This is a review of Balajis Srinivasan’s recent post The Network Union.
It’s hard to imagine today’s world without the presence of social media. It has become so integrated into our lives that we often forget what the world was like before Instagram, Facebook or Twitter. When your meal arrived at your table, you simply ate it; when you worked out, there was nowhere to post pictures of your stats; when you disagreed with someone or something, you typically only let your family hear about it at Thanksgiving dinner.
Social media, however, has enabled the development of social networks at a scale that is unparalleled throughout history. We’re always only a button away from FaceTime with close friends or family; just a live video or an Instagram story away from reaching our followers; one tweet, and everyone gets a snapshot into our minds at that instant.
We’re no longer limited to sharing our thoughts, beliefs and ideas with only those in our immediate social networks; we can now share with the world at large, if we so wish.
Existing social media platforms, however, are typically only used for surface-level purposes, such as messaging, photo sharing, online marketplaces, or raising awareness of current affairs. There’s a reason as to why we limit social media to our lunch breaks or our personal time. Generally speaking, they aren’t all that productive in advancing our own lives or anyone else’s for that matter. That isn’t to say that they couldn’t be used for more, it’s just a matter of public perception on how they should be used.
But what if they could be used for more? What if we could combine the productivity of something like a corporate network with the scale of a social network?
Networks at Scale
Well before social media was embedded in reality, the British anthropologist, Robin Dunbar, first proposed what is now referred to as ‘Dunbar’s Number’. What this number represents is the average number of meaningful relationships that different primate groups can sustain, based on the size of their brains. For human beings, that number is around 150.
Despite the expanded reach of social media, It’s likely this number still holds true, given that it represents the number of meaningful relationships that an individual can sustain at any given time. For example, Kim Kardashian may have 221 million followers on Instagram, but it’s very likely that the group of people she would consider her immediate social network remains at approximately 150.
This is more obvious in something like a corporate hierarchy. Jeff Bezos doesn’t have the bandwidth to maintain relationships with all of Amazon’s 1.3 million employees, so he hired executives, who hired VPs, who hired directors, who hired managers, who hired employees. But, despite the fact that not everyone has meaningful relationships with everyone, Amazon delivers on its promises. Things continue to move forward and their business continues to grow and thrive.
This is because Amazon — along with Apple, Tesla, Microsoft and Google — are the apex of corporate networks. The vision of the founders who built these companies is realized through the network they developed over time. Everyone that works at each of these companies bought into what they stood for and, as a result, has contributed to their success in some manner.
Corporate structures can achieve the level of productivity they do because of clear direction from leadership. A thousand engineers can build something truly innovative based on the vision of a competent leader. These peer-to-many networks are a key driver of purpose-driven innovation.
Peer-to-Many > Peer-to-Peer
When Mark Zuckerberg created Facebook in 2004, it’s very unlikely he predicted what the reach of his creation would be. Facebook — and all social media, for that matter — changed the structure of our social networks.
‘Friends’ no longer referred to one’s close knit group of peers; followers were not limited to those who knew someone on a personal basis; communities had no physical borders, and groups had no entrance requirements.
Over the past two decades, social media adoption has increased from five percent of American adults in 2005 to nearly seventy-two percent in 2021. This means that nearly three-quarters of all Americans (let alone the rest of the world) are currently being exposed to an online social network at varying degrees.
Never before has it been so easy to gain exposure to others at such a scale, where someone can share their ideas with 1000 ‘friends’ or 100,000 community members with a click of a button. Our ability to interact and engage with people who are similar to ourselves has become increasingly simpler.
But at this point in time, we’ve only scratched the surface of online community building. We join mountain biking groups on Facebook, or World of Warcraft forums on Reddit. We subscribe to food and travel blogs and follow our favourite celebrities on Instagram. The power of social media has transformed what was originally a mostly peer-to-peer society and turned it into a peer-to-many society. One person posts an invite on that mountain biking group and all active members can respond; one celebrity posts a fitness workout on their Instagram page and all of their followers are doing squats later that day.
Our individual reach has expanded well beyond the social horizon that was previously defined by Dunbar’s number. However, up to this point, we have not used this reach for anything more than simple interactions that have little to no impact on any other aspects of our lives.
What this results in is a powerful social network that lacks any truly meaningful purpose. However, with the power of peer-to-many networks now at our disposal, along with the rapidly developing infrastructure required to support a decentralized, digital economy, and the incompetence shown by our elected leadership, the emergence of meaningful and productive social networks is the obvious next step.
