I have a definition of a network state at thenetworkstate.com, very conveniently. And briefly, it is a cloud community that starts online, that gathers enough capital and cohesion, and it crowdfunds territory, and eventually lives together, right? So, it's a cloud community that crowdfunds territory. That's and eventually gets diplomatic recognition as being a comparable sovereign to an existing state. There could be many intermediate stages. It could, you know, just start as like a Chinatown or Little India-like thing, and then it's a network of Chinatowns around the world, but they think of themselves a common community, and eventually they negotiate special economic zones or form political parties, and in the long term they get some form of diplomatic recognition, which could take decades. It could take a long time, maybe even centuries, who knows? But or it could take years. It could happen much faster than you think with things in crypto. That's the idea of a network state is essentially a way for the network to get a state of its own, right? An online network to get an offline state.
You asked another question, which is what is a startup society, right? And if we define a network state as almost as the endpoint, it's like saying a public company, you know, which is in a sense a public company is being diplomatically recognized by the SEC or by a regulator, and it's allowed to list publicly, right? There's a whole process it has to go through, there's a whole listing process. And the same way I think of a network state as comparable to a public company in the sense of it is diplomatically recognized by other states, okay? But on the other side, you have a startup, and that's just something that's just gotten going, you know? It is not the final form. It could literally be one person with a dream. And you understand the difference between a startup with a $0 valuation and Google with a trillion-dollar valuation, even if you know, you recognize that they're the vast vast vast vast vast majority of startups won't be Google or Facebook or Apple. Even a billion dollars is hard to get to, let alone a trillion dollars. Even if you recognize that, you also recognize there is a path from startup to Google. Google was a startup once. There is a path from startup to Facebook, from startup to Apple, to Microsoft, to Amazon. That's happened, right? And also in China, you know, there's a path from startup to Alibaba and whatnot. There's a path from startup to Flipkart, okay?
In the same way I think there's a path from startup society to network state. It might be something similar where there's a million startup societies for every diplomatically recognized network state, or a thousand startup societies for every, let's say, unicorn that has, you know, 10,000 people and a billion dollar annual, you know, rent that's paid to it, right? Or subscription revenue. But now you can think of the two ends of the spectrum. So, startup society network state is like startup and public company.
Right. And another way of putting it, maybe an easier way to understand it, the parallel physical and the parallel digital. Right? The parallel physical are the in-person things, and the parallel digital are the cloud things, and you can combine them together, right? For reforms. And then you can start to see how all the stuff we're already doing in tech helps this. In fact, a lot of people who are doing things in tech are sympathetic to this. And this is both a kind of startup, but a new kind of startup because it's physical. Okay. So, now your question is, why would anybody want a parallel system? Why would you want parallel physical, parallel digital? Answer, basically in the US, but also in other countries, states are failing, right? People want to move out. I mean, the you can put up the stats, show people moving out of blue states, moving out of California, moving out of San Francisco, moving out of blue cities. These are places that used to be amazing 20 years ago, 25 years ago, under, you know, Giuliani and Bloomberg, which were both Republican and Democrat. It wasn't really a partisan thing. New York City was a great place to live. It was low crime, it was the right balance of being internationalist and capitalist, and lots of people came there. It was great. San Francisco, Stanford, these were really the pinnacle of the world in let's say the late '90s, early 2000s. Now, their governance has gotten messed up, and people want alternatives.
They don't yet have it, because think about how big a deal it is to build a better San Francisco, or a better New York, let alone a better United States, or a better China, right? These are this is pretty hard to do, but it's not impossible, because the United States was a better Britain, right? And Britain arguably was a better Rome, and Rome was arguably a better Greece, right? So, it is it's difficult to do in the same way that it's difficult to build something to compete with Microsoft or Apple or Amazon or Google or Facebook, but it's not impossible.
Right, difficult but not impossible is something that's hard for people to get. You know, that's why you have to build in a risk-tolerant way. You need to allow lots of failures where you can save things together. The short answer is discontentment with the existing system leads people to seek out the parallel system.
I think of it as there's a few different ways to think about it. One way is most I mean here's a funny way of putting it. The United States is still not mainstream. You know why? Only 4% of people have adopted the United States. 96% of people have not. It's never going to go mainstream. It needs to appeal to normies. Okay, right? That's a funny way of thinking about it. Point is, most people still live in their ancestral countries. Most people have not come to America, right? Most people may not come to America. Yet, America changed the world. And its example influenced every other country around the world, okay? Extending that point, most people never worked at Google. Google changed the world. Most people never worked at Facebook. Facebook changed the world. The power of a real example, the power of example is so that's why I talk about the crystal structure, right? That's actually what we want to build. We want to be an example, a shining city on the hill, except the city in the cloud, right? That's a John Winthrop reference from the early early Americas, okay?
