I've heard of it, but haven't read it. I know the one-sentence summary Balaji gives:

Without reading too much further into the book, I feel bearish on the idea. Statehood is not achieved through diplomacy, but through military. Military gives security, and through security comes diplomatic recognition. Palestine wants to have state recognition, but Israel simply has far more military force to back it up. Even living as a network state, Palestinians would not have freedom to live and prosper because of the overwhelming military might of NATO and Israel. The network state wouldn't solve their problem of statehood because they literally need a military to push back against the other conquering military force.

It sounds a nice Silicon Valley vision for what a state could be, but without a vision for how this state achieves military power to secure its territory and defend against adversaries, I don't see how it could succeed or be differentiated from a normal state.

No nation state would willingly to sacrifice their own territory, resources, or people through a diplomatic process. The elite who run the state are akin to the farmer that runs the farm. There is no farm without a farmer; there is no state without an elite. And the way the elite run their state is through a reliance and monopoly on violent force through the police and military.

Imagine if a few influential individuals came together to fund the creation of such a network state. They managed to find some remote Pacific islands that some oligarch was willing to sell, and they set up their network state with the territory they purchased. Let's say they accidentally stumbled upon some real and valuable natural resources, and were able to utilize the labor of their citizens to convert those raw materials into exports to trade with other nations. What is stopping the United States, Russia, China, or any other state with a modicum of military force from acquiring those territories and those peoples for their own gain? Even having an army doesn't stop the United States from waging their resource wars on less powerful nation states. Without a military, that state has no security.

I know many Bitcoiners are anti-state, anarcho-capitalist, anarcho-syndicalist, etc. However, due to the relationship between the military and state, I don't see how it would be possible to operate a state without a military. The network state feels reminiscent of securing jepgs on the blockchain. A nation of people need a real military force to secure their livelihood from adversaries—it can't just be online.

Very true. The cypherpunks and Bitcoin maxis have laid down the ideological groundwork perfectly for the next era of development. Now it's just up to us to go and build such institutions. We already see the Paxful sponsored Bitcoin Ekasi—a Bitcoin-first education center and community hub in a South African township. It's just the beginning for such institutions, and I hope to see more in the next few years.