Network states are online communities that have collective agency (governance of some kind) that eventually try to materialize on land in the physical world. A DAO, could potentially become a network state but it could also in theory emerge from a subreddit or some other online community organized around a specific thing.

Balaji has a particular vision for these network states that sees cryptocurrency as being an integral part of them. It also presupposes that these network states need to have a moral imperative to be long lasting (I.e a strong purpose like a religious community, being against the FDA, dietary etc)

An important point to note is that a network state is not inherently a “right wing” or libertarian idea. In fact Vitalik references another more left leaning author, David de Ugarte, who explores similar ideas from a different perspective in his book Phyles: Economic Democracy in the Twenty First Century.

It’s entirely possible to disagree with many of Balaji’s previous positions and see this as a useful playbook for implementing a network state that aligns with your world views.

A large part of his book seems to be laying out a justification for this vision as well as it’s theoretical underpinnings. I.e why this needs to exist and why this would be better than say moving to an existing city state etc.

Apart from that it’s basically a playbook for how a community could in theory go from lose collection of individuals on discords to a mini city with its own regulations and laws.

Vitalik is sympathetic to much of the book but calls out 4 main issues he has with it:

1)The "founder" thing - why do network states need a recognized founder to be so central?

2)What if network states end up only serving the wealthy?

3)"Exit" alone is not sufficient to stabilize global politics. So if exit is everyone's first choice, what happens?

4)What about global negative externalities more generally?

Of these critiques the ones that resonated with me so far are 2 and 4. I’m only about 25% through his book. In terms of 4, I think this exists today with nation states and hence I think it’s a little unfair to expect this to be addressed in this book.

In terms of 2. I think this book is written for middle class and wealthy people who can easily move cities and or countries. I.e software engineers and scientists.

A big question for me is, assuming network states are a thing that happen and are wide spread. What happens to all the displaced unskilled or semi skilled global poor? What will their likely relationships be with these new network states?

How do millions of people displaced by wars like in Syria or the Ukraine fit into or impact this network state model? People who are forced to exit as opposed to having the luxury of choosing to exit. This seems like a bit of a blind spot if even from just a network state game theory perspective.

In general I’m enjoying this book so far and would recommend people read it if they are interested in subjects like charter cities or DAOs.

I treat it as a thought provoking work that’s not mean spirited in tone like the sovereign individual.

Within my lifetime I expect to see people try and create new charter cities bootstrapped from online communities. I think this book offers a lot of useful advice on how to think about forming these communities.