And so the point is that everybody doesn't need to do this. We can have 0.01% of the world that wants to start a new country. That's 800,000 people. That's about the size of Estonia-ish, which is like 1 million people. And Estonia's been extremely influential with 1 million people, right? So you know, another way of putting it is if you like your country, you can keep it. Okay? If you like your country, you can keep it. You don't you know, don't want a network state, don't move to one, right? And basically we're building them in the piece of territory that no one's built anything on for the most part, right? So, you know, why would you care? Do you care about the desert? Do you care about Burning Man that much? If you don't care about Burning Man, leave it alone. It's somebody else's thing, right? Let us opt out. And maybe we'll fail, and then you can laugh, right? Or maybe we'll succeed, and then you can join. There you go. Or maybe you don't know if we'll fail or succeed, and you can invest. So even if you can't travel there, you can invest in it, right? So that's how I think about this.
So if you think about today's online networks, okay? You think about Twitter, you think about Facebook or Instagram, etc. All people are doing collectively is they're hitting like. Maybe they're replying. Okay, maybe they're upvoting. But for the most part, you have just gigantic milling crowds online, and all they can do is hit one button, okay? To get them to do something constructive together is much harder. The closest, you know, I'll give some examples of people working online in constructive ways. A Google Doc that a lot of people edit at the same time, right? Now today Wikipedia's completely corrupt, and it's a terrible place. But it was at one point, I mean, meaning like you know, for example, the article on Stalin, it keeps whitewashing all the genocides that he committed, but you know, this is something where there's a lot of people who are time rich rather than capital rich at the Wikipedia. Still, Wikipedia in its heyday and at least for technical topics is another good example of sort of collaborative editing where people are, you know, building something together online, right? Something complex, not as simple as hitting a like button, but a complex digital object, right? GitHub is another example, open source. You have complex digital pull requests coming in, you know, many you know, the exact configuration of bytes. If you're off by one byte, it can mess up the entire repo if it's done wrong. So, it's a complex digital object that can be built in parallel, but requires some skill to build, right? So, Google Docs, Wikipedia, GitHub, there's more examples. There's something called like the I think the massive math project where Terence Tao put up a math problem and tried to have a bunch of people solve in this comment section. They did actually make progress on it, which is interesting, right? You can see that there's an extent to which it's like a bunch of AIs all prompting each other and one guy's idea leads to another guy's idea and so on and so forth, okay?
So, the point is though that most of work that we're doing online is not collective action like this. It's just mashing the like button. Collective action, again, let me illustrate the difference offline and then put it all together. Offline, I mentioned this analogy before, but if you tell a hundred people to go and burn down a building, okay? They can easily do it. One guy grabs a rock, third guy grabs some matches, okay? They don't need to coordinate with each other, they don't need to like each other, they don't need to talk to each other, they can just go and smash and the building will be ashes by the morning, right? If instead you tell that exact same group of a hundred people to go and build a building, suddenly that's much harder. First of all, it's definitely not going to get done by the morning unless they happen to be construction workers and foremen and so on there. You have to have electricity and you need to have you know, people who know plumbing and people who know HVAC and all this stuff has to come together to build a building, right? And those skills may not be present. The motivation may not be present. 100 people burning a building, they can easily do it. Building a building is much, much, much harder. So, that's what I mean by collective action. Collective action is to get a bunch of people online doing the equivalent of building a building. Whether it's a digital building like a complicated open source repository or a literal physical building that they crowd source, you need much more coordination. Again, what's the online equivalent of burning a building? It's cancellation. It's a mob. It's burning down someone's reputation. Everybody all yelling at somebody, maybe contradictory things. Often you'll find somebody who says something controversial, and then people on the left and the right yell at them for incompatible reasons, but they're still yelling at them. So, the average person can just sense huge amounts of negativity towards this person. They might get fired, they might lose their job, they might lose customers, they get lots of negative reviews for the restaurant. That's the equivalent of like digitally burning down a building, right?
We need more digital building of buildings. And the Wikipedia example that I mentioned shows why you need a community capable of collective action. Wikipedia, when you're talking about editing history or politics, you need to agree on values. Wikipedians are no longer representative of the population at large, right? They are basically so, you know, it's funny this is one way of putting it, but they're demographically, technologically, and sort of intellectually unrepresentative of the population, right? They're politically very different, they're demographically different, they don't represent much of the world, and so on and so forth. So, they are community that's capable of collective action, but for themselves. It's Wikipedia's for Wikipedians, right? It's not for you. It's for their interests as they perceive it. They like the power of writing history because they want to shape history in the perception of history, and attack their enemies and boost their friends, right? So, point is that the ability to have collective action is what is the difference between a startup society and like a Game of Thrones fan group. Right? All those people are just there for the show. They're not going to do anything together. You know, that's maybe not burning a building, but that's like just eating popcorn in front of a building. They're just not building it, right? So, collective action is actually a very high bar. We haven't yet got great tools online for collective action. Crowdfunding is one thing, building a get-up is another thing, but we can do much more.
