also have a central point of failure. As a politically charged idea, it simply cannot flourish with the present infrastructure.

A few organisations working on this infrastructure include Nomos, Codex, Waku, Darkfi, Galactica, Urbit, and others. Of course, what these organisations are building not only presupposes a future of network states but also a more decentralised, peer-to-peer internet and a freer world.

The Nomos project focuses on developing a credibly neutral platform that uses 'zones' as the application layer for engineers to develop their version of the 'network state' or 'autonomous political formations.' It may also be possible for non-engineers and laypeople to develop their governance models using templates and interfaces, allowing everyday people to push a governance instance as easily as they could mint an NFT on a blockchain.

The Nomos architecture will be ‘modularised’ throughout to allow the zones to be independent and mutually connected to the others, creating a digital city-state model within the zones. These applications will fully realise Timothy May’s vision of Libertaria in Cyberspace. The Nomos organisation is entirely neutral concerning the types of political formations that emerge, creating an environment of governance experimentation.

Conclusion: Experimentation Wellspring

While it is true we cannot technically opt into a fully-fledged and formed network state at the moment, opting into one is not a pipedream or a distant hope. Instead, it is an impending reality, and it has to be; we exist in a period of unparalleled turbulence. As a species, we are dealing with social, ecological, and potentially catastrophic events, per what philosopher Daniel Schmachtenberger has called a 'metacrisis.'

Arguably, many of the world’s most problematic crises result from antiquated governance, no governance, or sluggish, stilted bureaucracy. In this case, the world appears to be undergoing a singular crisis of governance, for which we believe the only solution is to exit and exist in parallel with the current social order. At the very least, this will provide us with the necessary toolkit to enact change more flexibly, efficiently, and with principle — in the hope of preserving our humanity in the process.

In the final analysis, Nomos and other organisations are helping to create a digital ecosystem of competing, interacting, and interoperable governance applications. As Trent MacDonald said, this is the beginning of a wellspring in governance experimentation, catalysing a more competitive and friendly market for functionally specialised governance offerings.

To opt into Nomos, join: