Decentralized States: Governance, Traditions, Faith and Nations

Part 10 of 12 — Blockchain: Decentralization of Money, Power and the State Originally written as a History BA thesis, academic year 2021–2022. Published online August 2026. Series index → · References & bibliography →

Decentralized states

When multiple social or ideological systems have competed and opposed each other in the past, it has never been good for those who lived through that time: wars, embargoes, sanctions. The possibilities for two powers to harm each other are manifold. What might be possible in the future with decentralized states and organizations would be to have social systems with different rules that coordinate with each other in virtual space, while in physical space people go on with their lives. A collection of people holding the same type of currency, such as Bitcoin, could be considered as the people of a decentralized state. Virtual communities of users could then use their funds to finance physical activities, to buy land and live in places where they can enforce their rules. This kind of activity is well described by Balaji, former CTO of Coinbase (one of the largest centralized exchanges), who in his book, The network state, explains how to create a decentralized state.43 The shift from a centralized, centralizing state to a reality in which decentralized states can exist changes many of the cards at stake. Being able to choose between different states, while remaining physically in the inhabited place, one would choose the most suitable one. Do you want a state in which the currency expires every month? Or a state where one is paid to study? The possibilities are many, and it is possible to imagine, among the different decentralized states, competition similar to that between companies operating in the free market. Each state would try to get more citizens and keep the ones it already has, as is also the case with current states. These decentralized states would not function hierarchically like centralized states, but would have multiple systems of coordination and would feed off feedback and the (anonymized) data of users, who would continuously send a kind of cahiers de doléances to their respective states-general, who would correct the code underlying that society/state. Of course, the process would remain bottom-up only in the case of full logical decentralization, since for the collective application of a rule there is a need to update one's own node with those rules: where this is not done, a schism (fork) would form. An interesting feature of the Internet of Value is that it allows for the measurement, in an extremely meticulous way, of all those relationships between human beings that are not currently conceived of as strictly economic in nature. Looking at a picture, running in the park or socializing with people could be considered activities with a certain value. One's choice of one social system over another would be influenced not only by one's political and ideological thinking, but by data, numbers and graphs, which would show what the opportunities are for living in a given blockchain ecosystem. The 'invisible hand' would therefore no longer act only on the economic system in the strict sense, but on the entire social structure. It would be people choosing whether to be in a society where more is produced or one where they have more time to socialize. Of course, as this is already the case with centralized states, it would be possible to be citizens of more 'decentralized states'.

Blockchains allow human beings not to know each other, but to trust each other and live side by side. In practice they enable what is already the task of money today, but they do so with the help of digital, which allows such speed, and also adds so many variables, that what was previously inconceivable is possible. Make no mistake, however: human history is made up of clashes and wars, and to think that a group of people can break away from their state, thus taking away their labor power and substantially deteriorating the status quo of those at the top of the political or capital hierarchy, is a noble naiveté. Regions in a state that demand independence are usually not accommodated by the central power.

There would indeed remain, in the Internet of Value, power tied to information: even as a result of a redistribution of wealth, yes the balance of power would change, but how much? Would information cease to serve power, even as it ceases to exist as we now know it? Power evolves and so, in a country of equals, those who have the ability to get on stage and convince the crowd gain power, today as in ancient, democratic Greece. Those who have a following of people (followers) will have decision-making power, just as today this is determined by capital. The power to inform and influence people in the Internet of Value will be decisive for the leadership of projects carried out by entire virtual communities.

Governance

Governance, understood as the ways in which currencies or states are governed and regulated, would see its existence in mixed systems-just as it does now. In a social system based on ultrafast communication between individuals, what would change, where in the presence of hierarchical systems based on the ability to disseminate information, would be the speed with which these systems could change. History, in fact, undergoes acceleration at the very moment that human interactions become faster and more efficient. The logical progress for which technology has merit, and which enables the use of computing devices, is based precisely on the speed with which information can be transmitted between human beings. It is an inevitable progress, in which human beings remain the same, with the same needs and instincts, but in which the results of their actions are more effective precisely because of the elimination of all those physical (or imaginary) obstacles that impeded the transmission of knowledge. In the era of collaboration, where what is virtual is constructed by everyone and what is real is logically connected to what is digital, the boundaries between one and the other blur. What were once simply communities-that is, communities of enthusiasts who met virtually in chat rooms, forums, newsletters, etc.-will have a way of evolving in the new paradigms of governance. Those who will have an interest in learning more about social systems, in contributing to the planning of life in the polis, in discussing decisions that would be appropriate to offer to the population of which they are a part, will be able to do so. One will have the opportunity to propose a certain action, a certain idea or a certain policy program. Not an imposition, since imposition would be subject to forking, that is, a veto: there is a need for consensus, consensus will be sought, and it will come from joint actions: first, the active participation of several people in the same project: in which everyone is free to contribute ideas, active structuring, criticism or other kinds of help; second, consensus will have to be sought by decentralized organizations promoting themselves to an ambassadorial role for conflict resolution.

