The future of states

The future of states

A review on 1729's "How to Start a New Country"

Why a review of an article on building states on the cloud is relevant to a publication focused on AI-generated/assisted reports on geopolitical issues? Because it's a part of the future of geopolitics.

As BTC and other blockchain-based projects went from isolated, hobby experiments in economics and game theory to first-class assets, affecting how capital controls and flows are managed by governments, cloud-first states, decentralized communities will move from a group chat in Telegram, taking maybe 1 Gb space in shared files and messages, to hybrid cloud-real world networks encompassing libraries of knowledge aggregated by its members, their interactions and discussions, a network of meta-skills made by connecting it's members skills and the products of those combinations, a system of trust based on the aggregation of 1000's of interactions across members, eventually a monetary network built on an exchange system of help, jobs, deals, new companies formed, shared projects.

1. On the motivations for Neo States

We want to be able to peacefully start a new country for the same reason we want a bare plot of earth, a blank sheet of paper, an empty text buffer, a fresh startup, or a clean slate. Because we want to build something new without historical constraint.

A basic necessity to add to this goal is the desire for security. Wealth today doesn't guarantee enough freedom from the unintended consequences/negligence/malevolence from state actors. We know it too well from watching 2020 unfold. Unless you are a very high net worth individual, you cannot select your environment to the degree where you are safe from government excesses, be it educational indoctrination of your children (what is effectively a malware attack on your offspring) or restriction of basic human rights (i.e. constant lockdowns). Apart from the very wealthy, only those living in rural communities or homesteading are free, but yet remain beholden to some degree to supply chain issues derived from our globally over-optimized system. Almost full autarky can be achieved in these cases, and yet government holds the monopoly of force and can use it for confiscation if necessary. Here is where de-facto, full political autonomy becomes necessary.  

2. Starting a new country

An 8th method, or perhaps a different pathway for the 7th is possible. Physical, independent cities like charter cities, free economic zones, newly incorporated towns could form alliances, like the ancient League of Corinth:

League of Corinth - Wikipedia

In this case, the League of Corinth fulfills the last, but at the same time most basic necessity of a State or aggregation of states: physical security. The league was formed by proportional military contribution by each of its members. While in the past all wealth was physical, either in food supplies, land, gold, military equipment, today a future nation or league of nations could have its monetary wealth in a cryptographic heaven (BTC), but it's still made of humans, which need guaranteed access to physical supplies as water, food, land, raw materials... all this implies needing a logistics supply system in place, as even though certain communities or cities could reach a degree of autarchy, specialization in products will remain, which requires the support of trade routes. Adding to that is the need for the maintenance of semi-permeable boundaries between communities and between potentially antagonistic states/ leagues (a diplomatic word for borders, which need a certain degree of passive + active enforcement)

Cloud country gamification

An advantage of the cloud-first state is that technology can be used to prototype, test, and iterate on subjects as incentive systems, collaboration protocols, defense strategy, and technologies. Agent-based simulations can be built to test specific scenarios, or fast-forward several 1000s of iterations after introducing new laws, agents, new incentives to observe emergent phenomena that we could not predict otherwise (agent based simulations being just a very rough approximation, as we cannot model with fidelity any human individual, thus missing emergent decisions, behaviors or links that can tip the whole simulation). Strategies and protocols could be proposed and tested by historians, developers, or any participant of the cloud community in a future no-code "SimState" game.
This SimState could use adversarial AIs created by the participants to test major component's robustness of the cloud state. Red teams could be formed, incentivized by prizes delivered through smart-contract contests, to create attack vectors, from viruses to potential physical war strategies and tactics.
As quant trading companies open financial datasets and offer free tools for algo traders to run their programs, back test their strategies and select the best ones to fund with real money, a cloud-state could use a simulator in the pre-physical stage to select the best governance algorithms and reward their creators, allowing them to build on top of successful designs, later on offering access to real-world historical data to improve and adapt to changing environments.

