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Balaji is famous for lots of things. One that's less well-known, but imo one of his most visionary takes, is the idea of the network state which lays out a description of how the state may evolve -- or is evolving, right now. This has been discussed a few times on SN, here is one of the more recent times. To me, this is the natural successor to the Sovereign Individual for the modern age.
Balaji had a tweet the other day about how the internet is the next America that I thought was interesting. He talks about how the colonists thought about themselves as English for a long time, but then eventually "migrated out" of England, mentally. They stopped thinking of themselves as English when the foundation of their lives shifted to America. Now, according to Balaji, the foundation of people's lives is the internet, and he's riffing on what that implies.
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I've been noodling on a similar idea for a while. Specifically, imagining all the networks I'm part of simultaneously. Inhabiting so many identities at once strikes me as a particular modern experience. This is relevant to SN, too -- I've once again crept up to spending a pretty egregious amount of time here, talking to people, digging into ideas, arguing. It's mostly extremely affirming. I feel, in many cases, that these are real relationships; more real, in some ways, than those with people I'm close to geographically.
People talk about how the internet destroys distance. That's not really right, but it does introduce a new distance metric, or actually, it introduces multiple of them that simultaneously structure our lives.
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Anyway, I'm trying to figure out how far this can really go.
It's so easy to talk about online life as a pathology. I've done it myself recently. You can get apocalyptic about it. But I wonder: what does online life look like, in its best realization? Do you, dear reader, think you're anywhere close to that? I'm certainly not. I don't even try that hard -- I mostly get worse and worse until I go off the rails and my job suffers and my meatspace life suffers, and then I get ascetic and disappear for a while -- binge and purge, basically.
And then I do it all again, my own personal halving cycle. What a stupid way to live.
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The other relevant piece is what this means for btc. Balaji has some interesting stuff to say about the role cryptocurrency plays in the network state, which I won't pick up for now. Most of you will hate it, I expect, although I don't, because I think the default discussion is quite unsophisticated about money's role in social coordination, and how it operates on many levels simultaneously, as discussed above. Money has always been how a group organizes itself; and there are more overlapping groups now than ever. Thinking that money is nothing more than Metcalfe's law misses the point.
You don't have to agree, though. We can let the data tell the story. The truth will come out.
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But that aside, btc is its best self when operating entirely online. It's grounded in physical reality through mining, but other than that it's a construct of total abstraction, and every time we sully it by bringing it to earth we suffer for it -- KYC, government interference, privacy loss, all of it. The thought of the net being its own place, not just as a metaphor, but as an actual locus for the lion's share of human interaction, makes you wonder how btc projects into that reality. Digital money that instantiates scarcity, serving to intermediate transactions for abstract non-rivalrous goods.
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I increasingly think this is the way btc finds escape velocity. It's a pain in the ass to sell coffee for btc, especially if the state doesn't want you to, because ultimately that coffee grounds out in the physical world: you need to buy beans, electricity, you need to pay your rent. Each link in that supply chain is an attack surface.
But software, or membership, or attendance, or music, or art, or other aspects of digital culture, or other stuff with no or minimal marginal cost -- abstract money can chase abstract goods, and nobody can stop it. And given the increasing importance of abstract goods in the concrete economy, this seems very interesting. This seems like the road that will get us there.
This is the real circular economy. Or the spherical economy, rather; the hyper-spherical economy.
That's my suspicion, anyway.
this territory is moderated
Great post, as usual.
I'm with you in finding many of these social relationships more fulfilling than many of the ones I have out in meatspace: there's much more common ground, much more insight, a broader array of perspectives, etc. Some of these relationships even feel like genuine friendships. Hopefully they are.
I guess the big difference between the internet as a place vs a new colony is that our bodies are still located somewhere where some jerk or other claims to rule them and intends to exercise that claim. Otherwise, I like the framing that the internet is a real place and certain things are in it. Those things are not subject to the rulers of other places.
Surprisingly, I actually do feel like I spend a healthy amount of time here, despite it being a large amount. I have my priorities pretty well straightened out: family>leisure>work. Work is a means to the higher priorities, so if I'm hanging out here instead of working, no biggie. If my wife needs me to help out with something or my daughter wants to play, then I do that. Plus, I spend negligible time on any other internet activities at this point.
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90 sats \ 1 reply \ @davidw 2 Apr
Sounds very disciplined, if you ask me
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potato potato
(that saying doesn't work well in text, does it?)
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Surprisingly, I actually do feel like I spend a healthy amount of time here, despite it being a large amount. I have my priorities pretty well straightened out
It does sound like that. It seems like you've done what we all say we'll do (get your life to broadly reflect your priorities and values) but often don't. A thing I'm wrestling with, and starting to feel like I'm making progress on, is why some of the online stuff feels bad sometimes, even though it's no great sin, objectively, and even though subjectively I'm sometimes doing what I think I should be doing, respecting the priority classes.
