OTNS: DAOs and Decentralized Mafias
Primavera and I have been at Zuzalu and took the opportunity to speak with Ameen Soleimani (@ameensol) about his role in Ethereum history and the creation of Moloch DAO and Privacy Pools. We also discussed the geopolitical implications of crypto technology and how it relates to thinking about network states. Overthrowing the Network State (OTNS) is a series in collaboration with Blockchaingov where we critique The Network State by Balaji Srinivasan while also pulling out the salvageabl...
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Transcript
Alright. Hello, everyone. You're listening to the Blockchain Socials podcast, and we are, continuing our overthrowing the network state series while we are here in person at Zuzalu. I'm here with Primavera and our guest is Amin Soleimani. And, yeah, you're like, I guess like an integral person when it comes to, like, reading about the history of Ethereum. So we thought it'd be interesting, to talk to you about kind of, like, the development of the technology and to think about how and why it became, more relevant to talk about the types of things that are talked about in network states now than it was in the past. So we're interested in, like, digging into that history and, like, some of the technical work that maybe you've been doing and, maybe we can touch upon on some of the activist stuff that you've been doing as well. Sure. Thanks for having me. Happy to be here. To start, would you like to give an introduction to yourself, for those who don't know you and, like, all the different projects you're part of?
Yeah, sure. I got into crypto buying mushrooms like a couple people in 2012, back in the day. At some point I worked for ConsenSys. I went on to start SpankChain, which is like a crypto porn payments platform. Then I started MolochDAO, which is, like, one of the first, grants DAOs on Ethereum. It paved the way for, getting rid of PTS DAO after the DAO hack and helped, you know, help people realize the coordination potential that was about to be unlocked. I've also was helping give a bunch of the grants to Tornado Cash. I'm more recently working on a fork of Tornado Cash called privacy pools. I also built a fork of, MakerDAO's DAI, which is called Rai. It's sort of like the ETH maximalist version where, it's only backed by ETH collateral. And, recently, my main focus has been trying to help, Iran through some nonprofit work through my NGO DAO called Iran Unchained, giving grants legally and compliantly through some OFAC exemptions, to Iranians who are trying to advance, you know, humanitarian aid network infrastructure and pro democracy efforts.
Nice. So I think maybe the first place to start that I think would be interesting, to talk about is maybe MolokDAO. Do you wanna describe, I guess, what was the the context at that time when it was started and, like, what it eventually became. If I understand correctly, it came out of, I guess maybe, like, a couple of years or a year after the DAO hack. So everyone I think when Ethereum came out, everyone's, like, super starry eyed. Like, 'Yeah, let's do DAOs. Everything automated. It'll be totally fine.' And then it totally was not fine. And so people stayed away from DAOs. Technology kind of improved a lot over time and then eventually, I think it was during a hackathon that you guys, came up with MolokDAO which became a more, I guess, kind of the first standard for DAOs and how to manage treasuries together.
