Towards a Decentralized Nation: A Space Based on Bits and Pixels

Author: Mario Gabriele, The Generalist

Compiled by: Wang Xin, Chain Catcher

We do not always live in nations. Before structures like "France" or "Germany" emerged, empires ruled most regions. Roman rule lasted for two thousand years, and depending on how one defines it, the Byzantine Empire and the Ghana Empire both lasted for about a thousand years.

Compared to those reigns, structures like the "United States" seem quite short. 245 years is a blink of an eye in the Anthropocene. Even the U.S. looks ancient next to structures like "Russia," which now has an incarnation created thirty years ago.

This comparison serves to illustrate two simple points: nations are not very old, and there is no species law under which we must organize ourselves under their flags. Throughout human history, we have pieced ourselves together into tribes, fiefdoms, and city-states of varying prosperity and endurance. We prefer other configurations and thrive.

We will do so again. Just as mechanical progress gave rise to the nation-state system, technological revolutions are giving birth to new structures. While the internet is the dominant force in the current transformation, cryptocurrencies represent the missing piece. Despite much discussion, we are still in the early stages of understanding how blockchain can profoundly "vernacularize" economics and empower digital, uncensored homesteads.

The result will be a new civilizational structure: decentralized nations. "DeCos" will operate across borders in the digital realm. In this respect, they are similar to the "cloud nation" theory proposed by Balaji Srinivasan.

While Srinivasan's "cloud nation" seeks to "cloud first, land later," DeCos may never attempt to settle on land. Instead, these entities recognize that our digital lives are more real and valuable than our tangible ones.

In making this claim, DeCos begin to realize it, attracting groups into meaningful digital exchanges. Ultimately, this will enable them to replace nations as the primary recipients of our time, attention, capital, and social loyalty. Our descendants may not identify as "Italians" or "Turks," but as members of specific digital clans that they can carry with them, no matter where they are. In the future, we may jump between a range of such identities—a collection of citizens and bored apes—mingling in our nationalism.

Blockchain and Vernacular Economics

Blockchain was initially popularized by Bitcoin and the ideas of Satoshi Nakamoto, addressing the main obstacle to forming a digital space that competes with nations. So far, when online communities have clashed with earthly power structures, the real world (for the most part) has emerged victorious. Although lawmakers struggle to understand the technology, they still have the authority to regulate it through privacy policies and other regulations. Some governments have outright banned certain websites, effectively eliminating the possibility of these digital territories as potential residences for citizens. Both serve as the best proof that digital governance is subordinate to physical governance.

Moreover, blockchain opens another avenue, largely unregulated due to its decentralized architecture. For this reason, it will be difficult for governments to completely eradicate any well-constructed, popular blockchain. This is not to say they cannot restrict access to blockchains. By imposing legal means on traditional internet providers, legislatures can make cryptocurrency difficult to exchange, stifling innovation and reducing capital inflow.

Given the increasing market support for crypto, such measures are not only nearly impossible to implement in a truly democratic country but may only accelerate the development of decentralized infrastructure. For example, projects like Helium are creating "people-powered" wireless networks. Future internet users may no longer rely on entities like Verizon or AT&T—subject to legal jurisdiction and compliance—but instead surf on networks protected by citizen-operated nodes. It could be argued that lawmakers cannot push such entities, or at least not many of them.

Blockchain is essential for the existence of DeCos. But not because of any philosophical loyalty per se, but because it cannot be eradicated by a competing government, wiped from the digital world. Just as no one would want to join a nation that could be forced to disappear.

In addition to eliminating this dependency, blockchain also "vernacularizes" the economy. Literally— it facilitates the formation of a new internet-native economy.

We can clarify this through analogy. The traditional economy is spiritually akin to "sacred languages," which humans once believed had a special connection to truth. Fiat currencies and related instruments are conceived and controlled through top-down structures, viewed as superior to "vernacular" currencies, possessing special value.

Currencies like Bitcoin are the vernacular currencies of the internet, and historically, attitudes toward them have been similar. For traditionalists, Bitcoin or Ethereum are not "real" currencies and have not created a "real" economy. As the value of cryptocurrencies increases and their popularity rises, we see this stance beginning to break.

Blockchain plays a dual role in this revolution: the printing press and print capitalism. Without it, new products (in this case, referring to the economy) cannot emerge; without the capital it attracts (crypto investors), such products would not surge. Given the libertarian and occasional Marxist tendencies in the field, using the term "crypto capitalism" to refer to the latter is not entirely appropriate. Nevertheless, it still feels most fitting and helps us avoid confusion.

