How does one found a new country? Balaji Srinivasan promises nothing less than the answer to this question in his book ‘The Network State: How to Start a New Country’. The tech libertarian not only fantasizes about a playground for tech enthusiasts from Silicon Valley but also designs a concept that fundamentally questions existing nation-states. Is the realisation of his idea becoming more realistic? Could this even pose a risk for countries like Germany, the UK and even the US – where the services offered to its citizens might be up for a new competition? Around 2,000 techies gathering Sunday in Singapore for Balaji Srinivasan's ‘Network State Conference’ seem to believe so. Among them famous founders like Brian Armstrong (Coinbase), Naval Ravikant (AngelList), Vitalik Buterin (ETH), and longevity guru Bryan Johnson. Let's take a closer look at what's behind this movement.

The search for belonging and connectedness

The fundamental concept of the ‘Network State’ is to bring together a digital community and organise it to acquire physical space through financial models like crowdfunding. This space is distributed all over the world, fully decentralised, and connected via the internet for a common cause – much like Google's offices or Bitcoin miners.

A year ago, Srinivasan assembled 40 startups to present their ideas around his network state concept. This first ‘Network State Conference’ took place in Europe, where 1,000 curious individuals gathered in Amsterdam. In a context of strong, historically grown locality and a quest for common identity – combined with the urge for global networking enabled by AI and connected technologies – the idea of founding nothing less than a new state emerged. A state that behaves like a startup and can be realised from a computer. This state gains new members through a common guiding principle and shared identity. Among the participants were Scandinavian startups offering solutions for health and legal security, even up to dual passport options.

In an era where belonging seems increasingly complex and the call for political and societal change grows louder, the future convergence of networks and governments might not be negotiated in terms of more or less democracy within the framework of the nation-state. Instead, the solution could lie in establishing new network states. Does this signal the end of the nation-state idea?

Nation-states reduce their ‘service offerings’ for citizens

When the gap between state-offered services and technological possibilities becomes too wide, market mechanisms come into play. This doesn't mean the nation-state must deliver top-tier technological solutions, but at the very least, it must meet the basic needs and satisfaction of its citizens. An example is the German healthcare system, which relies on cost-intensive, individual doctors instead of advanced and more cost-effective technologies. The system is challenged by emerging technologies that enable large-scale prevention, while the current state approach remains reactive – in the realm of treatment rather than prevention.

What happens when technological possibilities and state offerings drift too far apart?

Imagine a ‘McScan-Me’ service available on every corner: for €100 per month, equipped with the latest AI-supported diagnostic technology as a subscription model. This contrasts with the current €1,000 per month for statutory health insurance, where one must endure long waiting times to consult an overburdened doctor. Today, we know more about what's happening in the streets of Gaza, Kabul, or Kharkiv than in our own bodies. The technological possibilities for preventive healthcare – using data models and AI for a ‘perfect’ real-time diagnosis – stand in stark contrast to the expensive services offered to citizens today.

A tenfold reduction in costs and a significant improvement in service offerings could open the market to disruptions. This poses the risk that people will no longer tolerate such a discrepancy between provided service quality and technological possibilities.

The same applies to education. Traditional hierarchical educational institutions with degrees and titles demand exorbitant sums in countries like the USA or the UK. Simultaneously, nearly free learning models are emerging in the digital space, available everywhere in collaboration with AI. At the conference in Singapore the new project of a school was presented. They offer access to a knowledge network that was previously only possible through universities, now replaced by world-class educational models at affordable prices.

Central financial systems are being challenged by digital payment methods and investment strategies. New currencies have been created. The rapid development of tokenomics and cryptocurrencies shows how the network enables real-time exchange at lower costs. The principle is: if the offerings for people – especially the young, digital generation – are too far removed from what's available in decentralised options, pressure on the state apparatus grows.

No uprising, no rebellion: we live in the opt-out society

Historically, the response to dissatisfaction was an uprising against the state. Today's model in a globalised world is ‘opt-out’. The future of artificial intelligence (AI) in peer-to-peer (P2P) networks promotes transparency and collaborative models. Individual computing power is shared to complete complex calculations and AI tasks. Efficiency and privacy increase. We are already witnessing the rise of models like ‘Federated Learning’, where models are trained on decentralised devices without sharing raw data – a method that strengthens both privacy and security. Future P2P frameworks will enable AI models to update based on distributed data sources, offering enormous potential in data-intensive industries.

Today, we are experiencing a future where anyone with a smartphone or computer can contribute to the development and execution of massive AI models, sharing in profits and knowledge exchange without relying on centralised corporations or even governments. AI systems that organically evolve over distributed networks could lead to rapid, innovative, and personalised AI solutions. ‘The Network State’ demonstrates how new cities and countries can already be founded today. Is this truly the end of the nation-state?

Of course, countless questions remain to be answered to establish the first network states. But Balaji Srinivasan is a visionary, and the many tech companies in his ecosystem aim to discover how a network state can function socially, technically, logistically, legally, physically, and financially. What might seem distant for a German federal government – not part of the agenda for political parties preoccupied with internal struggles – is already being envisioned elsewhere.

Even if this isn't Germany's most pressing problem at the moment, it highlights a ticking time bomb. Current central systems are no longer efficient and rely on younger generations paying into these systems for renovation and adaptation.

If mega-influencers founded their own network states, how many would join?

Consider a thought experiment: Cristiano Ronaldo recently claimed to have reached one billion followers across all channels. If he were to move into the network state ‘Ronaldinia’ and announce this on his platforms, how many would follow? Could 85 million young, change-driven individuals be found to join him? With a rapidly aging population and extremely low birth rates, current systems are on the verge of collapse. We are living longer, drawing more from pensions and healthcare systems, while fewer contributors are added. If the human workforce remains essential, rapid immigration is needed; the alternative is robotisation and automation. But if the state's offerings no longer satisfy its citizens even minimally, the leap into a new network state in the future is just a click away.

On September 22, startups presented their offerings for the network state. On Monday, September 23, the first ‘pop-up city’ welcomed its residents for three months. Under the name ‘The Network School’, the new network state inhabitants move to the island with the slogan: "Learn, burn, earn, and have fun", according to Srinivas the 2025 conference will be on the Island and everything will have grown significantly.

What was once an uprising due to dissatisfaction with state offerings is today just an ‘opt-out’ decision away. For Germany, this means: if the young leave, we will be left behind.