Yeah. So, my first week at Consensus was the DAO hack. It was pretty fun. Fun. Fun. Yeah. We had we were exactly starry eyed. We're like, DAOs are the future. Everything is gonna be DAO. And then, it got hacked. Dollars 150,000,000 was, you know, in jeopardy. And then Ethereum had to roll back and sort of, it was the first it was the first and only time Ethereum has ever revoked the charter of a DAO. It's, like, how I like to frame that. Most, you know, most time, you you don't really have to worry about that kind of thing, and it doesn't seem like that's likely in the future. But, in the aftermath of that, I think it was Griff Green who came up with this term called PTS DAO where everybody that you wanted to talk to DAOs about that was previously excited sort of went cold. And they're like, You don't want to do this. Didn't you see what happened last time? It blew up. Everybody lost their money. Like, Are you crazy? And And we're like, yes. We see the, like, untapped, you know, coordination potential right on the other side of this hill. Like, we have to get there. Because we knew that and when I say we, I mean, like, me and a few of my, like, coordination junky friends, you know, there's people like James Young, Arjun, the Connects people, Cloudland now. We're all just working, you know, nights and weekends to try and make Moloch DAO happen. We realized that the way to get rid of PTS DAO and help advance, you know, DAOs in general was to just try and make the simplest possible DAO, like, the minimum viable DAO. And so we decided to just make DAOs, like, 400 lines of code. You could raise money in shares. You could mint new shares to essentially allocate some fraction of the pooled ether to recipients, grantees. And everybody can sort of vote on who, you know, should get the funds and whether or not new members should be admitted. And there is also a rage quit function, which was one of the, I think, the first time minority protections was, like, encoded into the DAO contracts themselves. And the rage quit was a mechanism to allow people to permissionlessly exit the DAO with their, you know, proportional share of the existing funds. And so it became easy to recruit. I walked around at ETHDenver, 2019 when we launched it and we were like, Hey, do you want to help save Ethereum? Deposit 100 ETH into MolicDAO. And they're like, How do I exit if we want to? And we're like, Whatever you want, just push this button and you get your money back. And they're like, Okay, that sounds great. So we were able to raise, you know, over 2,500 ETH from, like, you know, 25, individual contributors. And we started giving grants to advance Ethereum two and other sort of Ethereum open source efforts. It was the bottom of the bear market. So ETH was like a $100. So this is like a $10 buy in. And, from there, we were able to recruit, like, Vitalik, the Ethereum Foundation, Consensus Strelubin to help, fill in the treasury and provide some additional support. And then it became, like, even more powerful and started giving out even more grants.
I think what's interesting to me, I think, I mean, the rage quit function, I'm, like, surprised that that it wasn't thought of before. Mhmm. I guess I guess now it just feels very obvious that, that that's an option. Yeah. Or that could have been an option for people.
I was as surprised as you were. I didn't wanna actually build Moloch now myself. I wanted to use the Aragon contracts, but they disagreed that the rage quit was an important, piece of, you know, mechanism to have. They didn't want it. And they didn't think it was important at the time. Okay. And since then, they have you know, sometimes you just have to prove things. Right. So since then, they've, incorporated it into their framework. But for me, you know, and my squad of, like, part time, you know, devs who were, like, not trying to build a DAO platform, we were just trying to build one DAO for ourselves, it was, like, too much work to fork Aragon and add it. So it was actually simpler to just do it ourselves.
Yeah. Fair. To me, it kinda represents the, I guess, a major milestone in, like, thinking of governance when it comes to, Ethereum world and and smart contracts that I think, because I think in the beginning, I think for me is especially as well, I was, like, very, maybe, like, naive in the beginning. I was like, oh, we can make, like, all these, like, democratic structures through smart contracts. It'll be like, we can do that. And then it just came with a lot of, a lot of failed experiments. And then, yeah. I think now we're at a point where it's becoming a lot more interesting and a lot more, I guess things can become more complex, but it started surprisingly with just, like, being able to pull out your funds. Yeah. Even though, like, it's not something that maybe like, I'm personally also maybe, like, not interested in, like, that type of structure, but it's also just, like, a very basic thing to be able to have that option to do in, like, these types of experiments.
And, so if we try to to, focus on how those new technology, blockchain, DAOs, etcetera, can can support the activity of, network states in whatever flavors we can think of. To which extent, like, from a more maybe, like, abstract layer, like, to which extent do you do you think that blockchain technologies are enabling things, that, you know, enabling entities or collectives to actually operate in a much more, self sovereign manner without depending on existing corporations, servers, or, like, in fact, server controlled, by nation states. So, like, to which extent do you think that blockchain technology really provide this type of self sovereign infrastructure? And if it does, what are the values bricks or building blocks of the tech stack that are necessary in order to have a full fledged, network state?