I think it has something to do with the mental modes that you're operating in. We talk about switch costs in terms of deadweight loss vs productivity you could have had (well, nobody uses that language, but that's what it is) but there are other costs. I was talking with @k00b about that someplace around here; will do a proper post eventually. But there seems to be some damage you take from it. I think a Disciplined approach, as @davidw suggests, may be able to mitigate some of it, but haven't cracked it yet.
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326 sats \ 1 reply \ @Voldemort 8 Apr
It is an interesting concept, network state. My main question is how are property rights defined? Are people expected to relocate to new geographies to form these network states or are they entirely on the internet? I can't imagine any state system working without strong property rights as they are fundamental to free markets.
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The network state idea has it that they start on the internet, then migrate into meatspace in waves; in their meatspace incarnations they would have contract enforcement, including property rights, etc.
I should catch up on the state of this, the degree to which anything resembling the idea exists in the world. Not sure -- it would be primitive, if so. It's more a theoretical idea of how human organization at scale could be accomplished.
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Sounds ridiculous now but in my mind, I had never sufficiently distinguished between physical & digital markets for bitcoin merchant adoption before. I mean I had but only with specific products. I had just bundled both together as largely inevitable. But I think this is what we’re already seeing 👇
But software, or membership, or attendance, or music, or art, or other aspects of digital culture, or other stuff with no or minimal marginal cost -- abstract money can chase abstract goods, and nobody can stop it. And given the increasing importance of abstract goods in the concrete economy, this seems very interesting. This seems like the road that will get us there.
Imagine there’s already evidence to back that thesis, with VPNs, domains, hosting and any global online or AI service today able to and already starting to sell for bitcoin. And that’s because there is little friction online. Local transactions are full of friction however, with wallets, education, being online, KYC, taxes, robberies etc.
Like it or lump it too, long-term there’s only going to be more digital services to buy and sell. So if it takes a bigger percentage of that ever-expanding market, that could well be enough for hyperbitcoinisation. I also think we haven’t optimised our lives around the internet yet. We’re still stuck on 1st base - cat gifs.
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Imagine there’s already evidence to back that thesis, with VPNs, domains, hosting and any global online or AI service today able to and already starting to sell for bitcoin.
I think you're right, and I want to get my mind around the AI connection in particular, all the way. The logic I'm playing with goes something like:
  • AI is the ultimate proof-of-work system: PoW involved in the manufacture, but PoW in deployment, in the logistics and the energy cost.
  • If computational resources to run giant NVIDIA farms become the key to competitive advantage (or even equilibrium) in the future, then all the fiat tricks will be squeezed to the limit.
  • People will be placated, for a while, if you give them trinkets that you claim are free; but hard money chases out soft when consequences are high enough and timescales are short enough.
That last bullet seems different, to me. AI seems different. And especially, the world in response to AI, which among its virtues is also an infinite-bullshit-generator. Not being able to bullshit btc proof of work is the ultimate high stakes, anti-bullshit countervailing force.
Again, this feels like it really is something, but don't have the argument crystalline yet. Thoughts welcomed.
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Great post, I agree on so much & have been thinking about this a lot as well. Mainly thinking from the perspective of new social interactions being built on the internet or old ones being replatformed - memberships, tribes etc. What happens when every aspect of your life is tied to or provided through your affiliation with a digital-first network? (entertainment, education, work, shelter etc.)
I really like your take on Bitcoin being best positioned for digital commerce and how it suffers when brought to meatspace. An opportunity for innovation.
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[I] have been thinking about this a lot as well. Mainly thinking from the perspective of new social interactions being built on the internet or old ones being replatformed - memberships, tribes etc. What happens when every aspect of your life is tied to or provided through your affiliation with a digital-first network?
Anything at the forefront of your ruminations thus far? I'd be interested to hear any thoughts. It's surprisingly hard to imagine in detail.
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I think Youtubers and their Patreon communities are probably the closest thing I can see right now.
For just about any niche there is a youtuber(s) creating content and building a loyal community. I mainly see it in entertainment - "Come to my comedy show" or "Come to my tribe-exclusive album listening party" "buy and wear the merch" etc.
But I see this evolving into - Full fledged academies(think Saifedean online academy), members only Job boards(Bitcoiner Jobs?), and even members only housing(kind of like when people reserve a block of hotel rooms for an event to get a better price for guests, who's to say that can't be done for like a whole floor or building at an apartment complex and you have the option of living with other people in the tribe)
Over time it will just be normalized as the quality of the experience outcompetes the status quo.
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This makes a lot of sense to me, maybe Bitcoin is more effective for buying digital goods or with less or no production cost, great read, thanks!
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abstract money can chase abstract goods, and nobody can stop it
Thank you for putting this into words. SN is a great place to do it.
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Lol, congratulations, you made it to year 2013 of bitcoin
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Fucking noobs
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