Session 12-2: This article is a thread originally posted on Twitter (linked here) summarizing study notes from the Fall 2022 semester of the University of Nicosia’s online course, META-511: NFTs and the Metaverse. Course materials can be found at the UNIC META-511 github account here. The author is not affiliated with University of Nicosia or the META-511 faculty.

1/ Summarizing my notes from session 12-2 of @unicmetaverse META-511 ✍️

This session was a discussion between @punk6529 and @balajis on the Network State, AI, and what the future of the Metaverse may look like.

Decentralized networks will be an important pillar of the world.

2/ Balaji delved into crypto in the 2010s during a time of change.

The GFC revealed what we considered constant was in fact variable (e.g. the value of the dollar), he encountered the regulatory state in founding a company, and saw the rise of the world outside of the US.

3/ Balaji proposes the idea of the Network State, which is something that starts in the cloud as a group of people with a common idea that gains physical territory and eventually diplomatic recognition from nation states. The book can be read online:

4/ A Network State can be approached from 3 angles. You could build from within the existing system, but you would be met with resistance and likely fail. You could build outside, but it may not gain traction.

Or you could build across both, similar to how BTC has grown.

5/ BTC having a USD exchange rate was a key driver of its growth.

As adoption grew, price feeds were placed on Bloomberg, institutional investors took notice, and nation states such as El Salvador recognized it as national currency.

A Network State could follow a similar path.

6/ Diplomatic recognition of a Network State may look like how we currently see dual citizenship. Countries are open for business, as can be seen by Tuvalu and Columbia’s .tv and .co domain deals.

A nation state would benefit from having innovative Network State presence.

7/ If dual citizens of the Network State and nation state can negotiate recognition, the inflow of talent & capital to that region would be very beneficial to the nation state as well.

This need not be in one location, either. The Network State could exist across an archipelago.

8/ Even in the current paradigm of the world, your existing passport must be supplemented with other “keys” to access most parts of a given city.

New York City may seem readily accessible if you have a US passport, but the majority of the city real estate is behind locked doors.

9/ It is our apartment keys, employee IDs, hotel card keys, and membership cards that give access to the private areas within the city.

One way to think about a city is as digitally gated private space. A network state can be comprised of such spaces.

10/ With their corporate locations across the world, multi-national corporations are conceptually similar to Network States, but not at the same level of independence.

Like how the Blackberry preceded the iPhone, there will be iterations before arriving at the Network State.

11/ Balaji views the next cycle of crypto will be less financially-focused, but will have more emphasis on on-chain resumes, decentralized social networks, and decentralized search.

Crypto names, crypto karma, and zero knowledge will be further refined.

12/ When considering the 2030 Metaverse, Balaji views it more to be around AR rather than VR. Advances in AI & graphics will make it more difficult to determine if someone is human or not, or if something is fake or real.

Cryptographic verification will become a vital industry.

13/ In the future there will likely be three pillars of AI that correspond to the three poles of the world, the US establishment (the NYT), the Surveillence State (the CCP), and decentralized crypto (BTC).

The third pillar has the potential to be an open AI.

14/ As AI is expensive to run, an open AI would likely require decentralized funding. Selling NFTs that allow holders to query, or selling fungible tokens that allow a certain numbers of AI interactions is a possible approach.

This opens the possibility to customizable AI.

15/ That’s it for session 12-2!

Its exciting to think how NFTs could one day be the building blocks of coordinating decentralized networks that can rival a nation state. Only a decentralized base layer can enable this.

Materials are accessible below 👇