I think that's a great question. I think it would be really hard to have a conversation about network states if DAOs weren't already somewhat commonplace and blockchains didn't exist. Because, like, what the blockchain itself represents is a couple things. Right? You have the settlement layer, for something like Ethereum. You have the the contracting layer, that allows you to create these sort of agreements and rules based organizations, and encode that on the blockchain. And the benefit of the blockchain there is obviously, you know, transparency. It's easier to build trust with the other members of the organization when somebody can't necessarily unilaterally go and change the rules, or there's, you know, less, like, jurisdictional risk where, like, the legal, you know, enforcement arm of some country that you try to contract on top of, like, doesn't honor what, the organization was supposed to do. And then, there's the monetary aspect as well, which allows you to be able to raise money, spend money, do public goods funding for your DAO or eventually network state without necessarily needing a country's fiat involved or to go through the traditional banking system. Know, sometimes when I talk about DAOs, I I say it's like a group chat with a bank account. Right? And it's, makes it, meant to explain that, like, oh, like, getting a bank account for your group chat is, like, actually this, like, onerous difficult process. Everyone will look at you like you're crazy. But making a DAO for your group chat is really easy and does all the same things, except digitally. And then for DAOs themselves, I think you know, in terms of being able to facilitate democratic processes, voting, delegation, you could have, you know, different governance systems. And then that's a critical part of any network state. And then I think the public goods funding models are also important because how does a network state actually advance its interests, right? It has to have some decision making on what it should be financing and how it spends the money and who gets to spend it. And all of those things are basically explored by DAOs first in the context of usually local operations. Like things like Moloch DAOs, it was a bunch of people in a bunch of different countries, but still, you could fit everybody in the same room. So it starts with that and then I think it scales up.
Yeah. I think what is interesting, like, to me, there's a little bit of, like, there's a feeling of that as that the technology has progressed in a way to where now we can think about, like, almost, like, geopolitical implications of the technology and, like, a lot of big what ifs that seem like are not too far away, around when it comes to new forms of governance, and, like, planting, I don't know, you could say, like, new forms of sovereignty. But what is interesting to me at least, like and then I mean, what was, like I've mentioned this a few times, but, like, Balaji doesn't he talks about DAOs twice, like, in the entire book. Because that's just, like, really, really, crazy. Like, the huge one of the biggest mismatches to me is, like, wow. We have all this stuff for incredible governance and, like, DAOs are really interesting. And, like, when I thought network state was, like, oh, he's gonna talk about DAOs a lot. And I was like, he's not. I was really surprised.
Yeah. That was odd for me too. That seems like the community and, like, the movement, on which he's drawing the most, in terms of ideology and actual
technology. Right. Right. It's almost yeah. For me, maybe this is a bit extreme, but it feels like a cooptation of, like, the movement that are of the people that are more interested in DAOs and crypto, and he's just kinda like, I don't know, creating this meme for people to, like, fall into because they're not gonna read the book.
Maybe something like that. He does talk about Bitcoin a lot, right? He does. He does. You know, I would argue that, like, Bitcoin is the most successful DAO. Sure. Yeah. Not my preferred type of DAO, but Yeah. Yeah.
But so so so let's say that we have, like, the cryptocurrency, whatever it is, native or token based, that can be, like, the basic infrastructure for, like, currency of a network state, which obviously a network state ideally will not, depend on the monetary issuance of another state. And then we have, if we like like DAOs for some kind of collective management of resources. So all of a sudden you have a bank account, you can put asset back talk and whatever you want into this thing. We have some governance structures, in order to potentially engage in collective action. And so what is missing? Like, so in that case, it it we could just claim, well, actually, any DAO is a network state. Right? So what is missing in order to actually
state change and bring a doubt to the qualification of a network state? I feel like I kinda wanna turn this around on you and ask you, like, what do you think the difference is between, like, a nation and the state?