So, collective action, blockchains are a massive innovation in collective action. First of all, they're basically parallel governments. So, they have property rights, they have contracts, contract enforcement, dispute resolution with, you know, slashing and things like that, okay? They have identity, they have a registry, which you could use in theory for marriages and births and deaths. They have a ledger that you can say this happened at this time and this was agreed on. It's now being used to record votes and things like snapshot.org. So, many of the functions of an offline government and blockchains are online governments. In the same way you might drive across the border to Switzerland in the past to store gold, you just take a little, you know, shuttle up to the cloud to Bitcoin to store digital gold, okay? So, you can think of them as basically large communities of hundreds of millions of people that are adjacent to you not in physical space, but in digital space that have their own laws that they have agreed on and that you can then go and kind of store property with them. And the ridiculous popularity of this has been shown over the last 15 years where these digital governments have gone from zero to a trillion dollars in, you know, market cap. Larger, frankly, than most of the governments in the world other than the very, very largest, right? So, we're in the middle of this already. It's like obvious that, you know, it's 2024, right? It's obvious that by 2034 this will be like 10 trillion dollars or something much more significant than it is now. And many people will be crypto first and most of their balances will be in crypto and their identity will be in crypto and their private keys will be their private property for many things, okay? So, that shows that the offline governments that are failing in dispute resolution or property protection and so on, the online governments, on-chain governments are winning, right? And actually I should distinguish online governments like Facebook and Twitter and what have you from on-chain governments that have stricter rule of law, right? Like Web3 is stricter rule of law and it's more binding. The contract isn't just something that can easily be mutated as opposed to Web2 where there's a system in who can deplatform you at any point.
So, once you think of blockchains as digital governments, they're the reason they facilitate collective action is now it's not just people can like and post and tweet each other across borders, they can pay each other. Right? They can coordinate on tasks and get paid for it and not just individual payments, you can have complex contracts that coordinate people across borders. And so new kinds of collective action become possible in the same way that yeah, in theory you could start a newspaper before the internet, but in practice it's way easier to start a group blog, right? In theory you could maybe set up a conference call before the internet, it was quite expensive, an international conference call would be difficult. In practice now we do it probably a 100,000 or a million X more frequently than we used to it, maybe 10 million X in terms of Google Meets and WhatsApp group chats and so on. So, crypto facilitates collective action among larger numbers of people because it has payments, contracts, dispute resolution, all this kind of stuff and it's basically a digital government that facilitates collective coordination the same way the government of Japan does, right? The government of Hong Kong does, it facilitates collective action. The government of Singapore does, right?
Why longevity? So, for a long time it was difficult to articulate why are crypto people into startup cities and longevity? That doesn't seem to have anything to do with cryptography or blockchains or finance, it's a world away, right? But actually they are similar if you start to think of them as crypto is parallel finance and longevity is parallel medicine and startup societies are a parallel state, okay? So, you know, with parallel finance you start with Bitcoin, and flips basic assumptions, you know, rather than have 2% inflation and you lose 2% of your wealth every year, you have Bitcoin and you lose none, right? Longevity similarly flips the assumptions of medicine where rather than assume that you die slowly and lose 1% of your health each year, longevity says, 'Lose none.' Right? So, rather than just gradually losing your wealth like in the traditional financial system, gradually losing your health like in the traditional medical system, or gradually losing your sovereignty like in the traditional political system, like every year there's another Orwellian act, the Patriot Act, which surveils you, right? And it basically betrays America's ideals. Or the Inflation Reduction Act, which boosts inflation, right? All these things are titled in a form that's adversarial labeling. They're titled the opposite of what they are. It's a very fundamental thing where they're intentionally misleading people because it's like there's something called the Stroop test. Do you know what the Stroop test is? You take the Stroop test, it shows you colors spelled out, but they're highlighted in a different color. So, it's like b-l-u-e colored red. Okay? And now you're supposed to say what color it is, and people find that hard. It's slower when they do it than when they are just naming blue is colored blue and green is colored green. And that shows the cost of adversarial labeling, right? So, lots of things in the legacy world are labeled the wrong way as, you know, monetary policy is supposed to be helping you, and it's actually diluting you. And a lot of medicine is actually hurting you. Like for example, the food pyramid is a medical recommendation that would hurt you if you just ate tons of grains every day. You become fat and inflamed and so on. You actually have to like invert the food pyramid. Traditional medicine is fundamentally wrong in certain things that you think they did a lot of research on. They're absolutely reverse wrong, right? And the traditional political system is just fundamentally it's an inversion of reality, right? So, the reason that the same people who are into crypto, they have a different solution that's right. Okay? It's easy to do different and wrong. It's easy to do mainstream and default. It's really hard to do different and correct. It's a The reason is it's one thing to use Microsoft Windows, it's another thing to say Windows sucks, and it's a yet a third thing to build Linux. That's a lot harder. A lot of people agree, 'Oh, Windows sucks.' or you know, for some reason. To say exactly how it sucks, and to build Linux or to build Mac OS, those are different visions of why it sucks, right? If you think Windows sucks because it was closed source and it didn't give you facilities for the power user and you couldn't get in there, that was Linux, right? And that led to the back end of Google and Facebook and everything else, and led to Android, led to all the stuff. If you think Windows sucks because it's not intuitive and not user-friendly and it's hard to get printers to work or whatever, then you do Mac OS where everything is an easy-to-use OS, right? Nowadays, I don't think there's that much of a gap between Windows and Mac OS, but that's because Windows has copied things back and forth or whatever. And even Windows on the command line side is getting gotten a lot better. It's not as bad as it was, but that's because those exits reformed the system. In the same way, by building parallel finance, we've reformed traditional finance. BlackRock's now offering Bitcoin. By building longevity in parallel medicine, we'll reform traditional medicine, we'll pull people over. By building startup societies, we'll reform the political system as well. Not without some fireworks, right? But we'll see what happens.
