Balaji Put His Money Where His Mouth Was

Balaji Srinivasan (often just Balaji) probably won’t like hearing this, but he’s part of the media. Last year, Srinivasan, a bio-science entrepreneur turned Silicon Valley mogul, wrote a book that was this year’s topic of conversation.

“The Network State,” published independently and available for free online, makes the case that online communities can coalesce to operate a bit like countries. It’s an advancement of a theory Srinivasan has been putting forward for years: that today’s dominant institutions are eroding from the inside, as power and influence becomes increasingly distributed through network technologies (i.e. the internet, social media, cryptocurrency, etc.).

This profile is part of CoinDesk’s Most Influential 2023. For the full list, click here.

Amid a banking crisis in early 2023, Srinivasan took a highly publicized bet that the U.S. dollar was teetering on collapse. Within 90 days, he wagered, with $1 million on the line and left-leaning economist James Medlock taking the other side, that bitcoin (then worth less than $30,000) would be worth $1 million.

For better or worse, but mostly for the better, Srinivasan was wrong and the U.S. dollar did not enter into hyperinflation. When the bet settled in May, bitcoin was down roughly 3% since the day he made his prediction, and indicators signaled that the Federal Reserve had begun to cool an overheated economy.

As is often said of Donald Trump, many took Srinivasan’s bet literally but not seriously when perhaps it should have been the other way around. He explained at Consensus 2023 that he saw just a 10% chance of a “fiat crisis” happening in months, a 70% probability of it happening in years, 19% in decades and 1% in centuries. Even 10% was high enough to his mind to sound alarm bells; betting a nontrivial amount of money was a “costly signal” he was not crying wolf. Angel investor Julie Fredrickson suggested Srinivasan was trying to widen the Overton window, the range of ideas it is acceptable to discuss.

And Srinivasan has been right about big things before. Most notably, in early 2020 he rang the alarm that the novel coronavirus blazing through China could become a global crisis, at a time when many people were either unaware of the risks or calling it bigoted to take safety precautions.

It was a prediction that caused a tussle between Srinivasan and “the media,” which he saw (and still sees) as a monolithic institution that is woefully inept and complicit with the powers that be. That fight has an even earlier origin, and has been a favored topic of his for about a decade – ever since he gave a controversial lecture, “Silicon Valley’s Ultimate Exit,” in 2013.

While critical of mainstream currents, Srinivasan is a believer in communication. He went on countless podcasts this year to promote “The Network State,” so many that there’s a joke following him around where he’s asked if an hour is enough for him to make his point. Srinivasan can speak at length extemporaneously, and is generous with his time.

Whether or not you agree with them, Srinivasan’s ideas have spread, particularly in the California-based tech scene he left behind to live in Singapore. Some are philosophical (like how people of different abilities and temperaments naturally sort themselves online), others practical – like the importance of controlling your money, via crypto, and using privacy-preserving tools, such as the Signal messaging services.

He also advocates, for instance, in “going direct” by disseminating information via your own or friendly channels, and taking a code of silence in speaking to journalists. Another figure on CoinDesk’s Most Influential 2023 list, a compadre of Srinivasan’s, refused to speak on the record for their write-up, in part influenced by Srinivasan’s views of the media. (For the record: Srinivasan did agree to participate in the Q&A below.)

Publicist and influencer Ed Zitron said the stereotypical tech bro’s distrust of the press might come from a “change of tech coverage from enthusiast to industry-focused,” meaning a greater level of “scrutiny.” It is possible both sides – “tech” and “the media” – have the wrong perception of each other.

But Balaji’s war is bigger than just butting heads with the hundreds of thousands of scribblers that comprise the media. He believes in software and other technologies’ potential to free individuals from the limitations of governments and geography. In other words, he believes in the Network State.

What was your biggest achievement this past year?

Holding the huge Network State Conference 2023 with 1,000+ attendees and standing room only. We mainstreamed the concept of starting new countries with 40+ speakers including famous people like Glenn Greenwald, Vitalik Buterin, Garry Tan and Anatoly Yakovenko – as well as the not-yet-famous founders of a dozen plus startup societies from around the world like Culdesac, Prospera and Cabin.

Some tweets so you can see how packed it was:

What’s your No. 1 goal for 2024?

If the apotheosis of AI is to build a new god, the apotheosis of crypto is to build a new state. Towards that end, I feel I’ve helped lay down some of the initial concepts over the last 18 months. Now, I want to turn the network state into a more structured global movement, with defined progress metrics.

Please give us a prediction for crypto next year.

The only thing more important than starting new currencies is starting new cities and countries. By the end of 2024, I hope to see multiple startup societies and aspiring network states with 1,000+ in-person residents.