We've been spent the last ten days talking about that. Very easy question. I mean, basically, the the nation is the people. The nation is the the cultural, ethnical, institutional fabric. Like, the social fabric that makes a particular group of people identify themselves as being part of a collective and having a shared identity because of these cultural traits that they that they have in common. And the this kind of, like, Latin sense of tribalism of, like, we are part of the same type. So that's the nation is a very institutional creature. The state is a very institutional creature, which is essentially the way in which, this particular group of people decides to institutionalize a particular framework in order to be able to coordinate. Right? So any any group of people that qualify as a nation can create an institutional scaffolding. The the the the explicit definition of the state according to the Montevideo convention is that you need, like, a defined territory, which is the highly controversial elements in our view. You need a, a stable population. You need a government, a way or to govern yourself. And then you need some kind of ability to enter into relationship with other state, which implies diplomatic recognition. So when you have those those those five thing and then the the stable population can be a nation, but doesn't have to be. You can have nations that span across multiple states, and you can have states that combine multiple nations within them. So there is not like when we talk about nation state, it's a very specific category that assume that there is one nation and one state that are implicated with one another. But oftentimes, this is actually not the case.
Right. So, like, an example of this would be like the Greek city state system where, you know, all of the city states are sort of part of the Greek nation, but they're organized at the city level as states. And sometimes the states actually decide to coordinate together in order to advance their common goals or defend against, you know, mutual, like, threats, external threats.
I think even, I know we were having conversation with, Odysseus, the Greek guy who was in our workshops, and he was saying that, I mean, that the Greek national identity is actually quite new, that there was this process of the national story, which, I mean, of course, heavily took from, like, the history of ancient Greece. But, like, people at the time would identify themselves as Athenian or Spartan or whatever, and they would not they would see each other as enemies. And it was only, you know, in, like, the eighteen hundreds, I believe, that, like, Greece really created a more of a national identity to to to rally around, the creation of, like, the Greek state.
But to to to bring back the question to you, so I think it's really, it's really difficult to claim that any community that coalesce around the DAO will qualify as a nation. I would say that most of those communities don't even don't don't even feel the smallest tribalistic, affinity or kinship amongst the Tsar that are just like playing a particular token game. So I think, first of all, there's the question of to which extent when when does the community that is using a DAO to coordinate qualify or not qualify as a as a nation? And the other question will be, to which extent is the institutional scaffolding, the technological infrastructure of a DAO enough by itself to actually be regarded as a sufficient governmental structure that could, therefore, potentially qualify as a state or at least as a network state if we don't care about the territory?
Yeah. So I think, like, if you squint, you can kind of think about Bitcoin as a kind of nation. You could think of, like, Ethereum as a kind of nation. You know? I'm sure there's a bunch of nerds here in Zuzalu who believe that more strongly in their, like, identity you know, Ethereum nationalism than maybe they're even, you know, like, whatever actual country they're from nationalism, and want to advance the cultural identity of Ethereum more than, like, whatever country. And I think, you know, like you said, they don't need a central coordinated, state to, do that necessarily. They can advance the nationhood, by recruiting people and advancing the culture. It's like winning the culture war and civil cultural victory and civilization or something.
And you also play Civ. Yeah. I know. That's my game.
So the one of the things that I thought was, you know, missing from Balaji's book, Network State, was talking about how to actually, like, defend itself. Right? And one of the, you know, when I think about states sometimes, you know, in non euphemistic terms, like, I think of something like, an assassination guild, with, like, a public goods department, because it's, like, the most important reason to have a state is for, I think, security purposes. Like, if you don't have a state, it's fine until somebody else with the state comes knocking. And then you're like, Wait, I need a state now, to be able to self police and defend us. And now we need these institutions. And so, now we need to think more critically about this and try to build these up. And that part wasn't really there. And I think that the tools basically exist to try to build up mutual cooperation around mutual defense. So, like, you know, hypothetically speaking, I could imagine a thing like a mutual defense DAO, right, where, it's, like, similar to something like NATO, in the sense that NATO is a way of, you know, coordinating states, nation states into a sort of super state, that can then, you know, have It could do what The United States wants it to do. Yeah. It is, you know, advance the interests of the member states and, like, help