In my last post I used a pothole as a small but honest example of how broken incentives produce poor outcomes. The council that patches it does not live with the daily consequences. The residents who do have almost no real power to change it. The same pattern shows up in housing, healthcare, education, and planning.
So what if there was a better way to organise communities? Not by hoping national governments suddenly become more competent or honest, but by allowing people to build and choose better systems themselves?
This is the core idea behind network states, a concept developed and named by Balaji Srinivasan in his 2022 book The Network State. I first came across it during a long conversation with Grok a few weeks ago. I kept pushing back on the idea. The AI kept pointing me back to the source material. By the end I was more convinced than I had planned to be, and I am still working out whether that says something good about the concept or something worrying about me.
A word about my own bias
I am a software developer. When I encountered a governance model built around forking, transparent rules, auditable logic, and the ability for a community to copy a working approach the same way you would clone a repository, something in my brain immediately said "yes, I understand this."
I then became suspicious of that feeling. Recognising a familiar pattern is not the same as knowing whether the pattern actually works well outside of code. I might be drawn to this idea partly for the wrong reasons, the same way a carpenter sees nails everywhere.
I am not fully sold on network states. But I found the concept genuinely interesting, surprisingly hard to dismiss, and worth thinking through in public. So that is what this post is: exploration, not endorsement.
What is a network state?
A network state is not a traditional country with fixed borders on a map. It is a community that starts online, organised around shared values or goals, and gradually builds real world presence. Think of it as a digital first group that can spin up physical locations — a neighbourhood, a collection of houses, a small town, or even floating communities — while remaining connected through the internet and transparent rules.
Rather than one giant centralised nation trying to serve everyone with the same rules, a network state works more like an archipelago: a scattered collection of nodes. Some might be in the UK, others in Portugal, Estonia, or elsewhere. The glue holding them together is not geography or coercion, but voluntary alignment and clear, auditable governance.
Why exit matters more than voice
Most of us are used to being stuck. You are born in a country, subject to its rules, and leaving is expensive, complicated, and disruptive. If your local council is incompetent or your national government passes policies you strongly disagree with, your realistic options are limited to voting every few years and complaining online.
Network states are built with easy exit designed in from the beginning. If a community starts moving in a direction you dislike, you or a group within it can fork. You copy the rules, take a fair share of any shared resources, and spin up your own version. This ability to leave or fork is one of the most powerful safeguards against a community becoming captured or coercive. It keeps incentives honest in a way that traditional electoral cycles rarely do.
This is meaningfully different from the top down "15 minute city" concepts that appeared during Covid. Those were imposed by existing authorities with little real opt out. Network states are opt in. You join because the values and rules match what you want. If they stop matching, leaving is built into the design.
How it works in practice
A network state usually begins as an online community aligned around specific principles — environmental living, technological freedom, strong family values, religious observance, or maximum personal liberty. Once the group reaches a certain size and seriousness, members start acquiring physical space. Governance is typically handled through a DAO, with transparent voting and spending rules (as discussed in the previous post). Because the nodes are scattered rather than one contiguous territory, ideological differences become easier to manage. Different groups can coexist geographically close but jurisdictionally separate.
There are real-world precedents, however early and imperfect. Próspera in Honduras is perhaps the most developed attempt at a special economic zone with this character — a privately governed community operating under its own charter within a host nation. Estonia's e-residency programme offers a different flavour: jurisdictional flexibility without physical relocation. Neither is a fully formed network state, but both demonstrate that the gap between theory and practice is narrower than it first appears.
The realistic challenges
This is not a utopia. Human nature does not disappear. There will be disagreements, difficult people, and failed experiments. Some network states will be poorly run and shrink. Others may start well and later drift. There are also difficult questions around land ownership, interaction with existing laws, and how to protect those who cannot easily exit.
Still, the model has a built in correction mechanism that most governments lack: competition and exit. Successful communities attract people and capital. Failing ones lose them. That pressure to deliver real results is powerful.
Why this idea stayed with me
The part that keeps me thinking is less about network states specifically and more about the underlying logic. We are very good at criticising what is broken with centralised systems. We are much less good at imagining alternatives that do not simply replace one central authority with another.
Network states, for all their flaws and early stage limitations, at least try to answer a different question: not "how do we reform the centre?" but "how do we build systems that do not need the centre to be competent or honest in order to function?"
Whether or not the network state is the right answer to that question — and I genuinely do not know yet — I think the question itself is worth taking seriously.
In the next post I want to explore what role AI might play in making these kinds of decentralised systems actually work — and whether it can address some of the weaknesses that have undermined earlier experiments in community governance.
Until then, the question I keep returning to is this: if the ability to fork a community is such a powerful safeguard against captured governance, why do we accept so little of that logic in the systems we already live under?