Are Network States a Scam?

A retrospective of Network States after 3 years

If you add Reddit after Network State and google the word “Network State Reddit” as one does when they want to know the opinions of the highly esteemed Redditors who all have impeccable taste and highly respected opinions, you’ll come across people calling Network States a scam.

In one such thread from two years ago, you can see people coming up with clever reasons why network states won’t ever work, and how it’s a cult and a grift.

Now that nearly two years have passed and we haven’t seen a single network state scam yet, I think it’s time to do a honest retrospective of network states, or at least the ones that I’m a part of. Keep in mind that sometimes, even Reddit can be slow to accept ideas, and it’s not just LinkedIn boomers who are tragically late to the party, so a few years from now, the sentiment on Network States might be very different than what it is, right now.

But, why do this retrospective right now?

Balaji Srinivasan recently announced the Network School program, where people can pay $1000(with roommates) or $2000 (solo) per month to stay on an island near Singapore for 90 days.

Since this is the first time that people are paying real money to get involved, I figured it's time to honestly look back at my own journey and write a detailed review of my experience.

This may not be the most unbiased review, as I've often advocated for Network States since the beginning. But I'll try to be as thorough as possible and address common concerns along the way.

Before I begin, I’d like to mention that I’m not going to Network School this year. I have a hackathon coming up that I’m really excited about, so I’ll be heads down for the next few months.

I've been part of network states (yes, there's more than 1) for more than 3 years now. One of the most popular posts on Bright Mirror is a (the first?) science fiction story about network state citizens.

But to understand my journey and this review of network states, it's important to understand the history of how I came to be in a Network State in the first place.

Let's start with how it all started -

Back in 2021, 1729.com was the first site where Balaji wrote about Network States. Through this site, he set up $BTC rewards for those who would review his essays on network states, as well as host other bounties like Learning Replit, Learning ENS, making memes, etc.

1729.com currently redirects to thenetworkstate.com, but the posts on 1729.com exist on Balaji's substack today.

If you scroll down on the essays titled Founding vs Inheriting & Network Union, you can find my name mentioned in the winning submissions section, back when I used to write essays on my personal site.

Most of my essays were chosen as winning submissions, and I was later accepted to the 1729 discord. It was in this discord that Balaji hosted weekly lectures regarding network states, and around 50-100 of us listened to these lectures, took notes and had the privilege of asking him questions.

Later, the discord was rebranded from 1729 to thenetworkstate.com and it has currently been rebranded to networkschool.com.

Before I dive into the positives of this experience, let's start with the negative first -

II.

Is this discord a network state?

For the sake of this essay, let's assume that it is.

The only downside of this experience was Balaji's absence from the discord when his series of lectures were over.

When you consider the fact that this man was writing the network state book at that time, combing through US documents to find out whether the country would descend into hyperinflation, or starting a podcast, or attending podcasts to promote his book - a book which became a #1 bestseller on Amazon despite also being available for free, it's not really a fair ask to also expect him to chill on discord with the homies.

However, what happened in discord in the meanwhile is magical, and that's what I expect to be the prime attraction of network states, at least for now.

"Maybe the real treasure is the friends we made along the way," is a common phrase that is used dismissively when the rewards for something aren't substantial - a common trope in movies where the main character doesn't get what he/she initially wanted.

But in the case of Network States, everyone that was selected had some kind of exceptional ability - along with having the clairvoyance of being at the frontier.

The people that populated the network state were engineers, artists, writers, founders, digital nomads & almost all these people had one thing in common : They all read Balaji's essays and were interested in the idea of network states.

It takes a high degree of openness to new experiences to sign up for something like this, and a lot of agency to put yourself out there.

Here again, I think Balaji may have wasted the potential of having a proactive group such as the one we have, and a lot more could have been done by the collective effort of the initial citizenry.

We're still in the discord, so there's still hope that something will happen, but what we did in the meanwhile is nothing short of incredible.