We can observe the impact of crypto capitalism on the rise of its market capitalization. Over the past decade, it has risen from an initial $0 to a peak of $3 trillion.

As part of this process, a wave of vernacular economies has formed. In 2013, there were only 66 cryptocurrencies; today, that number has approached 8,000. Many have successfully leveraged the internet's "network dialects," such as Dogecoin and Squid Game scams.

While not entirely analogous, this growth trend is reminiscent of the surge in output created by the Gutenberg printing press.

DeCos

Nations were not built for this reality. They do not serve fractal truths, network vernaculars, or the simultaneous existence of humans in space. They were not constructed for the internet or blockchain.

New civilizational structures will emerge from the failures of nations. Specifically, I believe we can expect the rise of decentralized nations (DeCos). These unions will be internet-native, unrelated to the physical world. They may start by utilizing platforms operated by centralized companies, but will ultimately migrate to a fully decentralized stack to protect their existence. In time, DeCos will attract a borderless "population" that rivals and surpasses many nations. Although most of this will be primarily in vernacular currencies, including currencies priced in DeCo, these entities will possess substantial GDP.

To clarify DeCos, we can outline how they align with and differ from the three characteristics defined by nations.

1. Ideology. DeCos still require ideologies and cultural norms to constrain their citizens. The agnosticism of these entities makes this relatively easy. DeCos do not attempt to determine truths and consensus within a geographical boundary but do so globally, gathering like-minded voters together. By reducing friction in governance participation, DeCos should also be able to modify and update ideologies more quickly.

2. Terrain. DeCos only care about physical terrain to the extent that traditional governments may obstruct the degree of digital legislative rulings. Over time, the financial and social power of DeCos will enable them to replace those traditional governments that yield to or are at least friendly to their agendas. While DeCos may not care about physical terrain, they must closely monitor digital terrain. Building unique digital topologies can protect environments and enhance group vitality.

3. Governance. DeCos will utilize blockchain architecture for on-chain governance. While certain parties may have disproportionate voting power due to their status or contributions, DeCos are democratic and have higher voter participation than our current democratic nations. Ernest Renan stated that nations derive the power of citizenship from the abstract "daily citizen vote" by choosing to remain part of the nation; DeCos will make this concrete.

Before further discussion, the concept of digital terrain deserves further explanation. Earlier, we emphasized how the internet operates as a whole space. The reason for this is twofold—disruption and mitigating the infinite homogeneity align with the best interests of DeCos.

First, terrain provides context. The physical realm we inhabit often indicates how we behave. We may not consider these things, but our attire, speech, diet, movement, and interactions are influenced by our location and surroundings. In the mountains, our clothing may differ from when we are at the beach; in one part of the city, walking alone at night may feel safer than in another neighborhood. Environmental cues influence our behavior.

The internet complicates this. Digital platforms certainly have topological structures, but they are far less apparent than in the physical world. "Context collapse" is an inevitable result, where meaning is altered when conveyed to an audience. Twitter's flat topology makes it a breeding ground for this phenomenon.

For example, every day, millions of crypto followers post two letters on Twitter: gm. It means "good morning" and has become a collective greeting in that constituency.

Through retweets and shares, this message may spread far beyond the abstract realm of "crypto Twitter" and disperse in other ways across other communities. This leads to a sense of "information asymmetry" for most people on the platform. Some may draw entirely different conclusions. For instance, car enthusiasts might wonder why suddenly everyone is talking about General Motors (GM).

Notably, the limited topology of platforms like Discord makes such confusion less likely. If you are in the crypto community, you will quickly learn that "gm" means "good morning." Boundaries create context.

Terrain is also crucial for establishing in-group and out-group dynamics and generating a sense of shared identity. While not the only factor, topology undoubtedly influences national routes. The presence of mountains or bodies of water provides natural contours.

Similarly, while this exists online in small ways (invitation-only products, passwords, and privacy settings), spatial features are diminished.

For DeCos to thrive, advanced infrastructure is needed to achieve a digital "terraformation." The most fundamental solution is the "metaverse"—a virtual realm that combines spatial concepts from real life with fantasy and the internet. DeCos in the metaverse can exhibit large-scale, context-rich cities and rural areas that reflect the ideologies and cultures of their citizens. Better yet, it can expand and upgrade over time to meet growing demands or adjust according to shifts in opinion. (Of course, to truly serve DeCos, it needs to be decentralized and not controlled by Meta).