In philosophical liberalism, ambassadors are also subject to the invisible hand of value. Ambassadors who promote actions that are unsatisfactory to the people, that is, nonconflict resolution, would be immediately delegitimized by other competing groups of ambassadors, who would act in concurrence. Being an ambassador, engaging in dialogue with others, would not be the prerogative of one class or class, in fact anyone could do it. It will be enough to have an idea to be able to propose a solution, that is, a contract: the language, however, will have to be cold. Articulate language such as ours, used for a contract, would always be susceptible to multiple interpretations that, in practice, would end in the interpretation of the strongest. New organizations for local and global governance will have ways of relating to each other fluidly, sometimes blurring. The physical decentralization of human beings would become collaborative centralization, in which the intellectual resources of individuals scattered around the globe can contribute to the solution of common problems, whether they are local and of small impact, or problems that instead involve all of humanity. Cultural difference would be respected, as the consensus method, not the majority method, would allow everyone to express themselves. The consensus/veto method, which is extremely slow in analog reality, becomes fast in digital, and will be expressed through pools of individuals interconnected with each other: the network will be the new governance. The role that artificial intelligence will play should not be underestimated: it could act as an actress in forming majorities, in communication between multiple centers of governance, in order to highlight commonalities or divergences. It is critical that it be open source and decentralized, and that every process be freely available for consultation. It is equally important that there be awareness and culture about what an artificial intelligence is and how the technology works: there will always have to be human mastery of decision-making processes. Where this culture is lacking, we will again witness dark times of faith and superstition.

Digital traditions

What makes people feel united under one flag or symbol, united by one religion or state? Customs, having similar ones, being understood by those around us, adopting the same language, are undoubtedly important reasons; however, language is also made up of traditions, gestures, rituals, and a whole body language understandable to those who are part of that whole. In recent years those inhabiting the digital world, the netizens, have invented dance steps and entire ballets, coining endless terms and traditions. On social media, there have been viral waves of content, which have not only managed to spread among people, but have changed the conception of what networking is, transmitting fun and passion to billions of people.

Perhaps a very famous example is the so-called Harlem Shake, which is a kind of dance, lasting several dozen seconds, in which participants play characters, but maintain the spirit of the original ballet. This is done by following certain canons, for example there is always a person with his face covered by a box or helmet. The reaction it has caused has been remarkable, with hundreds of thousands of people participating in the initiative. On TikTok this happens on a daily basis, with more or less significant viral waves. It may seem, in the present, to be a simple episode due to new technologies and the advent of new habits: but habits soon become traditions, and these contribute to the creation of a people, a nation or a state. Religious holidays, replaced or supplemented by civil holidays, are now replaced by the impulses of the Net, by what is current and fun; the dances that are depopulated on the Internet are then replicated in places where people dance, such as discos. It is a process that began long ago under the name of 'globalization' and is now, thanks to technology, contributing to a process of centralization and decentralization at the same time. The centralization of habits, tastes and fashions, influenced by American media hegemony, is decentralizing (or spreading?) to the territories of other nations. If the two world wars contributed a great deal to the formation of Italian mass society, as they allowed people from very distant places to fraternize and bond, it is evident how these Internet ballets are also formative in what concerns one's own identity and that of the 'other'. The foreigner, the one who is outside national borders, becomes a person like us, who enjoys dancing and with whom it is possible to interact and play.

It would be foolhardy to infer that because online ballets exist, then a decentralized state will exist; more reasonable is to see how geographic distance no longer necessarily affects daily habits and gestures, allowing the realization of relationships pregnant with cultural meaning and constituting a sense of belonging to something, neither more nor less real than what states, religions or ideologies are.

The concepts of centralization and decentralization blur with each other. Already Toqueville reflected on how the French Revolution, which should have led to decentralization, ultimately turned out to be centralizing.¹ In blockchain, decentralization occurs in the form of multicentralization.

