A friend of mine is really into seasteading. He’s so frustrated with the status quo that he wants to build a floating continent in the middle of the ocean. Inhabitants of this continent would be free to start any society they want. Alice’s society could be classically conservative, Bob’s could be classically liberal, and Chad’s could be organized around doing squats. The only rules are no inter-society violence and inhabitants are free to move from one society to the other.

As far as I can tell, my friend has thought of this system largely independently, but he’s not the first to propose such a society. Neil Stephenson imagines a universe with these diverse societies largely respectful of one another in The Diamond Age (1995) and Peter Thiel championed the benefits of efficient competition in governance around the time of subprime mortgage crisis (~2008). The motivation for “seasteads” are simple and attractive: wouldn’t it be better if everybody was free to create or join the society they want to be in? Wouldn’t an efficient market for forms of societies enable that?

The answer it seems is maybe and only if all the societies agree upon some universal rules.

Scott Alexander of the excellent Slate Star Codex covers this in “Archipelago and Atomic Communitarianism”. He imagines that a wizard appears and creates a brand new continent for people to create and find their ideal societies–societies that can be organized around whatever at all. But the wizard quickly realizes that the continent needs some universal rules to make the system work.

Rule 1. No war

Rule 2. No externalities (e.g. causing gobal warming)

Rule 3. No memetic contagion (e.g. if Dan’s society has rules against broadcasting human faces, then Eve’s society cannot broadcast faces at Dan’s society)

Rule 4. No limitations on leaving a society to join another one

To enforce these rules, a “UniGov” must be established. Every society pays taxes and contributes military resources to the UniGov which exists solely to prevent individuals and societies from breaking the rules. Scott imagines a benevolent UniGov. I’m skeptical, but let’s assume the UniGov itself is not problematic for the sake of the thought experiment.

There are many other reasons this effort is impractical. To start, nobody has found a qualified wizard to kick this off. Then there’s handling all the corner cases of the four rules. And finally, preventing intervention by external entities (e.g. the United States, aliens).

Enforcing the four rules gets complicated very quickly. Borders are useful to contain laws and people, but not as useful to contain, well, everything else. If Frank smokes pot on the border of Grace’s no-pot society and wind blows it across, that’s a violation of externalities. It’s not fair if Daniel Plainview extracts petroleum from a reserve that spans both his and his neighbors societies1.

Scott’s imagines that the UniGov handles all these corner cases by ruling on what is and is not a violation. I can’t help but conclude this turns into amendments, more rules, and a more powerful UniGov. Now I think the UniGov is problematic.

And what of the outside world? Even if the wizard’s continent behaves perfectly, the UniGov cannot prevent Belgium from launching nukes or broadcasting unsavory images at the continent.

Because of these problems–no wizard, reliance on the UniGov, and external interventions–the wizard continent is impractical.

Scott concludes by suggesting that purely digital archipelagos are more practical and already taking shape. We naturally find corners of the internet where people like us hang out. And because we are migrating more and more of our lives online–identities, communications, value–perhaps it doesn’t matter so much that our physical societies are perfect for none. Anecdotally, this feels correct. I feel much more at “home” with my online communities than my physical communities and expect this gap to widen over time.

Maybe now is a good time to bring in crypto.

The problem with today’s digital archipelagos is that they’re constructed upon the rulesets of the few companies that own the internet. In Scott’s wizard society, a UniGov enforces a set of rules designed to encourage free, peaceful competition between societies. On the internet, the wizards are Mark, Sundar, Jeff, and Xi, and they created a set of rules to keep users inside their societies. Yes, sub-communities can form but they are fragile, as we can see from the deplatforming of Alex Jones (he’s a horrible man but a great example) and the recent censorship of Gab. And extraneous to the internet are the many governments and agencies that enforce their rules on the wizards of the internet.

The ideology of public-blockchain-based systems is free and open. Together, free and open mean that users can do what they wish, participate without permission in ways that are resistant to censorship (which can require high degrees of security and privacy).

Public blockchains satisfy the rules of the wizard’s continent without requiring a UniGov. Value is allowed to freely move from one public blockchain to another. And by and large, war, externalities, and memetic contagions are not concerns because public blockchains operate autonomously and independently2.

More importantly, these networks can resist the influence of external forces 3. While we rely on an internet infrastructure vulnerable in some ways to government tampering or censorship, there are already ways for transactions to happen via mesh networks and satellites, which allows these public blockchain-based archipelagos to freely compete with one another with minimal intervention.

I don’t see crypto as a sudden, massive disruption of the establishment. I see it as a tiny continent in the middle of the ocean composed of spontaneously appearing and disappearing archipelagos all competing for inhabitants4. If one day, most of the world decides they’d like to live on these archipelagos, great. And if everybody decides one archipelago is better than the rest, wonderful. But even if a lot of people don’t want to or cannot move to this continent in the middle of the ocean, I’m still glad it exists.