You can imagine such a world: a citizen puts on a headset and jumps into the world of DogeLand, a DeCo composed of humorous ideologies, a virtual city filled with Shiba skyscrapers, and votes registered on-chain every day. Fellow citizens communicate and transact in their native languages, interspersed with emojis, paying for goods with Dogecoin.

Compared to Discord servers and Snapshot pages, such a world would enrich context and culture.

While DAOs may be the closest thing we have now, they do not seem particularly close to DeCos. While they possess the most promising large-scale, distributed, uncensored governance structures—a seismic innovation—they are not particularly secure in terms of ideology and terrain.

Aside from their commitment to decentralization, DAOs may lack a memorable and unique philosophical concept embedded in the minds of contributors. This is reasonable, as such depth takes time. It is also a result of DAOs heading in different directions. DAOs are not a new nation but explicit "organizations." They tend to focus on a clear goal rather than generating digital patriotism.

Of course, they are limited to the same low-terrain platforms as others. Over time, with better technologies, we may see DAOs transition from organizations to DeCos. While from an investment perspective, DAOs are already a compelling project, envisioning them as entities on a national scale reveals the extent of their potential.

Just as DAOs allow contributors to work on different projects simultaneously, DeCos may also permit multiple affiliations. This "mixed nationalism" would represent a significant departure. Today, nationalism tends to be singular. You can be a citizen of different nations, but legal and cultural norms do not encourage it. Some countries explicitly prohibit holding passports from multiple nations, including Austria, Bahrain, India, and Japan. Others may allow "dual citizenship," but this outcome often comes with dual financial responsibilities, a term that itself implies a limit. We hardly hear the term "multiple citizenship."

However, this departure may not last forever, especially in times of conflict. Over time, as DeCos establish stronger boundaries, cultures, and services, stronger loyalty may be required. Nevertheless, the limit may be much higher than "1" and may still differ.

Land and Transcendence

However, we have yet to consider how DeCos will address the issue of recognition, which is also the ultimate requirement of the de jure nation. Can we expect the Gorilla United States to soon receive approval from the United Nations?

Not at all.

DeCos should not seek recognition from old-world organizations. The key is that part of this structure's power comes from its ability to operate without the permission or support of existing nations. If they leverage decentralized technology, DeCos should thrive outside the nation-state paradigm.

So will countries prevent the rise of this scheme? As mentioned earlier, harsh bans may slow adoption, but in the long run, they may only deepen emotional ties and promote the development of decentralized infrastructure. Over time, the speed, ubiquity, and value of the internet seem likely to allow local architectures to triumph over slower-moving existing structures. By the time national legislatures have even constructed partial barriers, prototype DeCos will have adjusted.

However, this raises the question of how nations and DeCos will coordinate different agendas. How will land and transcendence negotiate?

First, we may see DeCo lobbyists attempting to influence favorable legislative changes. Some may even run for elected positions. These should be viewed as intermediate steps aimed at eliminating physical world barriers.

If support cannot be garnered within the existing political system, some nascent DeCos may seek to settle or win large tracts of land that can be self-governed. However, attaching themselves to specific territories may come at a cost. It not only limits the potential scale of DeCos but also ties them to a precise physical location, under limited space, which raises low-value work. Does DeCo want to spend time and resources planning upgrades to its municipal sewage system? Or would it be better to let a bare-bones physical world legislature handle this already resolved issue?

If we believe that the value of the digital world will increasingly surpass that of the physical world, then DeCos dedicated to the former will gain the most power. In this regard, I believe the most influential DeCos will have as little contact with land as possible, or ideally none at all. DeCos are not about completely abolishing the concept of nations but rather transcending them, leveraging their social and capital resources to control continental policies. At different points in human history, nations and empires have allowed themselves to be manipulated by religious organizations claiming unique powers; DeCos should be able to make similar claims.

In this way, DeCos gain as broad a base of supporters as possible, drawing inspiration from humanity, and focus their efforts on the world of bits and pixels rather than the world of bricks and mud.

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The collapse of old structures takes time; however, it may all happen faster than we imagine. Today, Singapore is one of the most successful sovereign nations in the world, with a per capita GDP ranking fourth, robust infrastructure, a strong national education system, and one of the best healthcare systems globally. Notably, it emerged as an independent entity only 56 years ago in 1965.

Half a century may be enough to witness the coronation of a true DeCo. Harnessing the power and scale of the internet, such an entity will thrive through vernacular languages and economic development. It will disrupt existing governance structures and transcend them. It will further transform our concepts of space and identity and encourage the "terraformation" of vibrant, complex virtual worlds.

Nations will not exist forever. It is time for us to consider what the next step will be.

(Note: This article has been partially edited)