Digital nomads could create network states

Here's how.

This essay is by

Olivier Roland

for CITY STATE, a collection of seven writers exploring autonomous governance. You can support the project by collecting the digital or print edition here 👇🏻

I think digital nomads are the closest thing we have to a network state,

Balaji

‘s concept of a future world of decentralized nation-states.

In the age of the internet, where influencers bring together millions of people, the idea of forming a digital society and then turning it into a real state becomes plausible:

• They have a real sense of belonging to a global community.

• They are united with other digital nomads in an international way that isn't always true of other professions, like say, fellow plumbers, in a bond that transcend borders and languages

• They speak English, made almost compulsory by their extensive travels.

• They show solidarity among themselves, being expatriates in foreign countries, and subject to the same problems.

• They have identified hubs of their own: Lisbon, Tallinn, Cyprus, Dubai, Cancún, Bali, Chiang Mai...

• They have numerous online communities in which they forge links, converse, exchange good tips, and share places to visit, ways of conducting their business or their job remotely, etc.

• They regularly organize formal and informal events for their fellow digital nomads.

They even possess many of the characteristics of a nation—all they need to become a network state is to recognize that they are part of a group that has the potential to have a political identity. Once they have this consciousness, they can create a state to represent and protect them.

Here's a realistic first step that could get us there: Create an online union of digital nomads.

Imagine a community of digital nomads with around 50,000 members. This is not a difficult number to reach with today's tools and social networks. Although it's not compulsory, a membership fee could be paid in cryptocurrency, which could then be converted into tokens (issued on Ethereum, for example), enabling participation in the online life of the community and voting on important decisions. This participation would ensure that individuals are committed to the community: Someone who pays a membership fee is more committed than someone who just pressed a "subscribe" button for free.

The membership fee/tokens will encourage nomads to participate in the decisions of the community. They will also prove we have committed members: "As you can see at this Ethereum smart contract address, we currently have 27,892 active members who have paid their membership fees."

Once this community has gathered online, we could start with simple actions, such as negotiating favorable conditions for health insurance tailored to digital nomads, discounts at Airbnb or certain hotel chains, partnerships with brands, etc. But that's not where it gets interesting...

Imagine we want to obtain favorable terms with potential host countries for our community. We could carry out a survey to identify countries with which members would like to negotiate advantageous conditions for setting up shop. The process begins by surveying members to find out their average income and willingness to relocate. Then, these members could make a commitment, perhaps by transferring a certain sum in cryptos to a dedicated account, as proof of their seriousness.

The process could work as follows:

• Conduct a poll, or organize a vote, to determine which countries to negotiate with first.

• Similarly, conduct a survey or vote to determine the ideal conditions desired by members. To help organizers negotiate, they could indicate, for example:

  • Their preferred corporate income tax rate.

  • The maximum rate they would be willing to pay.

• Get members to sign up (eventually with crypto stakes in a smart contract), so they can transparently prove to the authorities that a certain number of community members are willing to move in. This could work as follows:

  • If at least one of the countries for which the member has voted offers compatible conditions, the amount at stake remains blocked until the person has moved to that country. After a certain number of days following the signature of the agreement, e.g. 180, if the person has not moved, the amount is paid to the community, which may then transfer some or all of it to the host country.

  • If none of the countries agree to the the conditions indicated, he gets his stake back.

  • This mechanism proves that the members who voted are involved and not just tourists.

Armed with this information, community leaders can then enter into negotiations with several governments. For example, in discussions with the governments of Portugal, Indonesia, Caribbean countries, etc., they could propose a deal: "We have 5,000 people earning an average of $120,000 a year, ready to come and live in your country. What conditions can you offer us?"

Five thousand people may not sound like a lot, but with $120,000 a year, the true average of what digital nomads were earning in 2023, they are in the top 1% of highest earners in most Western countries. If a country taxes the incomes of these 5,000 people at 10%, that's an additional $60 million in revenue every year. If it taxes them at 20%, that's an additional $120 million in revenue every year. Plus indirect taxes, such as VAT on purchases, and taxes paid by individuals and companies selling goods and services, which will probably double tax revenues.

That's just for 5,000 people. Double these figures for 10,000 people, multiply by 10 for 50,000. A country could earn over $1 billion in additional tax revenue by attracting just 50,000 digital nomads, taxed at 10%, which is an excellent deal for both parties.

Are you beginning to see just how attractive it is for countries to attract digital nomads to their soil? And how this could be a major leverage for an online syndicate?

By adding a touch of competition between countries, mentioning parallel discussions with other governments, this union could negotiate better tax conditions, simplified visas, and other benefits for its members.