We maintained regular posts in a proof-of-workout channel where we posted updates everyday documenting that we worked out & holding each other accountable for the same. This was also where we discussed training routines, diets, longevity and the perks of doing this with incredibly smart people is that you find out about things like VitaDAO & Blueprint diet that people only discover months or years later.

We shared links to interesting things, discussed and debated topics, and the conversations would often require opening separate threads as we collectively explored each topic.

Someone voluntarily set up a bot just to summarise our everyday conversations on a weekly basis, and when something like that is done without anyone asking for it - it signifies that the discussions were of a high quality.

We self-organized meet-ups all around the world, along with e-meetups through zoom. All the meet-up pictures got posted in the meet-ups channel, where we also coordinated our meet-ups.

Some started companies and built projects together with people they met through the discord, while some got jobs and internships.

Collectively, we wrote over hundreds of essays by setting up and participating in writing cohorts.

I met some amazing people during this time, and the friends I made surely was the best part of this entire experience.

I've often wondered what sorting algorithm Balaji used to find the group of people who are so ideologically aligned to how I was - optimistic, technical, at the frontier of fields, but also kind, thoughtful & possessing high agency.

Over time, I've realized that "people" might just be one of the best aspects of network states. At least for now, when network states are in its infancy, a network state set up through filters where it only admits people with some "proof-of-work", ends up admitting people who are 1) talented 2) not ideologically captured to the point where they don't get anything done 3) Open to new ideas & experiences.

The intersection of these buckets of people is large enough, but bringing them together is the hard part, one which Balaji's Network State arguably succeeded in doing.

You’d be surprised to learn just how many people fall into the second bucket - people who despise tech reflexively, people who spend almost all their time scoring points for the in-group by insulting & demeaning people they don’t consider their own tribe, people who are so engrossed in the nitty gritty of politics & group-think that their entire identity revolves around the political party they support.

Those who are silent, and thus, intelligent enough to ignore the noise don’t pop out at you, but once you meet them, you might just make a new friend for life.

Overall, I’d rate my initial experience of Balaji’s network state a solid 9/10. I enjoyed Balaji’s lectures, made some life-long friends, and my only issue is a delusional belief that so much more could’ve been done. Perhaps, I’ll start a network state someday to explore my ambitions, but for now, let’s explore another network state that does things differently.

III.

Superteam is another network state that I'm a part of - although they don't label themselves as a network state (yet). It's more like a group of builders but what brings it closer to being a network state is that there's a GDP chart that keeps track of the community GDP of Superteam -

I've been a member of Superteam for nearly 2 years now, and I’ve seen them grow from a small group chat to a global organisation. Superteam isn’t for every body, and there’s a clear mission of building together. It’s no surprise that the most valuable members are founders and engineers, but we do have a fair share of creators, video editors, marketers & designers, aka, everyone that’s involved in actively doing the work to make a project successful.

If there's one criticism I have of Superteam, it's that it's singularly focused on the Solana ecosystem and it's not, by any means, blockchain-agnostic, even though many Superteam members can be.

While Solana is great as a blockchain, I do think such singular focus, while it works right now, might be detrimental in the long term. Regardless of how you feel about Solana or blockchains in general, Superteam won’t be the first to lead you into any other frontier of tech & when the next wave of new technology in a related frontier inevitably arrives - whether that’s AI agents, robotics or quantum computing, unless there’s a way to apply the tech to Solana, it’s going to lag behind.

But such singular focus is what has made us successful at Superteam, as I’m sure there the projects that members have built & people that we’ve onboarded outpaces not just any organization on Solana, but all blockchains that exist. But it does, just by the intensity of focus on one blockchain & ecosystem, reject anyone who wants nothing to do with Solana, Web3 or blockchains.

While Balaji's Network State was limited to us figuring out what to do on our own, Superteam excels at mobilising labour at a specific cause. Offering grants to builders, hosting weekly community calls, hosting IRL meet-ups, discussing what to build and how to build effectively, etc, Superteam tries to ensure it collectively supports everyone in the community to be at their best while creating something new.

The GDP graph shown above is a result of initiatives called Superteam Earn, where any one can post jobs or gigs to be done and people compete to solve them, and get paid in crypto.

