Episode 13: Jason Calacanis on Network School - The Network State Podcast

Jason Calacanis 0:00
Hey everybody, welcome back to the show. I am super excited because friend of the pod who, gosh, I don’t know when the last time we did a pod was couple years ago, couple years ago. Yeah, Balaji Srinivasan is here in Singapore, and I’m in Singapore. I’m a little bit jet lagged, but you’re a great podcast guest, because you got a lot of ideas. And so I got to go visit you in Malaysia, just north of Singapore, about 45 minutes, slightly West, slightly west of slightly west of Singapore. And you have started the network school, the network state, all the stuff you’ve been talking about for years, there’s now a there. There. Six months ago, you found a place where there are apartment buildings and space that is, I guess, relatively cheap and available, and you’ve got your fan base of tech bros from around the world and ladies joining you to build what? What is the vision here, for people who’ve heard of network state, network school and this sort of project you’re working on, which seems to be your life’s work, what exactly are you building?

Balaji Srinivasan 1:15
So network school is the first node of a network society, where it served several purposes. But, you know, the United States was started actually, not just with the Massachusetts Bay Colony, but with Harvard. It was like, literally a single room schoolhouse when it started right. And the Midwest, the land grant colleges like, you know, Texas A and M was like agricultural and mechanical, and so that was meant to build up the Midwest like so you had a college and a town, kind of, you know, side by side, you train the engineers and the humanists to help build the society. And, of course, the Bay Area, Stanford and Berkeley helped build Silicon Valley, right? So those are three examples in the American context, where a university and a town and a society, kind of, all, you know, went together, right? And so that’s what we’re doing. We are building a society ourselves. We’re building a startup society that’s also a template for other startup societies. And the way I think about it is, this is the third type of thing, internet company, internet currency, and now internet community. If you go to like ns.com, that’s you can see what we’re doing. If you go to ns, pretty good domain name, ns.com, ns.com, network state. So, right? So it’s network school, but it also stands, of course, for network state and network states plural, right? And that’s important. So we have, if you go to ns.com Dashboard right front slash dashboard, you’ll see more than 100 startup societies around the world. And the reason for this is we have these online communities people send if you’re watching this, you’re watching this, you’re spending a lot of time online, right? Like you’re you’re definition, by definition, that’s right. And so all our transactions are online, all our communications are online, but many of our friends are online, and we don’t see them in person, but we’d like to do that, right? So bringing those online communities together in person actually has a physical network effect. I mean, da, yes, but also not da, right? So we’ve unbundled the world onto the internet, and everybody’s alone at home. Now we re bundle the world into the physical world. And when you do this, suddenly, you actually solve a lot of problems. You actually you reinvigorate democracy, because when people vote with their feet and move to a location. Now look at, for example, starbase, right? Starbase, Texas, which just incorporated Elon’s new thing, right? Yeah,

Jason Calacanis 3:20
where star base is located, decided to take that town and rename it Starbase. And the people who are engineers at SpaceX voted, as well as some of the locals, to create a new city or town,

Balaji Srinivasan 3:33
new city or town, and they won 97% of the vote, right? 97.7% okay. And there was like 212 to six, or something like that, right? And the thing about this is that is actually reinvigorating democracy. It’s Internet Democracy, because you’re voting with your feet to move to Starbase. You’re voting with your wallet to help build up this community, and then you’re voting with your ballot to ratify what you just did. You’re combining all three. You have skin in the game because you actually move physically. You’re putting capital in, and then, as a consequence, that you’re also voting to build something. And so it’s something where you have a lot of alignment in the community, right? And that aspect of the frontier and the physical world, obviously, that built America, right? A big part of what built America is you had all these people from the old world who came out. And actually there’s a, you know, in the mid 1800s people would just if they didn’t like it on the East Coast. Like it on the East Coast, they would go further in, and they just build their own society, right? And even the earliest Americas Americans, those were, you know, the European colonists, and they set up the Massachusetts Bay Colony, the Virginia colony. The whole point was that you had a new jurisdiction to do things. Now, of course, people say, Oh, the Native Americans were there. That’s true, but in many ways, they were warlike, and so these new tribes came in. So you had n Native American tribes. Now you have n plus 1n, plus 2n, plus three. They all slugged it out. And actually, the Native Americans were like brave warriors that lost battles. But you know, for example, in Mongolia, they make statues to Genghis Khan and so and they should make statues to Sitting Bull. And all of these, you know, kinds of borders, but leaving that aside, that’s actually like a war that was lost, a war that was won, that just happens all around the world. Nobody has controlled any territory forever, and so ideally, though, you want to be able to do that today without any wars, without any conflict, right? How do you do without any conflict? Because everybody thinks all the land is taken, but it’s actually not. There’s all kinds, there’s

Jason Calacanis 5:19
all kinds of spaces around the world. And when people see cheap space, plus their nomads and their digital nomads, they have a high salary, a low cost of living, which means more opportunity. And if you put like minded people together now you’ve got a bunch of people who are not under economic pressure to live in the Bay Area, which we both saw, what that did to people. It made people miserable, yes, and their entire lives were filled with this anxiety of not being able to keep up with other people. And even the people who were supposedly keeping up felt like they were under massive pressure, yes, to spend $100,000 a month on a crazy lifestyle, and all the venture money that we were deploying into companies was going to $4,000 a month in rent for a developer to have a one or two bedroom. Yes. It was insane, yes. And what I saw when I came to who, you know, the the network state, network school, network school, this is the network school. Yes, in the network school, you have these buildings that were built and not being utilized. And there’s a whole backstory there, but it’s not important. She found this incredible opportunity, and people can go live there for $1,500 a month, all in all, in food, gym, exercise and their apartment, and then be part of a community. Yeah. So, as Paul Graham would talk about that whole like ramen break even, you know, ramen funded. It actually exists here. And there were 150 people there, all grinding on a Saturday. And so these people are coming from 100 different countries to hang out with each other and go to talks, to learn, to build what is their motivation? Because I understand your motivation. You think there’s a new mode of society, a new mode of governance. We have other people in our industry who believe in this. Peter Thiel has done seasteading. Obviously. Elon is doing this town in Texas, and people move to Texas because there’s less regulation. So I understand your motivation and other people’s motivation create new societies, higher function, but the individuals coming Great question get me into their mindset. So