Sure. So, just to define some things first. In cryptocurrency, we talk about L1 or layer one as your difficult-to-build blockchains, right? Like Bitcoin, Ethereum, Solana, right? These are extremely difficult-to-build organizations of a kind, okay? And then on top of them, you can build L2s or smart contracts. An L2 would be like Polygon on Ethereum, where it handles some subset of transactions, right? Or you could just have a smart contract. The equivalent might be an L1 is the United States or China, right? A smart contract would be the equivalent of like a company incorporated on China or the US's laws. An L2 would be like a special economic zone, right? So, it's more substantive than simply a company. A company you can just do a smart contract on top of it, right? But, a special economic zone would be basically be like a subunit of this region that has its own laws or it's got its own style or whatever. You might also argue that it's a neighborhood, right? It's a it doesn't have to actually have its own laws, it's just its own space. But, you know, you can argue with the analogy somewhat. But, the point is that L1s are very difficult to establish. They have some measure of physical sovereignty. It's in the physical world, it's often fighting a war, winning political independence. It's contentious, typically, to get an L1. It's a difficult to reproduce process. But, then building an L2 on top of an L1 is much easier, and it starts to add new features to the L1s. So, Prospera was very difficult to build. It's arm wrestling with the, you know, the current Honduras government has agreements with the past Honduras government. It's gone all the way up to, you know, Washington D.C. and so on for it to be legal. So, you know, and they're winning that. Okay, but that's a huge mud wrestle. But, what that does is that enables things to be built on top of it, right? The same way that Bitcoin is a huge mud wrestle, Ethereum is a huge mud wrestle to keep it legal, then you can build things on top of it if it can remain sovereign. And in fact, those things you build on top of it add more economic value to it and provide a budget for it to continue to remain sovereign. So, there's a positive feedback effect. Right.
I think they're both important. I think that you need the digital native to get the physical native. And without us having social networks and cryptocurrency and messaging apps, we wouldn't have Prospera, we wouldn't have Culdesac, we wouldn't have Cabin, we wouldn't have start-up societies or network states. So, in a sense, there's a giant funnel where you have the whole world and you have the people on the internet and the people with mobile phones and people who are on social media and Twitter and the people who are cryptocurrency and the people who are into start-up societies and people who actually built them, right? And as, you know, more people come to this, that funnel just expands, right? And so I think that the digital was necessary for the physical.
Win-win help-win it is an explicit articulation of the ideology of technology at its best, okay? So, just to motivate, conservatives are typically they're typically not that ambitious. So, they want to live where they've always lived, they want to get married, have kids, drive back and forth to work. They're basically okay with the system as it is. That's almost by definition a small-c conservative. And so they don't want to change the world, okay? A progressive does want to change the world, but often they want to do so because they perceive some great injustice. And so they want to capture the government and use it to redistribute resources. It could be communism, it could be wokeism, many variants of this. So, they are ambitious, but they're zero-sum, sometimes even negative-sum, okay? Then you have libertarians who are ambitious and they're willing to play positive-sum games, but they often express things in terms of live and let live. Leave me alone, okay? The problem with that is that's a Little House on the Prairie ideology with an isolated group or person by themselves, and in any conflict with progressives or conservatives, libertarian loses because conservatives and progressives are capable of working together in large groups, which you need for large-scale things like buildings or ships or things of that nature, right? Finally, that brings me to technologists, which are win and help win. So, that is ambitious in a way that the typical conservative is not. It is positive sum in a way that the progressive is not. And it is collective action in a way that the libertarian typically is not. And also the order is important because win and then help win. So, first take care of yourself, put those wins on the board, gain the resources to then help others win. Right? So, what does that mean practically? It means get an exit and then angel invest in others coming up. It means master a subject and then teach online for free, okay? It means get really fit and then help others also get fit, show what you did and so on, right? And those are at least three axes I think about a lot, which are what I call learning, burning, and earning, right? So, learning new things, burning calories, and then earning wealth, right? Now, I need to burn more calories. I know I was actually in great shape last year. I got out of shape, but I'll get back in shape, all right? So, you know, we'll put that on it. And we'll do a time lapse after a year or something like that, you'll see, okay?