defend them. But what's the peer to peer version of that look like? Right? Why can't I have one of those with my friends? And that's an interesting question because you kind of could. And one idea would be, okay, we'll form a little DAO and the rules of the DAO are like you place a bond into the DAO and the game is if somebody else in the DAO is attacked, then you pledge to come to their aid and retaliate against whoever attacked them. Right? And then the other There's some oracle that says, Well, was somebody attacked? And there's some other oracle that's like, Did you come to their aid? And these can be governance processes. You could incorporate external oracles or judiciaries. But then, if somebody doesn't retaliate, then they have their stake slashed and redistributed to potentially the other members and maybe they get kicked out. In the game theory, this becomes like, well, you want to vet the members so that you don't inherit somebody's beef because you don't want to get dragged into conflicts that you don't want to be a part of. And then, if somebody is particularly aggressive to other people, then they're more likely to get attacked. So you might charge them a risk premium. And then the way you could scale this up is you have, like, your, you know, neighborhood mutual defense DAO could vote to be an individual member of the, you know, one level up mutual defense DAO for, like, the town, which votes to be, you know, parts of the city, which votes to be part of the region, which votes to be part of the, you know, country, which was eventually be knit. And that you know, and that I think that's actually how, like, sort of the world works, today. And so we're just reimplementing this on a more transparent, more, digital, substrate in order to make it work potentially across geographies. Right? The whole point of the network state is that, you know, it's not necessarily geographically, contiguous. Right? You have a bunch of different city states. And so the question that stood out to me was, like, what happens if a city state or, you know, one of the nodes of your network state is somehow threatened or attacked? Like, how does the rest of the network state help? Right? And without answering that question, I think, it's it's kinda hard to know what we're talking about.
Yeah. I think there is this, that's that's a big thing that's missing. I think Balaji has this bit of a naive idea that now we can finally make states without violence by buying the land within a nation state, and they'll just, like, let us create our own state within that. That just sounds like outsourcing the violence to the people who are already professional at it. Right. So it's just like, okay. Either I mean, he doesn't talk about it at all. Like, okay. Well, if you get into that position, actually, then you you just need, like, a private army probably, like, if if, you know, which is
Right. Problems with that. That's the state part.
Yeah. But so I don't do we want to go into mafias?
We we we can go into the the organizational structure, but maybe before that, I was I was wondering, like, the to me, like, so again, let's make a distinction between the Balaji's particular definition of network state, which eventually step seven require, acquiring diplomatic recognition, meaning becoming sovereign on your own territory, meaning that you have a territory to defend now. And, the broader concept of a network state, which might not imply actually acquiring sovereignty over a territory. In this case, you're not really, free riding on the on the national security of a country. You're actually part of that country still. Mhmm. And you just have individuals coordinating themselves at that transnational level, in order to achieve things that are outside of the territorial domain. Right? And and I think there is a lot of things that nations or digital nation can do in order to mutualise resources and support one another independently of the land section. And in this case, while I do agree that Balaji is clearly not given his definition of network state is clearly not tackling the question of national security and, and defense, I will argue that in the in the more general definition of network state, which doesn't which doesn't have a territorial aspect to it, this question becomes much less,
crucial. I think that's a good point because some of the threats that we face aren't necessarily, like, even territorial threats. Like, in the digital age, right, getting, like, hacked, can be, you know, like, pretty bad. You can lose all your ether, all your money. And so forming, you know, a network state that just provides, like, network defense, and helps, you know, provide OPSEC and, like, is some place you go to, like, report on things as they happen and helps, you know, know, try to identify, people who might attack you just digitally, is also a useful thing that doesn't require you to, like, you know, take on the challenge of, like, physical defense out the gate as a network state, but it could allow your network state to specialize in a certain other, you know, realm of, protection and coordination.
And I think once we once we remove the question of, like, actual physical defense, I think an interesting thing that also we have been exploring a little bit in the, doing the workshop, is like, you know, especially in our capitalistic world, perhaps the best way of actually, doing any type of enforcement is not violence and physical violence, but it's like economic sanctions. And, and today, nation states are doing that, but nothing prevents a network state which has some kind of economic power to actually engage into sanctioning those entities that do not abide by specific principles.
