NFT Passports

I right-clicked and saved

Imagine a world in which you could freely choose to which country to belong to. The pandemic has made it very clear that different countries have different ways of dealing with issues. On one hand, you have a bunch of Asian countries, like Singapore, who have been pretty strict with rules, and on the other many European countries that have been relatively flexible. Now there’s no right or wrong, but there’s clearly a difference in approach.

As a citizen of a given country, you pretty much follow the rules and if you disagree, while some countries may allow you to voice your opinion, most countries allow you to make yourself heard mainly via elections. I’m probably not the first one to claim that elections, in their current form, are pretty broken. But leaving that aside for now, what if there was an alternative for people to voice their dissent. What if it was easy for people to easily move and become citizens of another country, where they either felt their voice was being heard or they agreed with how the government was operating.

Balaji Srinivasan has an entire video where he talks about exits in-depth. You can also read it here

While it may seem totally unrelated, observing the world of NFTs and how it’s is evolving might point towards some possibilities on how this could evolve at the scale of countries.

I’ll talk about 3 themes and will try my best to tie them together at the end of the piece. At first, they might seem random, but there is a common thread you can draw through the 3

  1. NFTs as an access pass to a Community
  2. Voting with your feet
  3. Crypto Cities

The bottom line is the following

NFTs can be used as a tool to organize people at scale enabling opt-in countries

Let’s dive in!

NFTs as an access pass to a Community

There’s been a lot of chatter on the utility of NFTs, especially the really expensive ones like CryptoPunks and the Bored Ape Yacht Club. Why are people paying millions for a jpeg? The answer is actually not that hard and can be best explained by looking at Harley Davidson. In my opinion, there a 2 reasons why people buy a superbike — firstly to get from point A to B and seconds, as a signal to people around them. Now, if we take the Harley example, people buy the bikes to part of the Harley community. And you know a Harley by the sound of it — the roaring sound of bikes as they all ride past (which isn’t very different from the very unique looking Bored Apes).

The point is simple — people want to be in a community of like-minded people and buying things gives them access to these communities. Countries are communities on a very large scale. However, in today’s world, most of us are randomly assigned to countries purely based on birth — we don’t make an active choice.

Voting with your feet

The amazing talk by Balaji, which I mentioned in the beginning, makes the argument that a system is made stronger by providing an option to exit. In nutshell, what he says is that if people are free to leave a given system or community — there are 2 possibilities. Firstly, everyone leaves and the system becomes weak due to a lesser number of participants. The leaders and members of this system don’t want this and thus they’ll make sure they improve the system to prevent people from leaving. The second possibility is that some people leave and there’s higher consensus among everyone who stays behind and this makes the system stronger and more cohesive. Thus by allowing people to leave freely, the system gets stronger.

An example of this is startups. It’s very easy for an employee to leave a startup and thus leaders at startups pay a lot of attention to culture. This further enables these companies to grow fast and become massive organizations in a relatively short period of time. It’s worth noting that companies like Apple which started off as a tiny startup in a garage, just a couple of decades, are larger than most countries in terms of GDP

Apple’s market cap is more than the GDP of the countries marked in white. Apple could just be a country

So if it’s easy for employees to exit, why is it hard for citizens to exit countries? The real problem is the exit but entry into new countries. If you’re like me with a not-so-powerful passport, visas and residency in other countries can be quite painful. Some of the arguments against immigration are that the immigrants fail to assimilate into the culture and also act as free riders of the system.

Crypto Cities

Over the last year, there’s been a lot of talk on crypto cities. This spans from countries accepting and being pro-crypto to new cities being created. We’re spending more and more of our time in the digital realm and we’re aggregating into communities there. There are millions of people who believe in bitcoin and millions of others who believe in Ethereum. In my opinion, this is not very different from the belief in Jesus or communism. As we congregate around new beliefs which emerge in the digital world, just as in the physical world, we will create new cities and “countries”. And just like the real world, participation in these countries will require passports (or similar identification documents).

It’s clear that blockchain technology is the future of how this information is stored and managed. Countries like Singapore have already done a great job with digitizing a large chunk of government documentation, forms, etc. and the next step is making this public and interoperable across countries. The pandemic has helped accelerate things here where different countries try and find ways to validate vaccination certification issued by other countries.

Pulling it all together

The bottom line of all of this is that NFTs could be a tool to organize people at scale enabling opt-in countries. We’ve already seen examples of strong communities be built around NFTs, where people share a common set of beliefs. DAOs seem to be the new way of people to organise towards a goal with tokens driving incentives and participation. As DAOs scale to beomce large organizations like Apple, instead of becoming a company, they can scale to become new cities and countries — starting off in the cloud and then moving to the physical world. These countries would be opt-in (as you can’t really be born into a cloud city — well a pseudonym like Punk6529 can) and since you can easily move from one country to another, the possibility of exit will make each of these countries stronger than their physical-first counterparts.

If you’ve made it this far and want to participate in building a new network state, you can apply here

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Reuben Noronha

Reuben Noronha

I write about my experiences and ideas about the future. Startups, Crypto and Living Better are themes I write the most about.