Balaji Srinivasan 7:20
several different think of this as kind of like early cryptocurrency had various different kinds of people that all came together, yeah? And there’s a whack pack of people, yeah, a lot of different people there. There were people, well, yes, but, but successful, Libertarian, Libertarian, Nicole anarchist, exactly, that’s right. So some people were ideological, right? Some people just ran it for the tech, right? Some people thought, Okay, this could be very valuable someday, right? Business Opportunity, that’s right. And, you know, there’s a mix of different types of things, right? Some people came just because it’s cool, right? Yeah, weird, weird, cool, et cetera, right? And so today, for example, at network school, what kinds of people do we have? So we have those people first, you know, like, maybe the number one demographic are those folks who are remote workers and who often can’t get a visa into the West. So these are people can’t or won’t, don’t want to go, right? They think it’s over and so on and so forth. But they’re, they’re internet first, people, right? So that’s how I’d express our ideology, internet first. So obviously, I’m friendly to, you know, people in the US, and I’m friendly to many people who are conservatives and so on and so forth. But America is only 4% of the world, and red America is only 2% of the world, right? But if you say internet first, you include many of those people, and you also say, Hey, if you’re Canadian, Australian, you know, from New Zealand, UK, that’s this term, kansuk. If you’re Indian, if you’re European, Japanese or American, the internet is where you’re all equal. All nodes are equal in the internet. You can have the same monetary policy. You can have the same contract law, smart contract law, you can have the same transaction certification. Basically what the blockchain represents is not rule of law, which is breaking down in some ways with Delaware and all the crazy things in the US, but it’s rule of code, so everybody’s a peer here, right? So, you know, the thing is, a lot of the sort of progressive values of, you know, equality, democracy, science, media, I actually believe in those things, just on the recent corrupted versions got it. So the people who are coming, their motivation is to be around like minded people, like minded people, that’s right. And they want to build companies or build a life. So Right? So meet people, find a mate. What’s the motivation when you talk to them? Because it’s only been six months, yes, but you’ve got hundreds of people, and yet 1000s apply. So yes, it struck a nerve. It struck a nerve. That’s right. So I think this is something where people want to build communities in the physical world. We spent so much time online, we want to build build things offline, right? So some of them are coming because they’re remote workers and they’re tired of being by themselves. They want to be with the

Jason Calacanis 9:52
community. Got it so it’s alone or with people who are also remote workers. And we’ve seen that this nomadic lifestyle there was like. Of kind of different Airbnb type startups and office sharing startups that try to organize these people, but you’ve got such a big profile socially and with the crypto community that you can kind of be a beacon or a

Balaji Srinivasan 10:10
lighthouse testing, and I’m just a shilling point. Yeah, you know the purpose is, crucially to this is just like the first one of these. And I fund vegan ones, and I fund carnivore ones, I find Hindu, you know, sharp societies, and Christian ones and Jewish ones, all these different kinds. There’s, there’s some in Brazil, there’s some in, you know, Honduras, there’s some in Switzerland. And so it’s all different kinds of sharp societies. That’s, quote, true diversity, right? Many different kinds of things. There’s like Sanskrit immersion, Latin immersion, many different kinds of sharp societies. Have a different thesis on what would be a cool kind of community to build, and you’ll see whether they work. It’s, again, just like a tech company, you know, if we thought about early X or early Twitter, it seemed like the silliest thing in the world. Why would anybody want to treat their breakfast, but it became really important, right? And so in the same way, there’s many different concepts of what a startup society is, okay? So just to answer your question, also, again, a, remote workers. B, people who can’t get visas to us. C, a lot of people who ideologically want to build start societies, just like they wanted to

Jason Calacanis 11:05
build cryptocurrencies. Ah, that’s very meta. Yes. So they’re looking at this vision and saying, the society I’m in is not fulfilling to me. It feels broken in some way. It feels sub optimal. And this seems exciting, yes. And this is why, maybe the press, when they look at you as an individual and crypto, they kind of look at it and like these people are crazy internet people who don’t want to pay taxes, they want to, like, skirt governments and create their own world, and they’re kind of leaving the real world. It’s not that. It’s their builders who want to build something that fits their sensibility,

Balaji Srinivasan 11:42
that’s right. And thing is, everybody here pays taxes, everybody here obeys regulations and so on. And same thing like, when I CTO of Coinbase, I built a genomic sub and so and so forth. We dot every I and cross every T, right? So we make sure to be, you know, like render under Caesar, go to Caesars and so on and so forth, right? But many, many countries actually want these kinds of people there? Yes, desperately, desperately, right? Because most countries aren’t rich countries. Most countries are small countries. In fact, most countries have actually less than 10 million people. And so if a network school node or startup society node is open, there suddenly all this talent and capital from around the world floods in. All people want to do is be able to, like, drink coffee, hit keys on their laptop, build cool stuff, right? Yeah, work out, work out, dinner, yeah, exactly, like, have a life. Exactly. It’s really not that hard, you know. And this is a crucial thing. You don’t just need tax breaks. You don’t need subsidization. People are happy to pay, in a sense, a subscription fee to a society where they, you know, the roads work, the traffic lights are on, and so and so forth. That’s fine. What they just don’t want is to be like attacked for being a tech worker or technologist. And one thing also, I do think is going to be so I mentioned the remote workers visas, the the network Staters, like ideological network status. You know, then there’s also people, some who want to join a startup societies, and others who want to join with the intent of eventually building one. Eventually building one. Right? So early Coinbase, for example, has a Coinbase diaspora of all these people who’ve created lots of crypto companies. So many of the people at network school are learning the template that we’re building. And for example, there’s small things. It’s actually it’s surprisingly hard to get to San Francisco quality coffee. It’s not that hard, but it’s like, harder than you would think, right? Yes, and other kinds of things, like parts of what we call the daily loop, like, you know. So for example, you wake up, workout coffee, you know, office pod, conference room and so and so forth. Once you actually start calculating that out and minimizing all of the transit times, it’s like, almost like a factory like thing, right? So then you can rack and stack more office pods, more coffee stations as a function of demand and so so you can just save people so much time, whereas normally, if they’re in a big city, they’re like, Oh, my gym is like, 30 minutes across from me, and that’s like a huge tax on you every single day and so on. So you can start optimizing daily life that gives them more time to just learn or sit on the beach or what have you, right, which is

Jason Calacanis 14:04
kind of like if you think about what we do when we build products or services in technology, at our best, we’re removing friction, delighting customers and lowering the cost of it. Yes, and if you what I saw today was a bunch of people who are really happy and who are around like minded people and who feel like they have a stake in it, which is also super interesting, because you look at what happened in America over our lifetime, the last 40 or 50 years, people feel disconnected from it. They feel like they have no agency, right? They feel like they’re like victims in the machine, or cogs in the wheel, some something more dystopian, and they feel like the government doesn’t represent them. But what I saw was a lot of agency like you guys built a gym, and you guys are building the schedule, and you have speakers. So, you know, I think it’s pretty easy to be cynical when people look at and I was watching some of the press coverage of I guess there was somebody also doing this in middle of America. They bought a lodge somewhere in Wyoming. Yeah, and your name was mentioned over and over again that they were, like, inspired by you. Do you know who I’m talking about? There’s some articles and stuff. There’s actually somebody who was, like, a Berkeley guy who left Wyoming thing, the Wyoming thing, because they’re into daos or whatever, that’s good. And I was like, I don’t understand why they’re so upset. And these are like, woke people from like, Wired magazine or whoever, who are criticizing this, or, I don’t know if they’re being sensationalistic, but there seemed to be some animosity towards people saying, I would like to build my own

Balaji Srinivasan 15:29
society. I can put, I can put it in one sentence, please. Yeah. They don’t want us to have self determination. Ah, right. Fundamentally, they basically have replaced God with God. They worship these failing western states, and they are, in a sense, imperialist, where they want them to have bureaucratic power over the entire world and everybody in it, right? And so because of that, if you say, thank you very much, you guys do your thing. But we want to do our own thing, right? We want to basically say, hey, we want to have our own society, and we want to be able to determine our own rules, and we want to be able to live together, and so and so, even, by the way, if you’re just co living, forget, even, you know, there’s different stages. By the way, there’s like CO living, then you might negotiate a special economic zone. And then, all you know, eventually, eventually, eventually, maybe you’ve got, you can get an island, get sovereignty, or what have you, okay,

Jason Calacanis 16:25
but that’s the last time. Did that ever happen, that a an actual government, new country was formed in the world on planet Earth?