Yeah, I agree with that. And, another form of defense is legal defense. Right? So being able to, for example, pool money and spend it to protect individual members that might be subject to frivolous litigation is yet another way that a network state would be valuable. And maybe DAOs are ahead of the curve in this because MolochDAO, thank you to all of the donors, was actually helping pay the, like, PepperSec, the Tornado Cash team's, legal bills. Right? One of the Tornado Cash devs was, you know, arrested and thrown in jail in The Netherlands for the last six months, Alexey Pertsev. So, was contributing to,
the legal defense fund for that. Do you wanna talk about maybe a bit, on your work on privacy pools? Because I think that's a interesting part of this question of, like, I guess, asserting sovereignty in in some ways that are, I guess, in some instances, antagonistic towards certain states.
Yeah. I think, maybe in the same way that, like, ownership of guns is protected under the Second Amendment. Like, ownership of anonymous money should be protected under the Second Amendment in America. But I think privacy becomes really important for public blockchains because everything is by default public, right? Anybody sees all your transactions. And the way that we had privacy before Tornado Cash existed was it was like run your money through Coinbase. That's not a very sophisticated privacy scheme. Run your money through the private corporation. Yeah. And low level support engineers at Coinbase can be bribed to reveal your entire transaction history. And that's not what anybody wants. And so, I don't know, for the benefit of listeners, Tornado Cash itself was sanctioned in August. And that's when they put Lexi in jail. And since then, Americans have not had access to privacy on the blockchain. There's a couple of other tools that can help out. But that was one of the best ones. And we didn't make it because we didn't anticipate, like, it being geopolitically important. We wanted privacy for ourselves and our friends, like, just, you know, for that. And so, in the aftermath of Tornado getting sanctioned and us trying to figure out how we might be able to still have privacy, in a way that, you know, works within the framework of the existing sort of government sanctions regimes, we decided to make privacy pools. And so, privacy pools has one additional feature. We say we fixed it, Tornado Cash. Because Tornado Cash had the problem where when you withdraw, you're still contributing to the anonymity set of all of the other potentially illicit sources of funds. And you can't necessarily help the regulators isolate the illicit funds. Whereas, in privacy pools, the additional feature it has is that when you withdraw, you can actually go and specify the deposits that you don't want to be associated with. And you can remove them from your own anonymity set which also removes you from their anonymity set. And so, it's a ZK Markle proof of exclusion, fancy cryptography. But ultimately, it allows you to prove verifiably by anybody that you are not associated with certain deposits that you probably know or elicit. We know a lot of the hacks, where the money goes and which specific deposits are, but
most importantly, without revealing who specifically you are. So then, is this like almost like a personal you can choose your own personal sanctions lists?
Yes. But if you're, for example, an American, it would behoove you to choose,
the American sanctions list. Right. But, like, you can if, like, if if it's already public, like, which addresses are probably associated with North Korea or whatever so that you because, like, then that's, like, the whole issue with the OFAC thing is that, like, your funds are getting mixed with, North Korea's and they're a bad actor. So if you can if there's already a public list of, like, addresses that are associating, just be like, I don't want to associate my funds with this list. And Yeah. They're therefore, you've proven, while still maintaining your privacy. Yeah. That's right. Because and then just for the listener as well, in case, like, the way that Tornado Cash and privacy pools, I assume as well works as well, is everyone puts in, like, the same amount of ETH Mhmm. And then, gets mixed Mhmm. And then is
