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Technology vs. the nation-state

Presented by Connected Commerce Council: How the next wave of technology is upending the global economy and its power structures
Jul 21, 2022 View in browser
 
POLITICO's Digital Future Daily newsletter logo

By Ben Schreckinger

Presented by Connected Commerce Council


With help from Derek Robertson

Balaji Srinivasan speaks onstage during TechCrunch Disrupt SF 2017 at Pier 48 on September 20, 2017 in San Francisco, California.

Balaji Srinivasan speaks onstage during TechCrunch Disrupt SF 2017 at Pier 48 on September 20, 2017 in San Francisco, California. | Photo by Steve Jennings/Getty Images for TechCrunch, via Flickr

In the world of crypto and Web3, manifestos are the new pitch decks, and a former Coinbase executive has just dropped the mother of all techno-political manifestos.

The new politics of technology often come down to tech innovators challenging national systems of oversight built for a different era, or seeking to transcend those national systems altogether.

" The Network State " by Balaji Srinivasan, released online in draft form earlier this month, offers insights into one version of Team Tech's endgame in these conflicts: gradual replacement of the nation-state with internet-enabled "network states" that begin in the cloud and then start butting into the real world.

The book-length text (which describes itself as "a toolbox, not a manifesto") reads in places like a satire of Silicon Valley utopianism: "We can apply all the techniques of startup companies to startup societies," it advises, "Financing, attracting subscribers, calculating churn, doing customer support — there's a playbook for all of that. It's just Society-as-a-Service, the new SaaS."

But the impetus behind the text is real. The rapid adoption of new technologies, especially the Internet, is shaking up societies and testing the nation-state system.

After all, that system crystallized in 1648's Treaty of Westphalia as a resolution to the 30 Years' War, which was largely a consequence of the Reformation, whose roots in turns have often been traced to the invention of the printing press. That the advent of the Internet could set off a similar evolution in governance systems does not seem so far-fetched.

And, clearly, there is an appetite in some quarters for experimentation. Late last year, a decentralized autonomous organization, or DAO — a new sort of online organization that uses blockchains for governance — purchased 40 acres of land in Wyoming to advance its goal of building a blockchain-governed city (although hackers later made off with much of its remaining money).

A few months later, one online directory lists more than a dozen DAOs that have purchased land — including a "a crypto co-operative working to build a village in the heart of Texas Hill Country" — and dozens more that intend to do so.

Srinivasan's vision for the future is more ambitious. In it, people build online social networks around a shared social vision (like life extension, or greater income equality), and eventually group together in pockets of physical land in the real world, forming internet-linked archipelagos. They also use cryptocurrency, keep records with blockchains, stake out their own slices of the Metaverse, and eventually win diplomatic recognition from existing nation-states.

This vision culminates in what Srinivasan, a vocal critic of both American and Chinese political elites, calls a "recentralized center." In other words, network states come together and take over the world.

Whether or not Srinivasan has found the recipe for the future of human governance, he at least is on the forefront of books. He is publishing the text first as a website with dedicated hyperlinks for each section. Srinivasan writes that he intends to periodically update the online version of the book before publishing a " director's cut " in hardcover. "Think of this," he writes, "as a dynamic bookapp."

Publishers, and presidents, take note.

A message from Connected Commerce Council:

Small businesses face big consequences from overregulating tech. By breaking up integrated services, it gets harder and more expensive for smaller shops to reach customers. That's why 87% of small businesses are concerned that antitrust legislation is going to make digital tools more expensive and less useful. Say yes to supporting small business success. Vote NO on the American Innovation and Choice Online Act (S.2992).

 
cards on the (s)table

Bloomberg reported yesterday that the House Financial Services Committee is planning to advance a bill to regulate stablecoins as soon as next week, amid growing concern about their ties to the traditional financial system.

A bipartisan group including Maxine Waters (D- Calif.) and Patrick McHenry (R-N.C.) has worked on the bill that would reportedly mandate that issuers maintain reserves equal to 100 percent of all deposits in "highly liquid assets, such as cash or short-term government debt," according to the Washington Post , and would also ban the lending of stablecoins, among other provisions.

The legislative maneuver follows recent remarks from Treasury Secretary Janet Yellen that encouraged legislators to get in on the regulatory action, following calls from the Treasury and a White House working group for stablecoins to be brought under the traditional banking industry's regulatory umbrella. (A group of executive agencies released a report late last year that called for nterim measures to regulate stablecoins including potentially using the Glass-Steagall Act in addition to new legislation.) — Derek Robertson

afternoon snack

LONDONDERRY, NORTHERN IRELAND - OCTOBER 10: A digital version of the character 'Sal' sits in the virtual Minecraft world created by the backstage digital team during a 'Playcraft' live rehearsal at The Playhouse Theatre and Arts Centre on October 10, 2017 in Londonderry, Northern Ireland. 'Playcraft' features the worlds first live performance of a play featuring projections of Minecraft video game virtual sets which include Brooklyn Bridge, Times Square and Neolithic landscapes. At 7pm GMT on Saturday 14 October the new play   will become the world's first to be performed live on stage and inside the Minecraft video game. (Photo by Charles McQuillan/Getty Images)

A digital version of the character 'Sal' sits in the virtual Minecraft world created by the backstage digital team during a 'Playcraft' live rehearsal at The Playhouse Theatre and Arts Centre. | Charles McQuillan/Getty Images

Sometimes, two great tastes don't taste great together : The staff behind Minecraft, Microsoft's massively popular metaverse-like online game, announced yesterday that it intends to keep NFTs — and the blockchain itself — entirely off its platform.

In a surprisingly pointed statement, the authors write that many popular gaming applications of NFTs create " digital ownership based on scarcity and exclusion, which does not align with Minecraft values of creative inclusion and playing together," and that NFTs are "not inclusive of all our community and create a scenario of the haves and the have-nots."

It's perhaps not surprising that the Minecraft team would take such a stance: NFTs are generally massively unpopular in video gaming communities, which for many years have contended with game companies attempting to charge players for things within a game, even after they've bought it.

But the decision is somewhat counterintuitive, at least to metaverse proponents who think the space pairs naturally with the "digital property rights" that the blockchain, NFTs, and other Web3 technologies represent. For now if you want to create some kind of digital value within Minecraft's particular metaverse-like world, you'll have to build it yourself like everyone, and everything, else. — Derek Robertson

 

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the future in 5 links

Stay in touch with the whole team: Ben Schreckinger ( bschreckinger@politico.com ); Derek Robertson ( drobertson@politico.com ); Konstantin Kakaes ( kkakaes@politico.com );  and Heidi Vogt ( hvogt@politico.com ). Follow us on Twitter @DigitalFuture .

Ben Schreckinger covers tech, finance and politics for POLITICO; he is an investor in cryptocurrency.

If you've had this newsletter forwarded to you, you can sign up here . And read our mission statement here .

A message from Connected Commerce Council:

Small businesses run on tech. Integrated digital tools help Frank DiCarlantonio at Scaffidi's Restaurant reach customers, scale up, and compete. In fact, 75% of small business leaders say digital tools are important to their operations. But Congress is aiming to break up the digital tools and services that small businesses rely on—making them more expensive and harder to access. It could be the difference between success and closing their doors for good. Don't forget about small businesses. Vote NO on the American Innovation and Choice Online Act (S.2992).

 
 

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