That's right. I'll ask a question. I've been doing the learning and earning, not as much the burning recently. But at least I know, see, that's the thing is hypocrisy, people say you're preaching, you know, you should practice what you preach, right? But actually often there's a gap between what you know you should do and what you can actually do on a daily basis. You're energetically constrained or whatever, right? It's like there's another saying, the spirit is willing, but the flesh is weak, right? So, at least you know what you should do and you're an imperfect person, you get to that every day and you try, but at least you got the right goals or whatever, anyway.
It's a lot like cryptocurrency, where on the one hand, Bitcoin is uncompromisingly radical in its own way, a stateless currency that no government can freeze or seize or what have you, right? You can't reverse the transactions, the property rights are protected by encryption, no government has system administration access, all that kind of stuff, right? On the other hand, many individuals have made many compromises along the way to make Bitcoin adopted. Example, off-chain transactions at cryptocurrency exchanges, or people who are taking custody of your coins, or people do stable coins that look like Bitcoin, but they're actually mirroring off-chain assets on chain. And even, you know, other kinds of compromises are being made. And those are totally reasonable, right? You want to kind of be a pragmatic idealogue. You have a certain goal there, and you have a pro-freedom goal, and that's kind of out over here, then you can dial it back and titrate it down or what have you.
And so, if we think about the network state as like the ultimate goal, which we want to achieve peacefully, by the way. India achieved independence non-violently. Singapore achieved independence non-violently. And it is possible to do that, right? In fact, if the largest country in the world managed to do that, maybe others could do it, right? This is not to say everything was Pollyanna, you know, there's been issues in the subcontinent or what have you, but in general, I think like Gandhi's model had a lot of merit to it and shows that it can work on a fairly large scale potentially, right? So, you know, Bitcoin has been and the cryptocurrency has basically been built to almost a trillion dollars without firing a shot, right? Google, Facebook, Apple, Amazon, they've built what they've built on the internet without really any military thing whatsoever. Certainly, there's countries that are guarding property rights, so Bitcoin's an even more full-fledged expression of the fact that there's no guns involved, okay? But so now, with those analogies of how Bitcoin is over here, but you could dial it back, you could have a network state over here, and you dial it back, and you have starter villages or Chinatown-like things. Basically, if a country is okay with a Chinatown, or it's okay with having a Little India, it should be okay with having a node of a network state, right? Many people in Little India or Chinatown will correspond with the home country. Sometimes the signs are even in Chinese or Hindi or Tamil or what have you. But it contributes to local community. Obviously there's great food, but there's also talented engineers, there's commerce or trade, things can get sent back and forth. And you know, I recognize that now is a time of rising tariff barriers and people yelling at each other across borders, but I think nations will grow to regret that because it can make everybody poorer if everybody yells and fights each other. In a sense, as nationalism and socialism rises offline, we're internationalist capitalism online and on chain. You know, we're the counterforce to that. Where, for example, Americans and Chinese, they can't do business nowadays in each others' courts very easily, they don't trust each others' property rights or each others' laws. If Elon can't get justice in Delaware, certainly a Chinese entrepreneur won't be able to. If Jack Ma can't get justice in China, probably an American entrepreneur won't be able to, okay? But where they both trust is the Bitcoin blockchain and more generally, you know, Ethereum and Solana and so on, right? You have tens of millions of Americans and Chinese people that both hold their property on chain. And that's a really big deal, right? That means in a sense they trust that government more than their old physical governments, okay? So the answer is first, we take the example of cryptocurrency where countries basically gave up some sovereignty to gain some money, right? They gave up some control to gain some talent. That's the answer. They give up some control to get money and talent and some enrichment, right? And that's actually a deal that happens at the scale of countries and cryptocurrencies or countries and startup villages, you know, or which are like little Chinatowns that accumulate into a network state, okay? So you can have that at this very macro scale, but you have it at even the micro scale, you know, I know there's a Ben Franklin quote which says, 'He who gives up some liberty to gain some security deserves neither.' But everybody's making that trade all the time, right? When you take a job, you're giving up some liberty to gain some financial security. It's a win-win trade where you agree to constrain yourself. Example, you come to work at a certain time and you leave work at a certain time. You're giving up some liberty, but you're gaining some financial security. When you serve in a military of any kind, you're giving up some liberty and getting some security, right? This is just what being an adult is about. This is why I'm sympathetic to many aspects of libertarianism and anarcho-capitalism, all that kind of stuff. But if you notice we talk a lot about collective action. We talk a lot about doing things together. So, libertarianism is correct when you've got a bad government, but the goal is not to have no government, but good government. Like, yes, crypto-anarchy is better than an anarcho-tyranny, but I prefer crypto-civilization.