This concept is not yet a fully-fledged State, but it represents an important step in that direction. It's a more accessible solution, enabling us to start building bargaining power with governments and securing favorable conditions for community members. Later on, we could even establish a special economic zone reserved for members of the community or by facilitating the use of special economic zones for members by making access conditions more flexible for those who are foreign to the country and have Internet businesses. This forms a solid basis, a proto-network-state, which could eventually evolve into something bigger and more structured.

This strategy puts free market principles into practice in a governance context, while harnessing the advantages of digital technology and modern mobility. It also offers a concrete way of testing and refining governance models before moving on to a larger, more ambitious scale.

Possible types of benefits we could negotiate, from the easiest to the most important:

• Purchase land and real estate to create a special economic zone with tax benefits.

• A special status for members of the community, with, for example, visa facilities and specific tax breaks, possibly linked to the special economic zone.

• The possibility of creating a Free City with a certain degree of political autonomy, but which respects the constitution of the host country and its penal code, like Próspera in Honduras.

• Eventually, diplomatic recognition of the community as a network state, with, for example:

  • Acceptance of passports (to be created) at border crossings

  • Negotiating a bilateral tax treaty

  • Recognition of a degree of political autonomy on certain lands purchased by the network state in the host country, such as Próspera, or the Knights of the Order of Malta in Italy.

Note that any existing Free City would make a partner with whom it should be relatively easy to forge agreements. All of the above should be relatively easy to negotiate with Próspera, for example.

We can therefore relatively easily create an online syndicate of several tens of thousands of digital nomads, gradually offering the following services:

• An easily accessible online community to help each other and share tips.

• Regular virtual and physical events.

• Joint trips to destinations of interest.

• Health, travel, comprehensive and other insurances at negotiated rates.

• Reduced prices on services such as Airbnb, global e-SIM cards, hotel chains, brands favored by community members, etc.

• A legal and tax service specialized in digital nomads available to members (either included in their membership fee, or available at a reduced price for members).

  • Such a service would be of particular interest to members as most lawyers are single-country and therefore lack the experience to meet the specific needs of digital nomads.

• Partnerships with fintechs specializing in digital nomads.

• Access to apartments or buildings in popular community hubs, purchased through community crowdfunding.

  • This crowdfunding could give access to tokens on a blockchain that would entitle the holder to X number of days of occupation per year, depending on the amount invested, for example.

• Partnerships with health clinics and practitioners (physical and mental) in nomad hubs, giving members easy access to care wherever they are.

• Temporary nomad villages, in locations emerging as popular destinations for nomads, with a local partnership for high-quality Internet, affordable housing, workspaces and shared services.

• An application that provides easy access to these services and makes life easier for members, with additional services such as rating the best cafés available in a city for working on the computer.

Such a union would already be extremely useful, offering numerous services that will make their equivalents offered by traditional states obsolete. It could then gradually become a minimal network state by adding other services:

• Easier access to special economic zones (SEZs) in host countries, as seen above.

• An "e-residence", like Estonia or Próspera, giving access to its digital infrastructure.

• An ability to intervene on behalf of the community if members see their social media accounts banned, or bank accounts closed, to negotiate with the players in place to reopen the account. This could be particularly useful, as the relationship between digital nomads, digital giants and banks is a David vs. Goliath situation. And banks are particularly poorly placed to understand the needs of digital nomads, and their lack of physical address for some, for example.

• Access to one or more Free Cities and other politically autonomous SEZs.

• The creation or co-creation of a SeaSteading city, possibly off the coast of a favorable host country.

• The development of an internal economy, with, for example, a marketplace facilitating business between members, and the encouragement to use one of the cryptocurrencies favored by the community.

• The creation of an internal online tribunal to resolve disputes between members or with third parties within a framework of trust. This tribunal could be based on participatory justice principles, where members vote for arbitrators and establish common rules.

• The creation of a mutual insurance company with which members can contribute to a common fund to support those going through difficult times (accidents, illness, financial losses). This fund could be governed by community votes to ensure that aid is distributed fairly and transparently.

• Make agreements with various countries to allow digital nomads to benefit from flexible temporary residency statuses, facilitating changes of residency according to their projects, which could be combined with advantageous tax offers and temporary housing programs to facilitate itinerant life.

• Consular services, including passport creation and renewal, once the union has begun to obtain diplomatic recognition from other countries.

• Eventually, guaranteed access to a free, uncensored Internet wherever a member is on the planet, thanks to a partnership with a company owning a fleet of satellites, or even a fleet of satellites belonging to the network-state, possibly in collaboration with other network-states, Free Cities and floating cities.