Combine Scalability and Purpose
Like large corporate structures, social media has enabled us to organize our social networks in a manner that accomplishes something productive without having to maintain meaningful relationships with every member of our network. For example, if someone has 500 friends on Facebook and they decide to start a GoFund me page for a cause they believe in, they can have all 500 of those people (and more, if any of those 500 decide to share the post) view it without having to be in close relationships with all of those people.
Today, social networks are powerful, but their full potential has yet to be realized. They’re currently limited to online communities, influencers and Facebook groups. They are capable of being used for something greater, but do not yet possess the purpose.
With decentralized social media platforms beginning to take-off, combined with an emerging decentralized economy and a deteriorating trust in our governing institutions, it should not be a question as to whether we should use social media for the progression of a more technological, healthy, educated and fair society, but when and how.
Balajis Srinivasan (@balajis) recently published a post outlining an idea that seems so powerful, yet so unrealized.
Network Unions are what he has described as “a global, mobile social network with an integrated blockchain and an explicit backlink structure, capable of collective bargaining with giant corporations and states alike. It is a check on the power of both concentrated capital and political capitols.”
In other words, Network Unions are social networks that are governed by a decentralized economic system, a clearly defined hierarchy of network leadership, and consist of members who share a common set of beliefs and who are willing to invest their time, capital and energy into advancing the network to which they belong.
Network Unions: The Establishment of Purpose-Driven Social Networks
Social media platforms have the capability to be more than just arenas for competing attention. With well-established peer-to-many networks, they can be used to coordinate purpose-driven communities — Network Unions — at scale.
Network unions will have a similar foundation to typical online social platforms, such as communities, individual social media accounts, forums, etc. They are started by an individual (or a small number of individuals) who are interested in sharing their ideas; based on the ideas and legitimacy of the founder(s), others will join the community (or, similarly, follow the individual) and participate in various manners. Some will be more active in the development and sharing of the ideas, whereas other will be more passive in the community and simply observe and accept the propositions made by others.
However, what I’ve described so far remains superficial. In existing online communities, most members who participate will make minimum contributions to the community and the distinction between what goes on in their lives (i.e. their careers, the economy, politics, school, etc.) and what goes on in their online community will be obvious.
With Network Unions, that distinction will begin to disappear.
Instead of participating in the community and then returning back to their ‘normal’ lives, members will be able to establish their lives within the online community. Freelance work can be posted by members and contracted out to others; entrepreneurs can recruit and hire qualified members to their companies; goods and services can be provided and purchased with a native currency built on a general-purpose blockchain, such as Ethereum or Solana, and education can be obtained through peer-to-peer learning services, online lectures, tutorials or workshops.
Network unions will become communities of shared values, governed by qualified leaders and free-market economic policies, and advanced by individual contributors.
Leadership of Network Unions
The premise of his post was that inheriting an institution often resulted in unqualified leadership, whereas founders who led their own companies or institutions were typically the most qualified to lead them. No one questions why Elon Musk is leading Tesla and SpaceX — he created them.
Inheriting a social network is possible in today’s world, but only in the most impractical forms. For example, the child of a celebrity may only ever be known relative to their parent, rather than for their own accomplishments. However, inheriting a productive and meaningful social network is far less likely (albeit, still possible).
Since heirs are unlikely to lead a Network Union, we can reliably count on determined and passionate founders to carve the path forward.
With respect to social media, someone who creates an online community, such as a Reddit forum or a Facebook group, could be considered a founder. Similarly, someone who establishes a large following on Twitter or Instagram could be considered the founder of their own digital platform.
Founders (or, in the context of social media, influencers) possess legitimacy. We follow them on social media because they share interesting ideas and hold beliefs that are similar to ours. They have a large social network that coordinates itself relative to the person who is at the centre of the network — in this case, themselves.
Balajis describes this legitimacy in terms of backlinks — also known as inbound links — which are links from one webpage to another. For example, if someone adds a hyperlink to an article they are writing, then they would be creating a backlink to the URL associated with that hyperlink. Popular URLs have a large number of inbound links, relative to their number of outbound links; in other words, popular URLs are constantly being referenced. This referencing creates links to that URL, which are a measure of the value being provided by that URL.
This can be used as a model for Network Union leadership; as Balajis explains: “Backlinks allow us to quantify a leader’s support base. Every leader has individuals that support them. Some of those individuals in turn have other individuals supporting them. If we treat each expression of support as a backlink, if the asymmetric act of merely choosing to follow someone is turned into the asymmetric act of choosing to follow their direction, we can summon an immediate mental visual of a digital leader’s support base.”
As is the case with founders of companies, it would make sense that the individual(s) who creates the network union is the one who leads it. After all, the initial members will be attracted to the ideals of the founder(s), rather than the idea of a community. Since the founder is the one who first instigates the community, they are also responsible for defining the social structure, such as who should be allowed into the community, how ideas can be freely shared between members, establishing the community’s growth plan and ensuring the security and stability of the community.