Question of faith

Human beings have, for as long as we can remember, had the habit of believing in something. Whether this happens by tradition or instinct is unimportant: so many things are difficult to understand rationally, and the supernatural, regardless of whether it exists or not, is an easy explanation for many everyday phenomena that human beings witness. The ancient Greeks possessed a whole pantheon of gods, each specializing in something; the Roman world, which took so much from the Greeks, was also prodigal with gods. In the imagination of the time, a prayer, addressed to the right god, was enough to solve the problems of the time: infertility, poor harvests, disease, etc. Not much changed then with Christianity, which was yes monotheistic, but soon saw a propagation of saints and holy men, until there was one for every occasion. The last two centuries, marked by extraordinary technological progress, ideological development and the advent of the liberal bourgeoisie, are often referred to as an age of religious regression. The Catholic faithful are fewer than in the past, and the Church is no longer that institution which, in addition to religious power, can claim temporal power. Where, then, has gone that need, whether innate or social, to believe in something and to exercise a faith? Faith, however, can be ideological: believing in a different future that will come to pass, like a premonition dictated by an oracle. The revolutionaries who populated history were dissatisfied with the present and looked to the future, aspiring to a different system that rarely saw the light of day. A fideistic attitude appears even in the small things: thinking about tomorrow, about things to do for work or studying for an exam, means having faith that there will be a tomorrow, a job and an exam; it means believing that one will still be alive and that everything will proceed as it always has. It is around these certainties that human beings build their worldview or, in an anthropological sense, their cosmology. Entire social systems have been built on trust and faith: feudalism itself was, in its beginnings, based on mutual trust between the king and his vassals. These exercised temporal power on behalf of their lord and were confident that, in doing so, they would be showered with privileges. Faith is also accepting, in the present as in the past, slips of paper in exchange for goods or labor: there is always the certainty (or trust?) that those slips of paper are a store of value because other people will want them. Instead of believing in a deity who can meet human needs, here is believing in the banking system, in the state that will assure us of private property, or on the very fact of having a long life is a symptom of faith.

What is believed in in the present? Accrual of products for the masses, a phenomenon that began quite some time ago and that, thanks to the extension to the digital services sector, such as the various subscriptions to streaming movie services, music-but also telephone subscriptions, or subway subscriptions, etc. - has seen a further parceling out of the fees payable. One wonders, finally, what is property and what is service. Most of the more technologically developed societies already provide these kinds of services, which are linked to bank accounts and withdraw a small trust fee monthly. It is these trust flows that sustain the system in which we live, that ensure that it remains, on balance, stable.

With smart contracts, i.e., self-activating digital contracts, it will be possible to surrender our trust very easily, in a parceled and continuous manner, with no possibility of withdrawal. What is written in the smart contract will be forever and forever it will work according to the established rules. If in the past we prayed for health problems, if in the present we go to a doctor or pay for insurance, with smart contracts it will be possible to take out medical insurances that, however, because of their decentralized nature, will look very much, technically and conceptually, like medical subscriptions. It will be possible to express trust through continuous flows without intermediaries, in the areas that seem most appropriate. If this already resembles the current world, it is because the system is the same; what will change is the speed.

Gods and goddesses

New applications of the technique create new problems: one example is the deep fake, which is a technology that makes it possible to create hyper-realistic videos from certain images. The protagonists of the videos speak and move like real people: this opens up puzzling and somewhat dangerous scenarios. It is now possible to create videos in which leaders of great powers say what you would like them to say: the line between what is real and digital is increasingly bound to blur. It is true that, even in the past, there have been major forgeries: the Donation of Constantine is perhaps the most famous example, and the isolated cases are the discoveries of forgery and not the forgeries themselves. There are already special technologies to recognize these digital manipulations, but in the future it will be increasingly difficult to distinguish what is true from what is not. Very realistic image generators of people who do not exist are, for example, already within everyone's reach² .

As scientific and medical research proceeds, with the intent of lengthening-not improving-human life, other types of research see human-machine symbiosis as the way to lengthen life, albeit in a troubling and dystopian way. The intent of these researches is to save a snapshot of our minds on a physical medium such as a hard drive. The snapshot can then be used again on a younger body. Until a few years ago this was the stuff of science fiction books; nowadays enormous resources are being spent on this kind of research.

In some museums there are screens where historical figures such as Dali are reproduced thanks to artificial intelligence systems³ : the public can interact with them, talk to them and finally take a selfie. These attractions are harmless, used to spread culture they have the only risk of trivializing a character; what would happen, however, if it were possible to transport the mind of a human being on the net? It would be animated by an artificial intelligence and appear to be alive and sentient. Is the thought that a hyper-realistic representation could be truly animated, that is, that it could possess a soul and sentience a remnant of a positivism in which we are still immersed? Indeed, a peculiarity of the positive sciences is to regard as existing what has been scientifically demonstrated and discovered, ignoring the rest as unknown. However, this view, which has made it possible to make great strides in science and technology, makes us partially blind, in that what has not yet been discovered also exists. Human beings' belief that they are better than those who have gone before them, and the ease with which they allow themselves to be hypnotized, make the future an uncertain place. The need to believe in something, to have an explanation of the cosmos, whether rational or not, on which to rest our beliefs will certainly not disappear with the adoption of a new currency. Floating minds in the ether could be new virtual citizens, immortal and omniscient: a linear evolution of the bots that have been present in the chats of various social networks for some years. These bots currently perform specific functions, such as reducing spam, welcoming new users, or can be consulted for specific information. In the near future, everyone will interact daily with these entities as if they were sentient beings, perhaps increasingly confusing what differentiates humans from machines.