Balaji Srinivasan 16:32
Yeah, last time, yeah. Oh, well, let me show you something, right? So, actually, there’s so because I understand you’re making these, like, communes, kibbutzes, I don’t you know, little societies, pods, however you would describe what you’re doing in this nascent state. But the idea of like going and finding an island and saying, Hey, we have sovereignty. Nobody can tax us. Yeah, take a look, ready? Nobody before I show you this graph, right? What is your mental model of how many like going back, let’s say to 80 years, right? What’s your mental model of how many new countries were formed?

Jason Calacanis 17:05
Wow. I’m trying to think of like countries that seceded from their mothership would be the primary source of that. I’m thinking of all the colonies of the British Empire would be the first group, just logically, or other countries in the Middle East, like, I don’t know, Qatar, and those kind of countries were part of UAE, and they were forming and unforming. Here’s a graph. So you tell me, okay, there it is. So forexed, it’s 4x since the Yeah, since 50 to 200 Yes. And the thing is, I can show you this graph. Well, those are UN member countries, so they were accepted to the UN but they maybe existed as countries.

Balaji Srinivasan 17:42
Well, no, I mean, this thing is, if you define what is a country, that’s actually an important if you define a country as a UN member, the first thing, most people are surprised, it’s almost 4x over 80 years, right? The second thing is, exactly as you point out, the British Empire, the French Empire, and then over here, this big bump is the Soviet Empire breaking down. Oh, right. And new countries arise, right? Sure. Now there’s two important features of this. First, if you go backwards in time, this is actually the most centralized the world has ever been. When you go backwards time, I’ll show you some graph the number of, you know, independent jurisdictions in like Germany, India, it just rises rapidly like this. You have 1000s and 1000s of little like, you know what? San Marino is here, being there? No, okay, it’s like a little state lit. Let me show you something. So San Marino in Italy, right? Is like this, this tiny, tiny thing. It’s a micro state that is, like a piece of the past that still sits in the present. It’s like, it’s like a little city there, but its own sovereign country, okay, wow. Yeah, it’s a UN member, right? And the thing about that is, garibaldi, when he was unifying Italy, San Marino gave him refuge. So he didn’t unify. He let it keep its sovereignty. Okay? So that’s like a duck billed platypus, like this evolutionary missing link, and it tells you, oh, all the things we think of as countries like Italy, France, you know, China, India, they’re roll ups, yes, of lots of smaller city state ish, like things that used to exist. That’s what the world used to be. Used to be, like, fragmented like that. And it got rolled up into these big things for the purpose of conscription and taxation, because you basically build these giant, you know, nation states which have as many people as you can pack in there, like the Soviet Union and so on, and they all didn’t fight each other, and that’s the century of giant wars and conflict and whatever, right? I’m not saying everything about that was bad, but a lot of it was bad, right? Okay, so now we’re going, in a sense, back to the future where, just like we went from gold to fiat to digital gold, right? We’re going from city state, nation state, network state. Got it. I’m not saying everything goes to network states, but I think that will arise. And the big difference and the big difference is network states are decentralized, so they’re everywhere and nowhere. So CC is only in one place, but network state is decentralized. Just like Bitcoin is decentralized. You got nodes

Jason Calacanis 19:52
everywhere, and you unify them as an archipelago. Got it. So there’ll be these little outposts in different countries of network Staters, people who believe in the network state concept. That you’ve created, and then if any one of the nodes goes offline, like when China was like, yeah, no more Bitcoin, or Korea had no cryptocurrency for a bit, I think then they relented. The distributed network heals, because people could just leave, that’s okay, and go to another place. And this seems to be sort of interested on your take on this, even in the United States, where you think moving from one state to another would be your right and would be a great choice for a human being to make, like, maybe I like the weather or the people or the culture, yeah, more in a different state, or I just want to change a pace. I’ve lived in three different states and four different major cities in my life, and I it’s one of the great joys of my life, is to discover those new ones. But I’ve never had as much vitriol or questioning of my decision to go to Texas, from California, from California. It seems like there’s a group of people who are like, you’re doing this for nefarious reasons and and then even deciding to live on a horse ranch, as opposed to living living in the city. Was also, like, people were a little critical. Like, why are you doing that? Like, well, I can have my cake and eat it too, right? Can go to California and New York anytime I want. And then Keith rabois was also derided for going for the sin of going to Miami. You

Balaji Srinivasan 21:16
know why? I’d argue by it’s because California has been under one party, Democrat control since 2011 Oh, 2011 so you California is not a democracy. No Right. And that’s actually why all of the stealing for the NGOs, for the homeless encampments, the homeless industrial complex, has been out of control, because they destroyed democracy in California. There’s no democratic accountability for the Democrat Party, basically looting the conference there. That’s how I’d put it. And so because that, the only true vote against that is to leave, which is why I left, which is why he left, that’s right. And so that’s why Elon left, right? He couldn’t even build a sign in San Francisco, right? And there’s, like, some signs of life, or what have you. I know some people. I don’t think it’s falling into the Pacific, but I do think it is in a very it’s a downward, it’s a spiral. It’s, yeah, I think, I think it is, at a minimum, it has lost a lot relative to what it could have been. It’s a doom loop. And I consider it a doom loop. And I consider Austin, what you’re doing here, what I’m seeing in Dubai and the Middle East, Abu Dhabi, this kind of like a boom spiral. I think that’s right, where it’s kind of working its way up. That’s right. Energy seems to be people who are interested in it. So, we know that those people feel like they’re losing control, and they also feel like they’re losing high earners who are creators, and they think this is, like a very pernicious thing, because they think of you as a slave, right? Like, basically, but I’m a creator and capital ally. I know. I know, but they want you see everything. Every communist state was like this, North Korea, East Germany, the Soviet Union, Cuba, and actually also Nazi Germany. They all didn’t want people to leave. They put exit taxes or they shot people for leaving. They built the Berlin wall because their citizens were basically slaves. That’s what communism is. It’s slavery, right? It means 100% Taxation is SLAVERY, right? You get there by being so far left for the workers paradise that all the workers are in gulags, right? So they don’t want you to leave, because they basically want you to just work for them, right, right? And so exercise, I mean, the thing is, one thing that’s good, though, is the right to exit is actually a fundamental right. It’s in like, the UN Charter of Human Rights, right. In a sense, the right to exit is the thing that distinguishes, quote, leadership from dictatorship, right? The leader lets you leave, right, right? That is, if people can’t distinguish the two, the difference is, dictator doesn’t it’s a prison state, right? But leadership is you voluntarily opted in to be there, and you can voluntarily opt to leave, right?

Jason Calacanis 23:32
And they have to earn you being a citizen, that’s right, and they’re of service to you, which is how it didn’t feel for a lot of us in California, New York, and that’s when this great migration happened. People felt like, well, why am I buying into this society which feels dangerous and deranged at times, and I could go somewhere where it’s more constructive or more in line with my ideals.