The union will be able to recruit experts in the creation of e-residency programs or special economic zones (yes, these do exist) to support its transformation into a network state. Once the union obtains diplomatic recognition from at least one traditional state, it can call itself a network state, and start issuing passports to its members.

It may sound like science fiction, but then again, it's been around for a long time: the Order of the Knights of Malta is a proto-network-state that has existed since the Middle Ages, and has diplomatic recognition and its own passport!

Note that everything can be done gradually, allowing us to build our communities slowly and gain experience as we go. At some point, it could be possible to create a real social contract, as in Próspera, for members, which will extensively cover all the rights of members and the services offered by the network state.

There's no need to impose this on all members—it will be possible to propose different levels of membership, for example:

• Free access: gives you access to free online community games and discovery events.

• Basic membership, e.g. €100 per year: gives access to deals negotiated with certain partners, to other events, to reserved parts of the community

• Premium membership, e.g. €2,000 per year: full access to the online community, travel insurance included, VIP events, etc.

• Citizen of the network state: a percentage of income, or a higher membership fee, in return for access to passports, consular assistance, SEZs in countries with which the network state has negotiated agreements, etc. This would give the right to tokens enabling participation in governance mechanisms. This would entitle members to tokens for participation in governance mechanisms.

Yes, it will be possible to have à la carte citizenship—the concept of monolithic, all-or-nothing citizenship will seem irretrievably obsolete. The concept of citizenship could be more fluid than today, not necessarily being permanent, but more like a club membership. It could be understood that you couldbe a citizen of several network states and free cities, and your mobility will be taken for granted and built into the system from the outset. It's understood that you can move to the competition if it offers better value for money.

Eventually, we could envision a network-state for digital nomads, with hundreds of thousands, even millions of digital citizens. It would be possible to educate these citizens to implement the seven flags, to varying degrees depending on the desired involvement, to protect them from their initial nation-state.

Imagine how difficult it would be for a nation-state to take on millions of people practicing the seven flags, and protected by a network-state giving them access to all the services listed in this chapter.

The network state could thus protect its citizen-customers from untimely taxation by training them, but also by negotiating specific tax conditions, and ultimately tax treaties, with certain states. This could increase the network state's bargaining power to negotiate favorable terms with certain states.

In terms of military defense, a network state with a patchwork of terrains all over the world, some fully subject to the laws of the host countries, others semi-autonomous, would have many advantages:

• Land fully subject to the laws of the host countries will be defended by the host countries.

• The same applies to semi-autonomous areas, but the network state could play a more active role in defense.

Above all, losing a territory will not be as important as for a nation-state. The notion of territory for a network state will be fluid, even if some territories will be more valuable than others. Losing a network state's only Free City, for example, would certainly be a major blow. To better protect itself, the network-state can form alliances with Free Cities, other network-states, and certain states, starting with those of similar size—as is the case with Singapore and Israel, both small countries surrounded by potentially hostile countries, and which this common characteristic has brought together to the point where they now have a special relationship and collaborate on the development of many military technologies.

It's also conceivable that some Network States might choose to have no territory at all, and provide their services to all members wherever they may be in the world.

Digital nomads already possess the foundations needed to materialize a network state: a strong collective identity, physical hubs, a decentralized economy and proven digital tools. Their transition from community to proto-nation to sovereign entity is based on a three-stage strategy:

1. Community structuring: Create a digital syndicate with governance via blockchain tokens, cryptographically encrypted membership fees and shared services (insurance, tax benefits, legal support).

2. Geopolitical negotiation: Use the economic leverage of their high incomes to obtain special economic zones, privileged tax status and partnerships with existing free cities like Próspera.

3. Gradual sovereignty: Deploy parallel state services (e-residency, arbitration tribunals, passports) and gain diplomatic recognition by accumulating bilateral agreements and alliances with micro-states.

This process, though ambitious, is based on historical (Order of Malta) and modern (cryptonations) models, adapted to the digital age. The fluidity of their territorial belonging and their global dispersion become assets: a nomadic network-state can implode the traditional link between citizenship and territory, while locally negotiating enclaves of sovereignty.

The real catalyst lies in collective political awareness. By transforming their mobility into a geo-economic lever, and their communities into competitive service platforms in the face of nation-states, digital nomads could embody the vanguard of a new form of governance - decentralized, opt-in, and aligned with the realities of the 21st century.

To explore how nation-states are being disrupted by the Internet and new technologies, and how you can play your part in this new world, feel free to follow me on my Substack Disruptive Horizons, where I publish excerpts from my forthcoming book on the subject.

This essay is by

Olivier Roland

, author of

Disruptive Horizons

. It is part of CITY STATE, a collection of seven writers exploring autonomous governance through an online series and print pamphlet.