There are no standards as to how a network state is judged, but if creating economic value is one such metric, I don't think anyone can compete with what Superteam has achieved with so few resources.

Without naming a dozen names, I've made a lot of friends in Superteam. I've also given back, like any valuable citizen - by travelling to universities to give workshops on Solana development, by teaching young programmers blockchain development at Solana Hacker Houses, and by posting bounties on Superteam Earn to get jobs done. I’ve won hackathons as a result of collaborating with people in Superteam, the feedback and support from the community has been invaluable.

Balaji, believe it or not, is also a member of Superteam, and knows many of the founders very closely. He has observed Superteam rise and take over the world, so I expect Network School to offer similar opportunities as Superteam Earn, which is an iteration of Earn.com - where Balaji was CEO before Coinbase bought Earn.com, and launched Coinbase Earn, which may have been one of their best early customer acquisitions channel till date.

IV.

If I was Balaji, I'd use Network School as a starting point to actually build a network state over time.

A "school" sounds perfectly harmless, compared to words like "country" or "state", and it can actually start off as a yearly retreat for students and like-minded individuals, then expand and be more permanent from there.

As people start settling down, realising the quality of life & opportunities you get there is exponentially greater than anything you'll get elsewhere, this would cause a large influx of people who would want to get in.

That's a problem, but a great problem to have, since you can then use the added demand to attract better talent, investment & build better infrastructure for the people already there.

Along the way, encourage the people to start building companies there. A core advantage of network states is the lack of regulatory hurdles, but before you accept every company that wants to migrate specifically to skirt around regulations, nurture talent & encourage the creation of companies directly from the existing students there. This would prevent Network School from getting a bad branding from the get go, as it doesn’t need a reputation of non-regulation from the get-go.

Since this is the first time that this is happening, one of the primary things to look out for is security & safety. I’m sure very few bad actors would pass through Balaji’s filter, but it’s good to be unreasonably cautious about this since even one bad actor can ruin this experience for many. Some proxies like online reputation, proof of work (resumes, Github commits, on-chain credentials) & simple references of existing people that have built up trust, can go a long way.

Another way of ensuring security is to have systems of anonymous complaints in place, and a readily available team to take care of miscreants. Security & safety, once that’s guaranteed, makes the whole thing a whole lot easier.

Balaji has mentioned that Network School will enable you to learn, burn, earn, and fun. I’ve a slight gripe with this slogan. It should’ve been learn, burn & earn. Fun is implied and if the slogan was three words, it would’ve been more impactful and memorable.

However, if you’re attending Network School, I hope it’s clear from my essay what the real value of Network School is going to be.

It’s not going to be the thousands or tens of thousands of dollars you earn in crypto for doing projects or tasks, enough to ensure that your rent has paid for itself. It’s not going to be the stellar insights about the world that blow your mind and imbibe in you a new outlook of life. It’s not going to be learning from Balaji’s lectures IRL, who is infinitely patient at all times, and would answer all your questions without a hint of contempt.

It’s going to be the people around you. As cliche as it sounds, it’s going to be the friends you’ll make along the way.

Think back to a time when you made close friends. It was probably in school, back when you’re too young to care about status games.

Network School could be your second chance at making such life long friends. It doesn’t matter if your new friend is a retired millionaire travelling the world, or a twenty three year old messing with zero knowledge cryptography. You’ll find something in common with them, and geek out over it, and hopefully, make a new friend for life.

I truly believe that network states are necessary for the world, and one of the only ways to accelerate technological progress is to shut out the politicians who impede & harm growth, not necessarily through ill intentions, but through pure incompetence.

In a decade, we may have a dozen crypto-cities which are transparently run, devoid of blatant corruption, and offers more opportunities than what your existing city does. Even if it's not a dozen, but just 1, just Network School, I'd be happy as I’d know there’s a place for me in the world filled with like-minded people who will accept me.

That doesn’t just happen automatically, and Balaji won’t be able to do it alone.

It is you, every one who is attending Network School, and everyone that’s not but still cheering them on, that gets us there.