It's all of the above, but basically one of my sayings is after you solve the hardest problem, something else becomes the hardest problem. Okay? You'll recognize from chemistry as like, you know, the rate-limiting step, right? You'll recognize this if you know supply chains or manufacturing as what are the supply chain bottlenecks, okay? And so, any one of those steps at any point could be the rate-limiting step, and you need to just kind of analyze the entire system and see. In my view, I think until recently, the rate-limiting step was just the community coordination and the capital to do this type of stuff, right? And crypto has unlocked a lot of that. Decentralized social media has unlocked a lot of that. Also, the degree to which existing governments have failed, especially during COVID, has dropped 20, 30, 40 points for people who just sort of saw what the system was holding back, how it was saying masks don't work before they do, how it was just totally saying X and then the opposite of X the next day, for many different values of X, for millions of people, hundreds of millions, billions of people across the entire world, shamelessly, without any penalty, right? So, what all of that has built demand for this. And I'm not sure any one person could do something. Obviously, Satoshi's made incredible contributions. Elon has with Twitter, right? And with decentralizing, you know, communication. It's everything from the iPhone to Google to social media. All these things have led to this moment where, you know, it's like the Victor Hugo saying, like nothing can stop an idea whose time has come.
Do you know how crystallization works? There's like order that's locally formed, and then it's contagious order. It's like a crystal is like the opposite of a fire in that way, right? A fire is disorder, and the disorder spreads, and then everything is just charred and entropic, right? A crystal is like a reverse fire, where it crystallizes and it forms something cool, and then everything goes snap snap snap. It all just snaps to grid, right? It's like you've seen a game of Othello where someone just flips all the things at once, right? That's how I kind of think about it. I think we need the equivalent of a crystal structure that is a fully functional thing that everybody can copy. Kind of like what ChatGPT was for AI, right? Kind of like what Bitcoin was for cryptocurrencies, right? Kind of like what Facebook was for social networks, or other massive hits have shown that it's possible, and they've also shown the sort of form factor that, you know, sort of snaps into your eyes and ears. What I mean by that is you heard the term form factor. It's kind of like how is something shaped? Example, you've got a hand computer like a phone, or a laptop computer, or a desktop computer, okay? You could have just like a USB key that just fits like this or a much bigger one, you know, there's different form factors. It's like the same functionality in different sizes. And in the same way, you know, you have and they've got different purposes when they've got different sizes. A handheld computer is different than a laptop, is different than like a big desktop that's stationary or whatever. You just use it in different ways, okay? So, in the same way, when you talk about digital products, the user interface of Twitter or YouTube or Google Search really hasn't changed that much in almost 20 years, right? Or maybe 10 years, right? Google Search feels pretty similar. There's big differences like instant search and other things, but it feels like put in a query, get back links, right? YouTube feels like the same as it was 10 years ago and you could confirm that by looking at archive, but it's like one big video and then a bunch of suggested videos, right? Twitter feels basically the same, the feed. And one way to think about that is it's like a power outlet, okay? There's a lot of iteration on how you'd get power to a building in the early days of electricity, right? There was AC or DC. And then what happened was after a lot of iteration, people snapped to just a few power outlet form factors for the world, right? Here's how the US works, Australia, you know, like India and England and a few other form factors. And kind of like that, you have some form factors for social media. You have like the feed of Twitter. You have the videos of YouTube, right? You have, like the TikTok style. I'm not saying nobody can innovate here, but you've got a few of these form factors. So, once you've got a known form factor and a known nailed UX, it can just be copied. Now there's like 50 different Twitters. There's Gab and there's Parler and there's Truth Social on the right. There's Mastodon, there's Blue Sky on the left and Farcaster in crypto and Lens and DeSo and all these are basically Twitter plus something. Because it's like that form factor has been cloned a bunch of times. So, I think that's sort of what we need is something that is the Model T, it is the iPhone, it is the ChatGPT, it is the YouTube, it is the Bitcoin that everybody copies and clones because it's the one that just works.