Balaji Srinivasan 23:55
This is right, and this is also actually the counter argument when people are like, Oh, Elon, it’s techno monarchy. It’s not techno monarchy. It’s actually techno democracy. Why every single person who’s gone to Starbase chose to be there? Yeah, any person there can leave,

Jason Calacanis 24:08
they opted in with their presence. And I think that’s like, actually, if you think about voting yes, your vote doesn’t matter in California, New York, when to a certain extent, but voting where you live, that is the ultimate vote. I believe

Balaji Srinivasan 24:21
yes. And actually, this is a important paradigm shift, because essentially, what is democracy, it’s the consent of the governed, right? And, I mean, that’s, you know, like the Protestant Reformation, they took away all the Catholics, you know, the nothing against Catholics, okay? But like the Catholic church, the pope, all this stuff isn’t in the Bible, right? That’s like super structure that was added later. Fine, there’s all these precedents, whatever, but the process, but the Protestant Reformation said, Let’s clear away all that and talk about the root. Go to the radical. That’s what radical means. Go to the root and say, you know the direct relationship with Jesus, and you know, so the essence of it, sorry, so if you go to the root of democracy, it’s the consent of the government. And the problem with 51% democracy is that 49% have not given their consent. To the current, you know, rulers, right? So, and that’s what you keep getting. Get a 49% 50% this back and forth, and the guys who win by 50% try to govern like they’ve got a 99% majority, and that produces backlash, and we’ve seen that back and forth, right? And then the elections become more and more hard fought, and that 2% flips the other way, and then you get a huge seesaw this way. The alternative to that, to the two party system, is the 1000 city system,

Jason Calacanis 25:21
migrate to the one that fits you best, and have consensus in that society that 8090, 97% in the case of star base, agree that rocket ships going to Mars, and the noise pollution caused by them is not pollution. It’s joy, that’s right. And every time we hear that noise, we are excited and thrilled. Yes, have progress, whereas another person might consider that noise absolutely why they didn’t move to that area. They wanted quiet.

Balaji Srinivasan 25:48
And here’s the thing is, let’s say that you take that as an important cost, right? Because the frontier is a filter, right? The frontier filters for a certain kind of person who’s willing to take some pain for some gain. We see that all the time in startups. It’s not a big company employee, right? So take that example, Mars. Example of Mars. So let’s say you say, Okay, we want to get to Mars. We want to tell it the rocket launches. So everybody just has ear protection stuff at home. Sure. Fine. You can solve that. Maybe there’s better sound perfect at home. There’s ways you can solve that. When you set this as a goal of getting to the stars, then you can use technology to mitigate the downsides, right? And but it’s whether people have that can do attitude, they’re aligned on the goal, right? So my view is that the 1000 city system, as opposed to the two party system, is how you get genuine diversity. And actually, you know what? There’s already a prototype of this. We’ve actually been doing this for 20, 3040, years. You know why? So imagine if at age 18 or age 21 you picked your country like you pick your college, right? But that’s actually already the case for millions of people from Asia. Why Asia? India? At age 21 they would apply for their master’s degree at MIT or Stanford or what have you, and they would have the f1 student visa for college. They’d have the H 1b visa for their company, and then they’d get a green card or permanent residency, and then eventually citizenship at the country level. So college company country, where, like this, it was a labyrinth that an immigrant, tech immigrant, has stack. It’s a stack. Yes, right? So college company country, right? And the thing is, nobody has packaged that together. That’s one of the things we’re doing in network school. We want to, just like, you know, with cryptocurrency, part of the reason you bought cryptocurrency is to get more fiat currency, in the sense people would get BTC to get more USC, that was one important metric, right? Part of the reason to come to like a crypto society or a network society, is to improve your Fiat passport. So lots of people who come from countries, they’re meritorious, they’re smart, right? We can get them worker visas. We can get them maybe to buy golden visas, things like that. We can let them see the world, right? Because people don’t understand that. If they’re born without what people call passport privilege, they’re basically like in prison. They’re locked right? It’s very hard to see the world, to get to other countries. And so we can upgrade that. We can get them, you know, employment passes, and so on and so forth. And they’re hardworking, and they deserve all of that, right? And they’ll do a good job with that, right? You know, it’s,

Jason Calacanis 27:59
this is my first trip internationally. Well, first time in Singapore. Okay, what’d you think? I am really fascinated by places that are like startup cities, because this is a 60 year old city. They’re having their 60th anniversary in August. I found out, and I was like, this is one of the few times I’ve gone to a country that is younger than America. Usually when Americans go abroad, they’re going to a country that’s much older, typically. And you know, at the same experience when I go to the Middle East, which is, you know, by Dubai, like these are new cities that in 1950 were deserts, right? Yes. So it’s fascinating to see those countries and the enthusiasm that people have for them. And also, it was also a little bit sad for me, because as an American, as high profile American who has an opinion that sometimes people listen to, or at least they hear it, yeah, but they don’t have to agree with it. Sure, for sure. But, you know, there were a lot of people asking me to explain what’s going on in our country, and asking me to explain it, because they’re perplexed and saddened by how America is interacting with the rest of the world. Yes, so putting aside my belief system, just the candid feedback I got, I would say I’ve been heartbroken, crestfallen at how people were talking about America. And it’s the first time in my life I’ve ever had it. It’s like, it’s actually kind of heavy on my heart the last three days, because people were saying, what? Why don’t you wanting this stuff? Why are you doing this to us? Why can’t we come to the country? Why don’t you want us to come to America on vacation? I was talking to some folks who are extremely successful. These are the most the point, 1% of the 1% the 1% of the 1% or tell telling me, my kids can go anywhere and on vacation. They want to go to China because they believe it’s the future. They don’t want to go to America for college, and they don’t want to go to America because they feel like they might get harassed at the border. And then we want to do business with your country. And. We thought that the new administration would be embracing the rest of the world, getting rid of regulation, and that we’d have this great era of interoperability, and we’d have, like, an acceleration in business, and now you’re just rattling the cage constantly, and we want to do business, but you’re sending us to go do business in other places, and we can’t rely on you anymore. And that, actually, I think maybe, is the heart most heartbreaking thing is that they feel like we’re not a reliable partner. Is what they were telling me. This is not my position. This is the input from people in Singapore who I think represent a certain level of sophisticated, globalistic, world savvy people. And so maybe you tell me how, as an American, so you’re an American who lives abroad now, like you, what do you think of what’s happened, you know? And we can’t get away from policy. We can’t get away from Trump, because it’s, it’s defining a lot of what’s happening in the world right now. So tell me the perception and your perception.