3. The Achilles Heel of distributed cloud states and potential solutions

[...] it starts to be not too crazy to imagine we can build a 1-10M person social network with a genuine sense of national consciousness, an integrated cryptocurrency, and a plan to crowdfund many pieces of territory around the world. With the internet, we can digitally sew these disjoint enclaves together into a new kind of polity, a network state.

A decentralized cloud state in an intermediate stage (a multitude of micro enclaves) present an attack surface of potentially infinite perimeter compared with physically stable, bounded analog states. We can see this by comparing a regular polygon (representing an simplified 2D version of a physical state and its barriers) to a Koch anti-snowflake:

Overly simplistic perimeter of a nation state

Land perimeter evolution from centralized state to a distributed cloud-state
n-th step approximation to physical perimeter. Source:

As you see the perimeter length tends to infinity, making physical security an impossibility as it requires an exponential increase in manpower, technology, weapons. There are systems where bigger means better under certain contexts, and physical defense needs a certain level of centralization to be cost-effective.

Potential scenarios for violence against the cloud-state citizen/micro enclave:

  • The host state of the local attacking it as a matter of inter-state conflict is possibly a very low probability scenario
  • Most probable will be regular robbery, home assaults. The cloud citizen/state would need to have arranged security with the host state to have access to police, ambulance assistance. This will mean some tax paid annually to guarantee access, which leaves us at the start of the journey, the existing status quo of the citizen within his original State.

Small scale defense will require the use of open-source designs for 3D printed weaponry, drones, and eventually EMP devices as a countermeasure. The communities formed around these principles have already created impressive designs, and I'd say that the killer app for personal 3D printers is weapon design. This will become part of the firewall for cloud states.

Before any violence, the main friction point is the host state's willingness or not to allow its citizens to partially exit its system. The most common obstacle would be a state refusing to allow citizens administrative exit to avoid losing taxable revenue in the short/mid-term. In a more welcoming state, citizens' political-administrative rights would need to be set as dual citizenship with their biggest administrative burden (taxes on income/economic activity) settled with the new state. The host state will treat the small settlements as free-micro-economic zones, which, if it ends up becoming a win for the existing state, should move them into replicating the cloud-state principles or joining in.

How to form a Minimum Viable Defensible Enclave with the least friction?

  • Using a DAO where its citizens voluntarily donate wealth (voluntary taxation) in a Proof of Stake manner until enough land is secured to start forming sovereign cities. Before that, dealing with inter-nation security at the individual, neighborhood level is not feasible unless we find ourselves in a Snow Crash scenario, with franchises and burbclaves emerging after an economic collapse (which we are potentially not so far away from).
  • Using on-chain pseudonymity for all communications, economical activity until citizens can move to the new enclave, avoiding state interference. In a future with a cryptocurrency being used for economic transactions, where economic activity is done online behind cryptographic protocols and where settlements of the new currency can be done off-line as well, taxation could become a volunteer matter, which: 1)makes networks of individuals free to allocate their wealth to which purpose they see fit and 2)will make governments compete for their citizens.

On large scale defense for networked enclaves or states

A micro navy and an air-force of distributed fleets could allow for a cloud-managed micro army to defend specific enclaves before the cloud-state can flourish completely. This would become possible in a scenario of currency collapse where the oversized armies of big nation-states break down and small mercenary armies become available for hire. Again, an Snow Crash reference, which I'd prefer not to become a reality, but that's not impossible in a world where nations have moved from a collaborative strategy to a competing, survival of the fittest one.

At the beginning of this article, I wrote that cloud-states are part of the future. Their seed, digitally networked communities, are already affecting economic actors (think GME and the r/wallstreetbets community, or the BTC community as well) This is also a weak spot that can be and will be exploited, as by its nature, joining a cloud-based community is orders of magnitude easier and faster to do than becoming a member of an analog state, but it can be alleviated by proper governance through the use of protocols, smart-contracts to accept new members. Here is where protocols to build on-chain reputations come in, and will become a necessity to avoid state hijacking.