You deposit $1.10 or a 100 ETH, and then sometime later, you withdraw the amount you put in. And, you know, all that anybody can tell from the blockchain is that one you know, somebody withdrew from the pool. They don't know which of the deposits it, is Right. You know. It's hard to match one to one who deposited it and what their outside address is. Right. Yeah. We're making some advances on the privacy pool stuff. I'm actually excited to report that the, you know, person who wrote the privacy the tornado cash paper on behalf of the Saint Louis Federal Reserve, is, this guy named Fabian Shar. He's a, you know, blockchain professor at University University of Basel. And the Europeans think a little bit differently about privacy than the Americans, because the Europeans, value it a little more highly. The Americans kind of want to spy on everybody. So he was, discussed it with him and he was open to exploring how privacy pools could be a useful standard across the industry. In his paper, it was about tornado cash from the St. Louis Federal Reserve, which was shocking to me. They wrote the line, Tornado Cash could be an integral part of public blockchain infrastructure. And I was like, mind blown, right? Somebody put this in. They made the recommendation for the regulations to be, you know, we'll let you use this. However, you have to reveal, you have to use so the Tornado Cash Dev has actually built a compliance tool that allows you to, you know, provide receipts to some regulated financial institution that helps them actually, connect your withdrawal to your deposit. And so it reveals your whole, you know, transaction history to them. And so they said, look, if you're willing to reveal your transaction history to a regulated financial institution, we're willing to let you use this thing and maintain your privacy to everybody else. Right? That's the benefit for you. The annoying part of that is that you end up sort of in the same place as, like, then low level support engineers at Coinbase being able to, you know, connect the dots and have your whole transaction history. And so the reason for making privacy pools is because we believe that we can do better than that. We believe that, you know, I should be able to, you know, use the thing, use use the privacy pools, maintain my privacy, and simply prove that I'm not the illicit actors, the sources of the bad funds because we think that that's what the law requires. I don't think the law actually requires that you reveal your whole transaction history in order to maintain privacy. And this does do what the regulators want, which is it helps them isolate the illicit funds because it reduces their anonymity set.
Do we now want to get into Blockchain mafias? Because you you, you, you posted a meme, I think, last night based on maybe conversations that we're having at dinner. Yeah. What was it? Like nation states, network states? Blockchain religions. Blockchain religions.
Decentralized mafias. Decentralized mafias.
So do we want to talk about that? I think maybe, Priveira, you can talk a bit about the interesting aspects of that. Yeah. I mean, we had this, little discussion yesterday evening and,
in some ways, like, there's something interesting because when we talk about network state outside of Balazs's definition of a territorial, network state, but how there are those things that kind of coexist alongside, existing territory that are controlled by nation state. There is we have an actual interesting example, in many countries where there is this kind of alternative governmental structure, which is, which is potentially operating as an alternative type of state, which is the mafia, and doesn't doesn't at all claim ownership or sovereignty over the territory, but rather and in this case, potentially free high, but not just free high because it's also providing its own services. And so we we were we were reflecting on, like, would would a network state that actually doesn't want to reclaim any type of sovereignty of a particular piece of land, will that end up looking something potentially like the mafia also taking into account that the mafia obviously has its own specific, agenda. But the the infrastructure and the interweaving, and in fact, the the potential form of interaction, collaboration, or competition that exists between the mafia and the governments, we could potentially see a similar pattern, if we really had those network states that do not try to to separate themselves from the state, but because they have their own governance structure, because they have their own mechanism of, you know, funding and potentially even defense, etcetera, but that coexist exactly on the same piece of land. And so you have all of student two types of governments, that needs to somehow find their protocol and their interfaces. And so we were discussing this, this question of, like, how will the network state look like? And would would the mafia be one of those particular instances or recipe that a network state could have? And and can we think of this particular infrastructure in a way that is not necessarily only negative? But for instance, can we imagine, a network state that cares about the environment and that intertwine with the territory and with the government in order to try and actually, advocate for specific, behavior and and even, like, influence the govern the national government to act in a particular way in order to promote it, the interest of the of the environmental network state, I e, the environmental mafia.
Ecoterror DAO. Ecoterror network states. Really need to watch how to blow up a pipeline, and then we can talk about it more. Right.