Balaji Srinivasan 31:02
Here’s how I think about this. And I actually did shed a single manly tear, okay, when writing the network state book, yeah, because I had some of the same emotions on Yeah, that you’re talking about. And the way I look at it is Britain, America, the internet, okay, right? Britain was an amazing, amazing amazing thing, honestly, for the world the British Empire, a lot of people attack it, and it had a lot of faults, but it did on net advanced civilization, there was a lot of good things Britain did, but eventually, the British Empire, exhausted, handed the torch to America, and it’s no longer an empire. The British Empire is just a country UK. It’s just a country that’s right. And the start of the American empire was arguably 1939, there’s this great book called tomorrow the world, by Stephen Wertheim that actually documents that the fall of France was actually the moment. It wasn’t actually post world truths at the beginning, the fall of France was a moment that the Americans, at that point they were they had been happy to let the British do all the empireing and just build up their country. Yeah. But once they saw that the Nazis, or maybe the Soviets, could build an empire that was bigger than the British, they’re like, oh, we have to do this. So that moment was when America turned truly into a global empire, and they set out to be a global empire. That’s why there’s 750 military bases worldwide. That’s why the headquarters of the UN is in New York. That’s why, like, for example, Harvard, Kennedy School of Government alone. Government alone has 20 heads of state that were trained there. Right? That’s why the US has regulatory harmonization. All these countries around the world use us regulations. There’s like a Hungarian FDA. That’s why there’s us multinationals everywhere. And I could go on and on, right? The number of internet searches being done at Google. Google is the number one search engine in every country except for, like, Korea, China, Russia, yes, and maybe still Japan. And maybe it’s 5050, Japan. Now, yeah, I don’t know, but so I think it’s maybe four countries. It’s like four countries, that’s right. But here’s the thing, the issue with Empire, any empire, is you get this global footprint, but it also ends up sort of eating away the core of the empire, right? And it does so in two ways. The left is mad because they feel that your people are oppressing people around the world, which is sometimes true. And the right is mad because they feel that your people are bearing a burden of the rest of the world, which is also sometimes true. So eventually the left and right basically get tired of empire and shut it down, and then they often regret it, right? So that happened with the British Empire, that happened with the French Empire, and happened within our life and within our life and within with the Soviet empire. Everybody thought that the aftermath would be something great, and it was actually, it was, it was mixed, that, you know, Eastern Europe was free, and it did well, and so on. Estonia did well. Russia itself did very poorly for a long time, and then it’s like someone started to recover. But, you know, fine point being, we are in the last stages of American Empire. Okay? Because four forces, you know, the red America doesn’t is against the deep state. Blue America is against the Trump administration. Tech America is against the regulatory state, and China is against us hegemony. So all four of those vectors are pointed down. So nothing is keeping the current establishment up. Every day, there’s another hit to it going down. That’s never it’s like a solar eclipse. It’s never happened in our lifetime before, right? And you can’t cut off foreign trade and foreign travel and foreign tourism without also eventually cutting off foreign capital flows into the dollar, and then, without the reserve currency, American series of living will fall very rapidly. I don’t know how much? 50% 90% 99% but this is similar to happened after the fall of Soviet Union. The ruble hyperinflated. Now one thing we’re actually in the middle of something. Have you ever you know being in a Tesla is actually very noticeable acceleration. Have you ever been in a bullet train? Yeah. So if you’re in a bullet train, it can accelerate in such a seamless way that you don’t even realize how fast you’re going. Right, right? So do you know how much the US dollar is devalued against Bitcoin since inception? 100,000,000x because Bitcoin started at point one cent. Yeah. Actually, you wrote, honestly, one of the best early articles on Bitcoin, yeah, where, actually there are a lot of things that that were it was, I said it’s

Jason Calacanis 34:57
the most dangerous open source project I’ve ever seen, because it could. Destabilize the entire world, because the sovereignty of countries is, you know, military and their currency, and this could change history forever. Yeah, I was, I was shook when it was at 12

Balaji Srinivasan 35:13
cents. So the thing is that as soon as Bitcoin appeared, capital started flowing into it, yeah, and it’s gone up 100,000,000x against $1 and there’s only like another 10x to go, or 100x but that last 10x will be felt in a different way. See, the thing is, at $100,000 per Bitcoin, everybody’s happy, but a million dollars for Bitcoin people understand, like, Empire is over. There’s something about that as, like a round number, and some sort of people like, Wait a second. And one way thinking about it is, like normal inflation is supposed to be, like, two supposed to be like 2% a year. That works out to like, point 2% a month. It’s an arbitrary figure. It comes from New Zealand. It should really be 0% but let’s say, okay, Hyperinflation is 50% a month, right? So point 2% a month, normal inflation, hyperinflation 50% a month. What if we define super inflation as 5% a month, right? If you work it out, the compounded rate at which the dollar has been devaluing against bitcoin is like 10.41% a month for 16 years. Okay, so we’re actually already in the middle of the global run on the dollar. It’s like that bullet train that’s been accelerating without people seeing it. That like the alternatives already here, and you’re seeing Blackrock saying bitcoin is an alternative to the dollar, right? The dollar, right? The other alternative, by the way, is gold, physical gold, that’s also at all time highs. So gold and digital gold are the things that will be obvious warning symbols in retrospect that this order is changing, right? And so then what comes on their side? Right? My view is that the future is China versus the internet, and the heirs to American empire. China has the military and the manufacturing, and it’s, it’s like, it’s one of these things where, you know, guys like Peter zeihan will say, Oh, China’s gonna fall into a ditch. It’s gonna get old before it gets rich. The US can blockade China, etc, etc, etc. And in actuality, a lot of those things are happening in reverse. For example, China’s blockading the US China’s proxy, Iran has its proxy, the Houthis. That’s blockading Suez, right? And in many ways, US demographics are worse than Chinese demographics. Why? Because you’ve got this polarized society of everybody fighting each other. You have all of this ethnic conflict. You have young minorities expected to pay for old people’s social security and on and on. US, you have men and women hating each other and whatnot, right? So us demographers a cauldron of ethnic, gender, political, economic conflict and resentments waiting to bubble over, right? China, for its faults, has like homogeneous society, right? And so the problem is, China’s very strong, right? I think of the people who downplay China as the stealth on the Chinese stealth bomber, right? They’re not doing anybody any favors. China is extremely strong, and it’s very competent, and if we can’t build an alternative, then it will just be dominant.

Jason Calacanis 37:48
You believe the what Trump is doing in terms of shutting the borders and changing this sort of tariff regime is an isolation and isolation and then getting rid of immigration largely. This is a very dangerous

Balaji Srinivasan 38:03
strategy. It’s a very dangerous strategy. It’s not this time, well, it’s like, not, it’s not even like, it’s like, you know, the thing like a nice strategy, cod and let’s see if it works for them, right? Just take the tariff thing alone. Okay, those were simultaneous tariffs on the entire world, right? So, Vietnam got hit. Cambodia got hit. All the rays. Go ahead, they’re strays. They’re straight stray bullets, exactly like, I analogize it to, like, firing into a crowd to like, get China, right? Everybody who got hit by the stray is not going to care that you were trying to get China. They’re going to care how careless and random you are with the lives of all these people. And just to talk about the tariffs for a second, first, everybody who is pro American in all these countries, they’re the ones with American customers, with American vendors, American suppliers. All those people who were the political faction of those countries that pushed for good relations with America, that pushed to travel to America, to trade America, all those people just got discredited, right? They just got economically harmed. They got absolutely nuked because they trusted in the stability of the United States of America. They trust in the stability of the trade system. They trust in predictability. Yeah, exactly. That’s right. And when you add it up, it’s basically the US no longer wants to be the hub of this global financial empire. They don’t want the foreign workers. They don’t want the foreign trade. There’s a faction of Maga that is incorrect, in their own way, as economically irrational as a far left that actually thinks that 77 million Maga can compete with 1.4 billion China, let alone the entire world? It’s simply not true.