With a clearly defined leadership structure, network unions can operate more efficiently — similar to a startup. The first members will help shape what the community is trying to achieve, based on the vision of the founder. As the community continues to grow, relationships between the founder and the majority of members becomes akin to the relationships between a CEO of a large corporation and employees on the frontlines; they aren’t personal, but without a competent CEO orchestrating and manifesting their vision, those on the frontlines won’t get far.
A great example of something that has already taken the form of a network union is the Ethereum Community.
Vitalik Buterin — the founder of Ethereum — first explained the concept of a decentralized, general-purpose blockchain in the 2013 Ethereum Whitepaper. Early adopters then began to expand the capabilities of the Ethereum protocol; as time went on, the community of developers, podcasters, bloggers and entrepreneurs has grown at an exponential rate. Ethereum is now a completely open-source, general-purpose blockchain which supports more than 3000 decentralized applications. It is the second largest blockchain by market cap at this time and has a clear roadmap for the next decade. Members of the community work and participate in the community at large, with the circulation and development of ideas acting as a foundational pillar of Ethereum’s success.
Economic Structure of Network Unions
One of the primary reasons social networks have been limited in their ability to scale up to a full-fledged network state is the lack of a scalable digital currency that can be used independently of any given nation state. If a social network was started for the purpose of initiating a new network union, but could only use the U.S. dollar as the network currency, then the U.S. government would have total control over the network union’s ability to transact among members. If the network union had any plans that opposed those of the U.S. government, then they could be shut down immediately.
Fortunately, blockchain technology — specifically Ethereum — has made advancements in scalability, while maintaining a high degree of decentralization and security.
With a scalable, secure and fully decentralized platform to build a currency on top of that is native to their own network union, all members will be able to earn, transact and invest tokens with other members and businesses within the union.
Until basic necessities like groceries, home insurance or clothing are offered within the network union, people will still have to consume these products using fiat currencies. Luckily, members of the network union can exchange their native tokens for ETH on a decentralized exchange (which itself could be native to the network union) and then use that ETH to purchase U.S. dollars (or equivalent fiat currencies) in a relatively simple manner over a centralized exchange.
This would ensure that the majority of members’ lives could be established within the online network union but, if needed, they could also operate with their token earnings/savings outside of the community as well.
Since tokens in the native currency would be distributed to each member upon joining, with a concentrated amount being allocated to the founder(s) and initial members of the network union, members will be able to earn tokens in exchange for providing services. Instead of a marketplace to sell used goods, such as the Facebook marketplace, network unions would have a services marketplace, where members could hire other members as part of a high-functioning gig economy. And for those not interested in freelance work, entrepreneurs could share job postings for roles within their startups that other network union members could apply for. The employees could be paid in the native token and then use their earnings to purchase their own goods and services using the same currency. This would ensure a constant circulation and re-investment into the economy of the network union.
Crowdfunding of public goods that can be shared across the entire network could also be established. Similar to how apartment blocks will typically collect strata fees from each resident, members of network unions can propose a public good that they require funding for. If the proposition is sound, and others are aligned with it, then members share the cost of the funding. For example, if someone proposes a digital library where members of the union can rent out e-books directly to their smartphone, and other members agree with the value in this proposition, then the cost of purchasing the e-library can be shared across all members.
Scaleable social networks with clearly defined leadership structures, combined with scalable, secure and decentralized currencies could — and likely will — accelerate the transition from government-regulated states to sovereign, founder-regulated states.
Network Unions are the Precursor to Network States
The world is becoming digital. But that doesn’t mean network unions can’t be manifested in the physical world. However, network unions do not possess the scale on their own to be considered sovereign nations. That would require network unions being scaled to something bigger — network states.
But before networks states can be realized, network unions must first gain legitimacy. This will require founders to first initiate and establish an online social network that is structured to support a sovereign community. Once the community reaches a certain threshold of productivity and scale, the next step will be to transform what was once a lowly network union into a full-scale network state.
This will require a legitimate currency that powers a sound economy, a leader who is willing to coordinate a migration of that scale and an overall buy-in from all members of the network union. When the migration begins, we will start to see the beginning of startup cities; that is, mass migration to physical locations, while the values and vision of what built the online network union are maintained.
The future will be different than we can currently conceive. Network unions — and eventually, network states — will become the players of the future. Trade, governance and education will transition from the heirs who are currently in charge to the founders who will architect the future.
The time has come to no longer hold on to what was, but to embrace what is to come.