The great legislators

Both Athens and Sparta saw the presence of some great legislators. People who constituted and built the civic system of the two polis. Draco, Solon, Lycurgus, and Clysthenes: each introduced innovations so important that they revolutionized internal relations among the citizens. It is likely, however, that the greatness of these figures was magnified after the fact, with the intent of legitimizing the legal system in use, and thus with the intent of defending a status quo.

What is happening with the figure of Satoshi Nakamoto is beyond interesting, because a kind of myth is being created. As has already been mentioned, it is not known whether he is a single person or a team, and even the investigations that have been conducted have not yielded satisfactory results. There have been for all intents and purposes studies of the sources he left us 47 , namely the early emails in which he was comparing himself with other people interested in the subject, the Bitcoin whitepaper, and comments written on the code itself. It is possible to find these studies online that could be described as historical in nature, although they were carried out by enthusiasts of the subject, often computer scientists. There is research that has attempted to reconstruct the dynamics of Bitcoin's early days, from the creation of the first block (the Genesis block) onward.⁴ Interestingly, some of the clues left in Bitcoin's code make it look like a response to the 2008 bubble. Instead, analysis of the comments to the code (which is used by the programmer to describe what the code does so that it is understandable, at first glance, to other people) allowed stylometric analysis, which, however, did not lead to the selection of any particular individual.⁵

What will happen to the nations?

When Abbot Seyes wrote the famous words: "What is the Third Estate? Everything. What has it been so far in the political order? Nothing. What does it desire? To become something," referred to the absolute lack of political clout that the Third Estate, that is, the majority of French citizens, could exercise. The rules of the game were not turning in their favor: in order to survive, the decision was made to break away and found the Constituent Assembly, in which the Third Estate was finally the Everything it had always wanted to be. What makes one think is the ability there was to change the rules that held those people together, going on to found an alternative to what were the old institutions. There was formed, because otherwise this could not have happened, a form of consensus among the members of the third state: the rules had changed and were accepted by a good majority. This ability to reorganize and adapt, to find new solutions or majorities, could be further facilitated by blockchain: in a world where decentralization is applied, one could choose the blockchain ecosystem in which to live, that is, the social contract to be signed. One would eventually have to follow the directions and rules specific to that ecosystem. Already nowadays the balance of power has been affected by the extreme speed that the Internet offers to those who want to organize collectively, as in the case of the Arab Spring.⁶ There are also several examples of financing terrorist activities, or journalistic activities, not permitted by states, through cryptocurrencies. One example is the fundraising done by terrorist groups⁷ or that of Wikileaks⁸ , which has seen its current accounts blocked, with users unable to receive donations. What could radically change is the possibility of not using violence, or having to trust between people. Those who want change will not have to take to the streets or storm the lord's palace: minorities will be able to re-constitute themselves as constituent assemblies, that is, to found what for them is the ideal system. Those who count for nothing will finally be able to count for something. With complete decentralization, even the state structure would lose its sense of being: the forks of an eventual state blockchain would be repeated, going on to take the form of continuous secessions, in which power slips from one branch of the blockchain to another. What happened with the French Revolution could be everyday life. The invisible hand would regulate economic and, therefore, power relations: a philosophical liberalism, in which the rules we cannot understand can be avoided by changing ecosystems/states and/or contributing to the one in which one will live. It can be an efficient, caring socialism because the consensus rules, which would go to the heart of blockchain, have been written (by citizens) that way. There could be both direct democracy and representative democracy, by election or by lottery: the freedom to accept the only rules that are understood will also belong to those who want to continue living in a hierarchical system. It will be necessary to maintain diplomatic and economic relations between each decentralized state, just as is the case now. Ambassadors, facilitators, judges (DAO Kleros is already working on this 53 ) and third-party conflict resolution systems will still be needed, but they will be decentralized and follow automated routines. Cases of dispute could be internal to the ecosystem, or external. The former would be resolved by internal smart contracts, while the latter would need the help of externally-facing smart contracts that link multiple ecosystems together⁹ .

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