Jason Calacanis 39:27
Well, no, I was gonna say the idea that Americans wanna rush in and make iPhones in a factory is like, so farcical. It’s not that iPhones can’t be made anymore. They could. When you

Balaji Srinivasan 39:36
bring this up on X, people will say they’ll get really mad, and then they’ll say, Well, I want someone else to be able to work in a factory, right, right? But

Jason Calacanis 39:44
you can’t find anybody in your family who said, wow, wouldn’t it be great if I could do that. Now listen, we do make Teslas in factories in America. It can be done. We’re making rockets in America. It’s not the question of if we can make them there. But if we’re going to close the border and we have 4% unemployment, who’s going to work in. Factory,

Balaji Srinivasan 40:00
yes, but let me give. Let me give, also the steel man case for Maga, because I understand where their worldview comes from. So first is they would say, okay, sure, maybe I as a white collar worker, whatever, don’t work in a factory. That they would say that, but it’s way better the blue collar worker has opportunity to work in a factory than dying of fentanyl or whatever. True. Okay, okay. Number two, they’d say factory work produces skills and stuff that, you know, there’s all kinds of mechanical maintenance and whatnot, which you don’t want to over offshore and center seize. I’d agree with that as well. Third, they’d say, as red American, they’ve gotten a hard time from Blue Americans. Red America has been sent overseas to die and so and so forth. Blue Americans have exploited them. There’s some truth to that as well. Okay, I could go and I could say quite a few things. Another thing they’d say is, we’re running these trade down. These trade deficits for so long. We can’t run them endlessly, and we need to be able to make things at home. We’ll be too dependent on others. We’re too dependent on China, too bad on the rest of the world. There’s some truth to that as well. Okay, but what they get wrong is a they’re in a huge hole, and they think that they can just get out with some sudden move right? You cannot get out of 45 years of de industrialization with 45% tariffs. There’s no overnight fix for this. Right? Two maybe yes, blue America and red America have been fighting. That doesn’t mean Vietnam is the enemy of red America. It also doesn’t mean like Canadian conservatives are the enemy of red America. What they managed to do by threatening to invade Greenland and Canada and doing these tariffs and so on. It’s just like the wokes built the anti woke coalition. The Magus have built the post American Coalition, even Canadian conservatives who are their natural allies. If Canadian conservatives like Pierre Polaris and so on, are getting crapped on, right? And do you see the graph of the Canadian conservatives?

Jason Calacanis 41:38
Yeah. So basically, if we are this unpredictable to the rest of the world. The world will look for more predictable partners to partner with, and it’s happening as we speak. We’re five months into this presidency, and already you have China, Singapore, Russia, India, and everybody in between going well if we can’t figure out how to work with the Trump administration. If we can’t figure out how to work with America, I guess we should just work with each other. And yes, that’s a very dangerous place to be. Like, perhaps we’re overplaying our hand. And absolutely how important we are to China, how important we are to India, like, how important are we? Do they have other customers? I think they have a lot

Balaji Srinivasan 42:20
of other customers. And in fact, look in 2015 China was taken aback by the trade war, but over the last 10 years, they’re now prepared for it, and like a lot of Trump tactics, don’t work anymore. They’re not surprised anymore. It’s just the same kind of thing. And they reduced their share of revenue for the US. It’s only 15% 16% of Chinese trade goes to the US. 85% is overseas. They built up these other markets. So whereas the US needs, the parts are from China. Let me tell you a little story, right? So in the late 2000s around 2008 with the Beijing Olympics, you remember that, right? So there was pollution in Beijing. Now they’ve actually solved it, but there was heavy pollution. Yeah, the runners would not want to run a marathon there. Yeah, that’s right. So China basically went, they knew all the people who were polluting, and they went to them, like a few weeks before, and they told them to shut all their stuff down so they’d have clear skies for the Beijing Olympics. Okay, so I was operating the clinical lab at that time, and there was a global shortage of a specific kind of chemical precursor that was used in various biomedical reactions, and the price, like, skyrocketed, like 100x for that time, because one of those factories, like China was just the the scale supplier of, like, the whole world, single parent failure. Yeah, yeah. Now that meant, like, research, clinical testing and so on, ground to a halt for anything that used this compound, or you had huge spikes in costs just for a few weeks. Now, look, this wasn’t the end of the world, because it did resume, but a lot of people had lab test interruptions, research interruptions, and so on. And that was 20 years ago, and that gave me a sense of what China is, right? It is just upstream of the physical world, like the US military is made in China, like Tomahawk missiles. You know, there’s a report $400 million the Pentagon paid govini to go and study the US military supply chains, atomic up, missiles, J dams, the supplier, suppliers in China. Right? The former Secretary of the Navy, Carlos Del Toro 2023, he says the US Navy, one Chinese shipyard can build more ships than the entire US Navy combined.

Speaker 1 44:13
They have 13 shipyards. In some cases, their shipyard has more capacity. One shipyard has more capacity than all of our shipyards combined.

Balaji Srinivasan 44:21
You have HEG Seth recently on a podcast, Sean Ryan podcast, and he said Chinese hypersonics can sink every US aircraft

Speaker 2 44:27
carrier. Our whole power projection platform is aircraft carriers and the ability to project power that way strategically around the globe. And yeah, we have a nuclear triad and all of that, but a big part of it. And if you know, 15 hypersonic missiles can take out our 10 aircraft carriers in the first 20 minutes of a conflict.

Balaji Srinivasan 44:43
What does that look like? You have basically this US Navy chart that shows China’s 200x us shipping capacity. China now has, has world’s largest Navy, right? And people say, Oh, it doesn’t have the aircraft carriers yet. But that’s like saying Netflix has the number of ships, but it doesn’t have the tonnage. But these are semantic arguments. Arguments because. Like saying how many blockbuster stores does Netflix have? You know, their paradigm shifting. They’re going with standoff missiles and hypersonic anyway. The point is to the predictability part all these countries, it’s even worse than just trading with each other. They’re all re centering around China, because it’s a global hub for trade. China has ships in every port. It has relationships with every country. Every country needs Chinese goods, right? And so China just has more leverage. And people think that the US has leverage because it’s a consumer. But what’s it giving? It’s giving basically dollars. Why are dollars valuable? Now we have to ask deeper questions. The only reason the US can maintain its current level of consumption is that there was a global financial empire where the right built the US military and left did us diplomacy underappreciated by the right look, you and I, we’ve been on lots of capitals. We done lots of deals. Get imagine a capital with 196 people on it. That’s a huge pain. Yeah? Okay. Now imagine 196 countries and how it is to get them to sign on the line, which is dotted. That’s a huger pain, right? Yeah, a lot of work. And so things like the WTO or who US diplomats got 196 countries to sign on to this stuff. Yeah. Okay, they got 196 heads of state, 100 like all kinds of crazy standouts, holdouts. US diplomats were the best ever, and so was the US military the best ever. And because of this, the left and the right state and Pentagon worked together to build the greatest empire of all time, right? And is

Jason Calacanis 46:19
it just over now? I mean, it’s just overnight, it’s just over. Is your position or it’s, it’s

Balaji Srinivasan 46:23
ending, and people haven’t marked it to market. Basically, hard power is China, and hard money is, is Bitcoin, right? That’s, that’s the future political axis. CCP is total control. Bitcoin is total freedom, right? Now, total freedom can also be total anarchy, right? So I’m very sympathetic to Bitcoin. I’m certainly more on this side of things, but I think you want some balance between total control and total anarchy, right? And that’s where network states, that’s where Dubai, that’s where maybe India, that’s maybe Eastern Europe and other places will have to be. And so to your point about predictability, the problem is lots of countries are now thinking of China as a less unpredictable partner than the US, even after the Shanghai lockdowns of 2022 when China put the country, which is crazy, but it’s actually really bad.