This this is a great question. It's a a little bit, you know, awkward. Right? Because, like, we're not trying to build tools for mafias. Yeah. We're trying to, you know, advance sovereignty, for individuals and for groups. But, like, as it turns out, you know, the awkward conclusion, you know, that you come to after learning about this kind of stuff for a bit is that, like, mafias are the groups of people that take sovereignty the most seriously out of everybody else. Right? It's like the opening scene of The Godfather. You know, a guy asks him for a favor because his daughter was, I think, raped or harassed. And then, you know, he sends his guys to teach the, you know, the kid a lesson. Right? And so that is a governance system and some deterrence, being acted out in a way that, enhances the sovereignty of the people involved because it makes other people less likely to infringe on their rights. I think I think it was, like, Rune. He's, like, some Twitter personality. He he said that, like, until the tools are, like, used by the Sinaloa cartel, like, like, you know, they they should be the most likely to set this stuff up. And it's like, I don't really wanna be building tools for the solo cartel, but, like, I don't know. It's it's it's it's something to think about. And maybe, like, maybe you're right. Like, maybe what we need is more positive examples of the stuff used for public goods, and ways people coordinate and advance their sovereignty, but then align that coordination with environmental causes or human rights. And then we maybe see that the nation state is not the vehicle for doing those things as effectively. And so we start to explore these alternatives.
Yeah. And I think that if we, like, if we if we remove the world mafia, which obviously has its own connotation, but I think there's something interested in actually looking at how there can be alternative organisations that really organise at, an international, transnational layer. And we do have those, right? We have, like, extinction rebellion, etcetera. But oftentimes, they have a very, antagonistic or contrast, like, rebellious type of approach. What is interesting when we look at the way in which the mafia organizes is that there is actually while it while it is antagonistic, it's actually deeply in in, what's the height of it, in entwined, in in touched, within the existing infrastructure of, of the national government and therefore has influence. Right? And and I think a network state that could potentially acquire some some type of, you know, diplomatic recognition independently of the territory and become the forehandaktor in international relationship because it actually connects and interfaces also with national governments could actually have quite an impact, perhaps more than the lobbies quo that are lobbying for for something because there is but economic capacity because of, like, decentralized sanction, whatever, but also subsidizing. Right? And all of a sudden you could have a network state that is subsidizing a nation state to act in a particular manner and that is entering into also the politics of this thing because it it it acts itself as a political actor.
Yeah. So, I think I think it's interesting to think about the Balaji network state as owning territory itself. That's not really what it seems like how mafias operate. They seem to operate more along the lines of a network state that doesn't have territory. But, you know, like you said, just engages with the existing political structures that are there. And a lot of it is secrecy, right? As soon as you have a plot of land, everybody knows who you are and where you are. And it's almost like if you do that, you have to then be able to defend that plot of land. It's a little bit harder than if you simply were just operating within the same geography as everybody else and nobody could easily identify your headquarters, Right?
Well, I think it's I think maybe mafias in particular, they just they have which we talked a lot about in, our sort of, public, presentations that they have an interface with the markets and the states Mhmm. That works quite well. And they don't like they're not trying to, necessarily separate themselves from it, but, like, use it in ways to advance its own its own goals. Yeah. Exactly. And I think again, like, the the thing with the mafia is that,
they try to act in a underground concealed manner, and like, probably engaging in some illicit illicit activities. If we had an actual transparency system because there is nothing to hide according to the contrary, and, because the network state wants to have some kind of political power act as a political actor without having to, like, walk in the vaccine, then we could have a system that is much more legitimate by the way in which it actually operates. And the FARC will have, like, the the proper type of accountability and legitimacy while nonetheless engaging into the same type of interfaces together in the state?
We probably underestimate the degree to which, like, either, you know, banker mafias or even, like, military industrial complex mafias have already infiltrated the state and use it to their own advantage in order to like make profit and advance their own interests. Like, at at at at a certain light, you know, if if the mafia has come to control the state, then, like, maybe the state isn't much better than the mafia to begin with.
Well, I think there yeah. There there's a lot of lot of things to consider about the about that. But, yeah. Where any other directions that you want to go with this with the conversation? What give us your hottest take, the spiciest take you can think of to close it off.
I'll I'll just, you know, say that I hope that the Iranian diaspora is able to, you know, form some sort of network state or use the tools of network states to advance the cause of human rights, in Iran, I think that would be a positive development.