Cryptocountries

This post builds on Balaji Srinivasan’s How to Start a New Country essay.

The first country with one billion citizens will be a cryptocountry.

• Whether they’re called crypto cities, network states, or something else, these virtual nations will form and live natively online.
• Winning cryptocountries will incorporate the best aspects of physical countries, and many will form hybrids that include both physical and digital homelands.

Cryptocountries are bigger than cryptocurrencies.

• Cryptocountries will have their own currencies, laws, contracts, and citizenship requirements.
  • Most cryptocountries will start without any physical property and will have legal statuses closer to cooperatives vs. a corporation or a country.

We currently have an inverted view of cryptocurrencies vs. cryptocountries:

• Currencies should serve their countries, not vice versa.
  • Example: $USD is made and controlled by the US Government.
• Most blockchain projects view crypto governance as a tangential part of cryptocurrencies.
  • Governance should be front and center.
    • Cryptoeconomics should serve the needs of the cryptocountry’s goals and mission.

Cryptocountries are the endgame of decentralized power: From Polis to Polity to Politics.

Here is my breakdown of the path to cryptocountries:

	Before Internet	Cloud Communities	Startup Cities	Network Unions	Cloud Countries	Network States	Crypto Countries
Community (Polis)	C	D	D	D	D	D	D
Vocation	C	C	D	D	D	D	D
Money	C	C	C	D	D	D	D
Rules (Polity)	C	C	C	C	D	D	D
Land	C	C	C	C	C	D	D
Laws (Politics)	C	C	C	C	C	C	D

Antecedents to cryptocountries (previously defined by Balaji Srinivasan) include:

1. Cloud Communities: Large groups of people organized online around specific ideas.
2. Startup Cities: Add freedom to live and work anywhere.
3. Network Unions: Add cryptocurrencies and crowd action.
4. Cloud Countries: Add cloud citizenship and crypto governance.
   • Current examples include Decentraland and Eden.
5. Network States: Add networked enclaves of physical land owned by citizens.

Cryptocountries add geographical control, political independence, and diplomatic recognition.

• The last step after Network States is to control our own laws and politics.
  • True liberty requires freedom from political and legal oppression.
  • This will require sufficient real-world power to attract recognition from and alliances with major existing countries.
• Initial attempts to convert Cloud Countries and Network States will be obviously met with opposition from world powers.
  • But crowd action coupled with cryptocurrencies will limit the control of leviathans and shift the balance of power to organized individuals.

There are two key paths to creating a cryptocountry:

• Bottom-Up: Mass migration by cloud citizens into politically-unified physical territories would give cryptocountries all of the features of existing countries, including diplomatic recognition, plus all the benefits of cryptographic systems.
• Top-Down: Existing countries like Estonia could also take a top-down path to becoming a cryptocountry by converting their physical citizenship, legal, and political systems into cryptographic protocols.

There will be a Cambrian explosion of new cryptocountries by 2050.

• Countries and companies used to rise and fall over centuries.
  • Now they rise and fall in decades.
  • Soon they will rise and fall in years or less.
• We need a new game like Spore that simulates this rapid expansion, competition, and evolution.

Thanedar’s Game is my idea for an MMO Game simulating the creation of and competition between cryptocountries.

• This game allows people to quickly test many different political and economic strategies virtually as preparation for creating ideal cryptocountries.
  • Like Battle School and Command School in Ender’s Game, increasingly complex versions of this game can also be used as training simulators for prospective cryptocountry leaders.

Cryptocountries allow many new political, fiscal, and monetary policies to compete rapidly.

• Example: Imagine MMTLand, created based on Modern Monetary Policy:
  • MMTLand would have its own cryptocurrency ($MMT).
    • $MMT is minted continuously based on need.
      • No taxes. Just mint more $MMT.
  • MMTLand mints $MMT to pay UBI to all of its citizens.
    • Open immigration policy + UBI incentivizes early citizenship growth.
  • MMTLand mints $MMT to buy healthcare, education, and other services for its citizens.
    • MMTLand would initially pay a premium in $MMT relative to $USD value to compensate early providers for new currency risk.
    • This premium would decrease as $MMT gains value and acceptance.
  • Early citizens and service providers have significant upside potential if MMTLand is successful and $MMT appreciates.
• Someone else should create a libertarian cryptocountry (of course called Galt’s Gulch):
  • These and other cryptocurrencies can compete to see who becomes more successful.

Different economic and political strategies can all work:

• The key is matching the monetary and governance policies to the community’s goals and vision.
  • BTC has programmatically-defined governance and is successful.
  • ETH has people-dependent governance and is also successful.

The first citizens will join based on the visions and missions of each cryptocountry and their founders.

• People will also be incentivized to become early citizens of cryptocountries to share in more of the upside potential of these countries’ cryptocurrencies.

Since it’ll be easy to change/add new cryptocountry citizenships, people will quickly move to the most successful cryptocountries.

At first, cloud citizens will be able to keep their physical citizenships, but certain countries (e.g. USA & China) may ban their citizens from holding cloud or cryptocountry citizenships.

Other existing countries (e.g. Estonia) may aggressively lean into cloud citizenship and create a hybrid physical/cloud model, turning itself into a cryptocountry.

Cryptocountries are on my list of solutions to the World’s Biggest Problems.

• Cryptocountries feel like part of a distant future.
  • But in many ways, “the future is already here, it’s not not very evenly distributed.”
    • Cloud Countries like Decentraland and Eden are already forming.
• How would you design your ideal cryptocountry?

I’d love your feedback on this post. Tweet at me @neilthanedar and let’s start a conversation!

• Prompt: If you were creating your own cryptocountry, how would you design its constitution?