Jason Calacanis 47:06
Well, a dictatorship that will put a million Uyghurs into a concentration camp, a dictatorship that will put their country under surveillance, that will take the entire sector of entrepreneurship and say, we own the companies now, and Jack Ma is going to go into RE education or oil painting classes like these two. That’s, yeah, that’s more reliable than the United States. Like, let that sink in, that people are making that choice.

Balaji Srinivasan 47:31
And the problem is that basically it’ll be, there’ll be the version 3.0 which, which is the v1 is so the instinctive conservative reaction, Chinese Communist Party and so on and so forth, right? The v2 there’s certain kind of sophisticated international commentator who will say something like this, and let me explain it, and then I’ll give a counter argument to what they’re saying. They’ll say, Well, the US blew up the Middle East and China’s building up Africa. The US gotten all these wars, killed these people, China hasn’t done that. The US wrecked its cities, and China’s built up its cities. Therefore China’s peaceful rise. China is good, right? Now, my counter argument to that accepting that some of that is true, that China did build itself up and so on and so forth. If you think about the US, it was generally the better actor of the US versus USSR. Up to 1991 like West Germany was better off than East Germany, South Korea is better off than North Korea. Capitalist countries wealthier, freer than communist countries, right? But after 1991 it became so powerful that it lost its way. Hyper power went to its head. You started blowing up these countries. It started basically like a like a really wealthy grandkid, or great grandkid, or interventionism for no reason. They put the fortune up their nose, right? Like there’s a saying, shirt sleeves to shirt sleeves. In three generations, being born really, really, really rich is actually sometimes a curse, because they don’t understand the value of hard work, right? So all these people inherited an empire that they could never build. And the last 30 years of management since 1991 has been some of the worst management, maybe, of any empire ever in history, right? Okay, problem is that on the current path, when China wins, right? Meaning, like the US has its sovereign debt crisis, because all these things on the tariff, whether they’re doing they’re reducing the demand for the dollar. The demand for the dollar is only thing that’s keeping the US economy afloat. Because, you know, the Fed’s plunge protection teams, don’t that is, yeah, it basically buys stocks with printed money, right? It’s upward redistribution of wealth, in a sense, right? This has been going on, at least since the 90s. You know, with the Fed’s mortgage backed securities, it’s admitted it’s buying assets with its own balance sheet many other times. It uses like Shell entities and so on to that. It spots people money and so on. But it props up the market with printing. Okay, when the and obviously, 2022 2021 with up until 2022 the post COVID market was propped up by printing. When there isn’t global demand for the dollar, when you have weak Treasury auctions, when people aren’t aren’t able to trade with us. Why would they want to hold us dollars anymore? Right? They can’t. Right? They can’t send their people in, they can’t send their workers in. They can’t they can’t even come there for tourism. Why they want to hold us dollars again? Especially can? They can be frozen with sanctions, especially when there’s Bitcoin and gold and so on. They won’t, right? So when that happens, you get a markdown, and China just rises into the vacuum. People don’t understand. Understand that it’s like number one in many research fields, right? It’s number one in many manufacturing fields. It’s way stronger than people think. And the problem is China will be even meaner than you think when it’s dominant. Right? Now, what constrains China? Internally, China is not constrained so it can throw all its people in lockdown for like Shanghai 2022 but externally, it still feared the US. And the US is almost the opposite. Internally, there was Republican Democrats who was somewhat constrained, but externally, is bombing all these countries because it didn’t feel constrained, right? This is absolute. Power corrupts absolutely. So we need a counterbalance to this completely unleashed China, and that is the internet, right? Because with the internet we can actually that’s the heir to American values, right? Of course, it’s it’s capitalism, it’s freedom, it’s a manifestation of democracy, but it’s also that it’s right, it’s the libertarian values and the progressive values, right, in the non corrupted form, right? So it’s freedom, it’s capitalism, it’s contracts, it’s cryptocurrency, but it’s also democracy, equality, media, science, in a real sense, I’m one of the biggest funders of those things in the world. For example, I fund all this decentralized science, right? I fund all these decentralized media, all these decentralized citizen journalists, things like provenance, you know, the who, what, when, where, why, how of a story like the where is proof of location, right? The who is proof of human right? And there’s all these decentralized ways of doing this, to get to truth, right, to get to media, to get to science, to get to equality, because that’s what crypto is. It’s an equal system for the whole world. Hernando de Soto has written about this, like all these people in Latin America artificially poor because they don’t have property rights. Now we can deliver that to them over the internet, right? And this is no longer theoretical. 10 years ago, talking about like crypto in poor countries was theoretical. Now it’s not. These people need crypto like in in Lebanon, in Nigeria, in like Venezuela, their phones are their lifelines. They are crypto first. They are internet first. People, and when I, when I’m talking to them, they it’s not theory that we’re talking about. It’s practice, right? Yeah, so internet first. I think that is the one thing that can build an economic union, that can balance China.

Jason Calacanis 51:54
Interesting, let me ask you, just as a total aside, it seems like the Bitcoin game that everybody’s buying into was based upon it not being centrally controlled. And now you have an actor who has 600,000 bitcoins out of the well, Michael seller, I think, has 600,000 now, something like that. So he’s the largest holder other than, I guess, the dead Satoshi wallet

Balaji Srinivasan 52:17
story. I’m friendly with all these guys. Sure. It’s not a

Jason Calacanis 52:21
character thing, as much as does it break the game that somebody wants to buy up that much of the supply of Bitcoin, and then, just as we wrap like, I think we all expected that maybe Bitcoin would be replaced or hacked. At some point it hasn’t been hacked. And, I mean, I guess you can make arguments about, you know, the, I guess, layer twos as Solanas, the ethereums, you know, serving a different purpose. But is Bitcoin here to stay? And does this consolidation of Bitcoin into a small number of holders