So, media is really important because you have hardware and you have software, but you also have wetware, right? Wetware runs in the brains, okay? So, if you're doing media, you are not a software engineer, you're a wetware engineer. Okay? You are installing ways of thinking into brains of people, filters, lenses with which you view the world. And when I say lenses, I mean it in almost the most literal sense, like Snapchat-style lenses, okay? For example, have you seen those apps that will translate signs from Chinese to English, okay? That's like a digital lens you can put over the world and you can comprehend what's being said there. Now, imagine that you had a kid and they watched Chinese TV from the beginning, they would get that filter installed in wetware into their heads and they wouldn't need to run it in software in a phone. That's one where the analogy is very concrete, right? Another example is if I show you like a green dollar bill and I show you something that looks exactly the same, but it's blue, you will recognize, oh, that's money and that's like Monopoly money, okay? But there's no physical difference between them. It means you have gotten a lens, a Snapchat-style lens, installed by countless movies and TV shows and other people that you've talked to over the course of your life that shown you, okay, that's what a dollar bill looks like and this is not that. And the way you can prove that is go and take some old currency, Zimbabwe currency or whatever. It kind of looks like a dollar bill, right? And at some point it was considered currency, but it's not anymore, okay? So, lenses have been installed into your eyes. So, I gave you language example, I gave a dollar bill currency example, but there's so many more, right? If you think about, there's so many cultural conventions, like for example, there's a movie that's not historically accurate, but Inglourious Basterds, if you've ever seen that, okay? By Quentin Tarantino, right? So, there is a scene where they're in a German bar and the soldiers are asking the Allied spy because they suspect he's a spy to count to five. And he's like, 'Okay, sure. 1 2 3 4 5.' And they know he's now a spy, and the reason is I think Germans or at least at that time they started like 1 2 3 4 5, okay? So, they had a way of, nobody ever taught them specifically to count that way. It was just something they saw monkey see, monkey do. They saw other people doing it. They learned to count that way. Yet, that was a shibboleth. That was something that identified a member of this community versus that community, okay? So, those are a few examples of why media and then more generally the culture that you immerse people in gives the signs, the signifiers, all of the wetware that allows people to snap together and coordinate. That's as important as software and hardware. In fact, the wetware is arguably a superset of the economics, right? Because it's the thing, what Bitcoin achieved is not simply an installation on people's computers, but something in people's minds so that we value that as currency, right? So, it is not the same as simply going and building a bunch of dams or power plants around the world. You didn't have to change any human minds really or minimal number, just the people to get the permits or what have you. For that to work, you didn't need any cognition, no psychology, right? To make a plane work, you could have 100 people in a circle around a plane and they might think planes don't work, you can still take off. They might think a plane works, but if it's broken, it won't take off. But if they're in a circle around a cryptocurrency, it's not a sufficient condition, but it's a necessary condition that they believe in it and there's some wetware insulation for it to take off. You also need other things. It needs to be hack-proof. There is a technological piece of it, but at least half of the piece is the wetware piece. So, as media, you're programming wetware.
So, first is I'm moderately bullish on India, extremely bullish on Indians. So, let's say what I mean by that. India, the nation-state, I'm a seven of 10 bullish on India as a nation-state, six and a half seven of 10 thereabouts, but I'm 10 of 10 bullish on Indians. And that's like kind of the opposite of let's say China, where China, the country, is, I think even given its current setbacks and so on, it has very strong fundamentals. The factory of the world is in China. They just make everything, right? But the Chinese diaspora is getting pushed back abroad because people are perceiving them as being, I think unfairly for many Chinese people, perceiving them as being spies or agents of China and so on. So, Chinese diaspora is not that strong, but the Indian diaspora is extremely strong. So, when we were putting in the sentences, China plays the world's best home game, India plays the world's best away game. And so, if you think about it that way, I think India's great. I think it's a place I'm investing. I think I'm recruiting talent out of there. I think India becomes a media superpower that it becomes half of the English-speaking world in a way that people haven't really priced in. That I think it becomes a co-equal partner to Europe and America in probably the next decade or two. It's kind of already coming there. But I also think of it as a launchpad for the world. The big thing about India is the sanitation has massively improved, malnutrition has improved, internet connectivity has improved. So, all these people are getting a shot, right? Now, the thing is that means that the livelihoods of perhaps everybody up to, I don't know, the 80th percentile, 90th percentile, and so on has improved. Once you start getting into like the extremely ambitious person, the 99.9 percentile, then, you know, they might have a choice as to, you know, do they work in India and they wrestle with the bureaucracy? And some people have certainly chosen to do that. There's a lot of Indian unicorns, and I invest in those and I respect that. But others will say, 'Okay, I want to take my chance abroad because I want to do something with maybe less bureaucracy or what have you, right?' That's no reflection on the people. I think that's a legitimate choice. It's kind of like, do I build on this platform or build your own? Because the diaspora, I think people now have a better understanding of the diaspora. People used to use the term brain drain as if it's a one-way flow. But now people talk about brain circulation or something like that, where all the Indians abroad massively strengthen India at home. India would not be what it is today without the Indian diaspora, without Khosla, without all the Indians who have risen in technology and finance and now politics and media and so on and so forth. Those are ambassadors of their own, right? And the Indian government actually recognizes this. They send letters to Indians, NRIs around the world that represent India well. They have something called OCI card, if you're familiar with that, Overseas Citizens of India. And just the existence of that card alone is something where they recognize people will go, they'll make money, they'll accomplish things abroad, they'll come back, they'll cross-pollinate. That's as India's always been. It's always been a crossroads of cultures, of many different religions and nationalities and so on there. And so I think that's the way I sort of think about it. Like, moderately bullish on India, extremely bullish on Indians, and every Indian can do voice or exit, right? They can try to wrestle with the bureaucracy domestically. And frankly, that's not as futile as it was. India can build, right? Like, the Parliament building was built for 125 million bucks in just a few years. It's like for comparison, the US built an embassy in Vietnam that was like a billion dollars, right? So this is 1/10 the cost, faster, and a much bigger building, and much more central, right? India put a lander on the dark side of the moon for 75 mil, which is less than the cost of a Hollywood movie about doing that, okay? India's built trains, they've got high-speed internet. There's a lot of things that India's gotten together, so it's not impossible to do it within India. Before it was impossible. Now it's possible, but you just have to gauge whether the project you're doing requires you to be there or not. And I think both are legitimate choices.