Balaji Srinivasan 52:52
jeopardize that good question. So how should how to think about this? First is, sounds like you’re thinking of how to be politically. No, no, is just like 10 different dimensions to it. So, well, let’s go right at the sale. Okay, so absolutely it. So, you know, I’m actually also like an advisor to one of these Bitcoin Treasury companies, like Komodo holdings just came out. Jack Mahlers has done 121, it’s funny, two of the names that I had, 21 and Nakamoto are both being used for these Bitcoin Treasury companies, right? So I think on balance, it’s good, but it has risks. Okay, unbalanced. Why is it good? Because it allows tradfi, all these other people who could not put capital into Bitcoin, to put capital into Bitcoin. And it boosts Bitcoin. It is quite possible, perhaps even likely, that at some point there will be an attempt for a seizure. Okay? Because Bitcoin at 100,000 again, everybody’s smiling. Bitcoin at a million, let alone 10 million. A lot of that is the flipping, right? Some are, you know, a long time ago, my friend Olaf and I calculated that somewhere between 100,000 and a million dollars for Bitcoin is the billionaire flipping. When most billionaires become crypto, there’s about 2000 gold billionaires. Somewhere around that range, there’s a flip. Most billionaires become crypto, right? And then, of course, a million dollars isn’t worth what it’s worth anymore. Faith in dollars eroded, and it could go very quickly from like, I don’t know, maybe it’s 300,000 to a million. There’ll be a point which there’s a loss of faith in the currency, and it just goes like this, okay, now at that moment, see, remember 2021 when Trump was not allowed to tweet, right after Jan six, right? You and I saw the emergence of social media. And in in the year, let’s say 2010, remember the social network movie came out? Yep, you know, it was absent from that movie completely, the winklevox. No, they were, they were in politics. Oh, yeah, right, that movie basically treated Facebook as like Universal Studios or like Disney. It was like, it was like a playground, right? It was impressive from a financial standpoint and a user base standpoint. There’s not a single mention of politics. No one understood what was to come, right? But over the 2010s all politics became social media, right? And if in 2010 I told you that in 2021 the President of the United States will be defined by whether or not he is able to tweet. Even, given that the Arab Spring and other stuff had happened, you just said, Balaji, you’re just exaggerating. Hearing social media just isn’t that important, right? It would have seemed surreal. Literally,

Jason Calacanis 55:04
he was silenced by a couple of four or five companies.

Balaji Srinivasan 55:07
Yeah. And now, if I tell you, de platformed, I don’t know the exact year, but by sometime, plus minus, maybe 2035, a country will not exist if it doesn’t have gold or digital gold, like it literally will be insolvent. Like, you’re not the president if you don’t have social media, you’re not a country if you don’t have cryptocurrency or maybe gold, right? I think physical gold is interesting because the complement to crypto, it has different failure modes. States will go with physical gold, and individuals and startups will go with digital gold. The reason is, physical gold requires trucks. It requires guys with guns. It requires, like, you know, facility, magnetometers and so on. So, like, something like China, like a state can protect that, because they’ve got little guys with guns around it, and they go and, you know, like the Korean Demilitarized Zone. You can imagine something like that between Russia and China, where they just hand each other gold bricks every day, or whatever, right to do settlement, right? So something like that could work between countries that, basically their embassies become places for gold settlement. I think that’s very possible, but that’s too much fixed cost for an individual, right, right? And also, gold bricks can be detected when you go through metal detectors. That may be the real purpose of TSA, actually, right? Okay, so point being, though to your point, it is possible that seizure orders do happen when Bitcoin gets to a certain level. Then what happens? All the Bitcoin that is not able to be seized. It’s free. Bitcoin is actually more valuable. Number one, number two is, I think that even in an economy which is Bitcoin maximalist, don’t, I don’t think I’m not a Bitcoin maximalist, but they don’t understand, or they don’t want to accept this point, that there will be other assets besides digital gold, right? Of course, yeah, because you’re, you know, the Bitcoin itself is like, it’s expensive to transact. When you’re transacting, it’ll be a small number of daily transactions. Relatively, it’s about the scale of Fed wire, by the way, fed wire about 500,000 daily transactions. Bitcoins, about the same high denomination transactions that are infrequent. That’s what Bitcoin is. Everything else will go to Ethereum, Solana, you know, like privacy coins and so on and so forth, right? And and other chains like this, because you just want to have all that traffic on just one chain. So already you have, you know, for example, USDC, usdt on other chains. You have smart contracts under chains. You have privacy under chains, because Bitcoin is immutable and these other things aren’t. Now, what are the risks to Bitcoin? One is seizure. Two is quantum, right? Yeah, we definitely need quantum resistant Bitcoin. And

Jason Calacanis 57:28
that’s not farcical, that’s not far school. No, completely will happen. It’s a probable and it’s possible in the short term, and it’s probable in the long

Balaji Srinivasan 57:39
term. Yes. The main issue with quantum is not that there isn’t a solution on the radar for Bitcoin, because with quantum decryption, you can also have quantum encryption. Sure. The key question is, is quantum decryption something where we can put a quantum safe algorithm in place and time? And people think we can? The hard part is, moving every coin from the old address to the new quantum CF address could take almost a year. So a lot of old coins could get rated in that time, right? So then there’s various

Jason Calacanis 58:05
wild to think about that you might even be better off just starting a new product.

Balaji Srinivasan 58:11
There might be a qbtc or something like that, right? But in a sense, even if bitcoin only achieves its objective. Now, one thing you get, by the way, is what’s called Social reset, right? Social reset could be something where the community just agrees between themselves that we’re just gonna snapshot the chain at this point in time and move it over to this new chain. Wild. Okay, so that is a non technical, but social kind of thing, which I think is absolutely gonna happen at some point. Wow, right? Because Bitcoin is, there’s more Bitcoiners than there are Americans, right? More, many hundreds of millions worldwide, right? And importantly, Bitcoin appeals to a lot of people in China. Why? Because money the party can’t seize, yeah. So even as American culture, unfortunately, is becoming less appealing to people in China, internet culture is still valuable, right? They still need the free internet. They still want GitHub, right? They still want Bitcoin. They still want these things. Hundreds of millions of people in China still like these things, right? That’s what I call the Chinese capitalist party, right? So, you know, as sad as it is to see America lose its soft power, the internet still has and it’s still rising, right? So to your point, I think we’re gonna see all kinds of crazy drama. Remember, with social media, all the edge cases that people talked about, actually, you remember in the late 2000s when people talked about de platforming? It was corporate de platforming. Yep. It was like, gosh, it was a company with a Zynga they got, you know, Mark Minkus company, yeah, shooter, yeah, or Meerkat pushed off at Twitter, right? So that was corporate de platforming. Then there was ideological de platforming. But every possible abuse of social media censorship, this and the other happened, and in the years to come, every possible crazy attack on crypto is going to happen. But because there’s so many coins, it’ll be very difficult to take the currency of the people, by the people, for the people from this earth

Jason Calacanis 59:54
on that note. Gosh, congratulations on taking a lot of theories and making them in. To reality. You’re six months into this journey, but it’s clear you struck a nerve, and I think that you’re doing important work as a backstop against, you know, people being cynical and not thinking that new things can’t be tried. So I wish you great success with your network School State and the believers in it. I think that’s kind of the most interesting part is that you’ve assembled hundreds of people in person and 10s of 1000s of people online who actually believe that this audacious project is worth their energy and their time and their geography. So congratulations. Thank you.

Balaji Srinivasan 1:00:35
I’ll say one last thing, which is people you’re watching this apply to network school, ns.com, and also, if you’re an angel investor, a VC and so on, we have space. So personal runway, basically, $18,000 a year like that’ll carry you 125k

Jason Calacanis 1:00:50
incubator check will go with two founders, couple years

Balaji Srinivasan 1:00:53
more than, yeah, well, so actually, way more than that, right? So basically, so if you have, if you’re, if you can’t get to the US on a visa. If you just want to cut your burn, apply to ns, and if you’re an investor, we can take your companies. We’ve got plenty of space and so on. Great pitch.

Jason Calacanis 1:01:07
Great All right, we’ll see you all next time bye, bye. Thanks.