I prize, there's a lot that's good about idealism. There's also a lot that's good about traditional conservatism. And so the right mix of those two, I think, is relatively rare, where here's an analogy that's sort of outside of politics, but a lot of people when they first do a startup, they're like, 'Okay, I want to use the cutting-edge database, and this programming language thing that was top of Hacker News last month, and this AI tool that just came out yesterday, and I put together all the cutting-edge stuff, and I'll be the cutting-edge-iest, right? That's the best. I'll be the first of all those things.' That's the wrong way to do it. You know why it's wrong? What you're doing is you're building something where you're stacking a bunch of wiggly pieces on top of each other, and it's like Jenga blocks, they'll just all come down, right? Instead, what you want to do is you want to do minimum necessary innovation. Doing something new and successful is so hard that you want every single piece of your stack to be as conservative and proven as possible, and then you innovate in that piece that you need to innovate on, right? And that is not saying don't innovate on anything. It's not at all. But it's also not saying add up a bunch of cutting edge stuff to get something that doesn't work at all, right? And that concept that I just expressed there is obvious to any experienced founder or second time entrepreneur, but a lot of people have to just run and, you know, skin their shins to really understand what that means. It's like people who try to put everything on chain even today will understand the pain of going on chain for everything. You do basically minimum necessary crypto to enable a new experience, right? It is true that technological disruption exists, but as an example, Netflix did minimum necessary internet for 15 years, ish, right? From '99 to roughly 2013. I might have the dates wrong, but it's roughly around that time. They didn't do streaming. They did mail order DVD for like a decade plus. Bandwidth wasn't there. Everybody knew streaming was eventually the future, but they knew it wasn't the present. And Netflix, they managed to beat Blockbuster basically without getting to streaming yet. And then when they did streaming, they fully killed it, okay? Amazon, when it started out, why did do books over the internet? Because people usually didn't need books stat. They kept really well, so they could store them in warehouses. They had a huge number of SKUs, and so on. Books were one of the few goods that you could sell profitably over the internet. Internet users early on were bookish and whatnot, right? So, all those things were optimized for minimum necessary innovation. Google was 10 blue links because that was very bandwidth limited, bandwidth constrained, right? So, the point is that now apply that to a society, and in general, I think kind of take the most conservative ideology you can for whatever that may mean to you. In other words, might be the most normie ideology you can, small c conservative, where you just take proven things that every human has done since time immemorial, then you innovate on the minimum necessary. And that will get you something where you can sort of scope where that innovation is, versus changing every law and societal convention at once, right? You'll probably have a bad time.
Yeah, so that's my Twitter thing, right? And it is infinite frontier, immutable money, eternal life, right? So, I think it's cool. In six words, it kind of expresses goals. It also expresses a mindset, right? Infinite frontier basically means like no limits other than those that we set for ourselves, right? Infinite frontier means we are busting out, we're going to get to space travel, right? Immutable money means the government isn't going to take the wealth and we actually have something that can stand up to the state, the sovereign individual, right? And eternal life means we can do life extension, right? So, we basically burst through the limits that have been imposed on us. You're in a cage thanks to inflation. You're in a cage because we can't explore the stars. You're in a cage because you die, and we bust out of all those limits at the same time. And that kind of gives an axis and there's a thousand different things you need to do to get to Mars or to get to a digital gold backed currency or certainly to get to longevity, but we're making progress on those once we set the axis, right? And in a sense, you know, people say it's not the idea, it's the execution. And I've got this concept that you're amazed, right? Before the execution comes the direction. Those are direction headings. And you'll have a thousand ideas along this direction, but first you have the moral premise that this is a good thing to do. And you argue that. And once you argue, you know, infinite frontier is good, you get people to agree it's good. And by the way, you'll have to argue with them. They'll say, 'Why are we spending that money on space when so many people are poor on the earth?' Or some stupid which you can apply to anything, right? And really what that is is it's an excuse for them to grab resources and spend it on what they want. You can ask, 'Why are you drinking that drink when there's so many people poor on the earth, right? You don't need the calories, right?' That can be applied to anything to tell anybody to stop doing anything and give it to the collective, right? I'm not saying that you shouldn't participate in collective. There's a tension between the individual and the collective, but there can be a productive tension, a productive collaboration. You've opted in, you think this is good and so on. Not to guilt trip you out of going to space. So, you set that as good, you argue that it's good. You won't convince everybody. You convince enough people and they're on that journey to space. They're on that journey to eternal life and they're on that journey with us to immutable money. So, that's how I think about it.
