Silicon or Carbon?

I’m often asked how my parents, who are from two very different countries, met. While my lazy answer is “through mutual friends,” the real answer is that they fell in love with the same country and ended up in the same place. My dad, enthralled by tales from his brother-in-law about life in America, turned down his acceptance to university in Germany and applied to Georgetown University instead. My mom, who enjoyed a stable life but not enough excitement in Indonesia, gave up her career as a dentist to move halfway across the world, starting over again at 28, lugging packages in a liquor store in Washington, D.C.

As a child growing up in Pennsylvania, I imagined that I, too, would have a moment where I’d pick up and leave my home country. Instead, I spent one weekend in San Francisco and decided that was where I wanted to be. I knew nothing about technology, only that the people there seemed like me. In my hometown, I felt too weird, obsessive and off-putting; in San Francisco, every improbable permutation of the future was earnestly dissected, discussed and built at coffee shops and in the living rooms of sunny Victorian row houses.

San Francisco in the 2010s was a place where permission was always assumed, rather than something that had to be earned. If you didn’t know how to code, someone would show you how. If you wanted to talk to someone important, you could just send them a cold email. Shortly after moving to San Francisco, I started a blog. A partner at a venture-capital firm read one of my posts, liked it, and invited me to coffee, which led to my first real tech job. At the time, I thought I had gotten incredibly lucky. Several jobs later—all acquired the same way—I came to realize that this was just how things worked.

For me, working in tech perfectly embodied the distinct “America brain” that I first came to know through my parents and now often encounter among my peers: the entrepreneurialism and the drive and the shameless, bright-eyed wanting of something better than the life they were born into. For would-be settlers and explorers, America is more like a fraternity than a country defined by geography or ethnicity. If you pledge allegiance to its ideals, and endure a bit of hazing, you, too, can become American.

And yet not everyone in tech these days is bullish on America—among them the entrepreneur and investor Balaji Srinivasan. Balaji’s influence on tech is difficult to describe through titles or accolades. His CV is impressive: he co-founded Counsyl, a genetic-testing company; he was a general partner at venture-capital firm Andreessen Horowitz; he was briefly the CTO of Coinbase; he was once tapped for the role of FDA commissioner. But he’s more fondly known among his peers for his ability to generate an endless, enthusiastic stream of ideas. Balaji is the guy who evangelized Bitcoin and predicted the COVID pandemic well before they achieved mainstream recognition; he taught a generation of young founders at Stanford how to build their startups; he foresaw the tech backlash and its eventual geographic dispersion back in 2013, at a time when Silicon Valley was considered untouchable. And last summer, he published a manifesto called The Network State: How to Start a New Country, calling for tech to build a successor to the nation-state. “I don’t think the US establishment is nowadays on balance a force for good abroad or at home,” he writes, “or that the US model would be cloned today by someone setting up a new state.”

There’s a superficial way to read his statement, one that might elicit murmurs and nods from those who are ashamed to call themselves American, who look longingly across the Atlantic Ocean at our European neighbors and wonder aloud why we don’t have universal health care and longer vacations. But The Network State isn’t a rejection of American values: it’s a rejection of America, the country, as the sole guardian of those values.

Other than his stubborn insistence that the sun is setting on the American empire, Balaji exemplifies the American dream. He grew up on Long Island, New York, the son of Indian immigrants. He went to Stanford, then founded and sold two technology companies.

Balaji—who emigrated from America to Singapore several years ago—is the prodigal son who rejects his parents but can’t escape his genetics; he is, despite his explicit rejection of America as a place, the most American of us all.

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Balaji proposes in The Network State that there are three moral doctrines, or Leviathans, from which societies derive their authority: God, State and Network. The first Leviathan was God. We permitted “god-fearing men” to ascend to power, because “a man who genuinely believed in God would behave well even if no one could punish him.” By the mid-twentieth century, however, following two world wars and a strong, centralized government, the State overtook God as our prevailing moral authority.

Today, trust in institutions is falling, and the State is showing its wear. Balaji attributes this behavior to the rise of a new Leviathan toward the end of the 1900s: the Network, driven by mass consumer adoption of the internet. Those who worship the Network see themselves as faithful to digital tribes and communities, rather than their neighbors. Deplatforming individuals on social media sites, for example, is an example of appealing to Network rather than State authority to maintain social order.

While all three Leviathans coexist in tension with one another, Balaji contends that in the 21st century, what he calls the “network state” is now heir apparent to the nation-state. Unlike charter cities, which start by acquiring land and then building an independently governed community on top of it, network states start as online communities that later materialize into the physical realm, forming a decentralized “archipelago” of territories across the world and establishing diplomatic relations with preexisting states.

Technologists sprang from America’s rib, the way America did from the British Empire. First, there was the British Empire; then, America as its rising-star colony with a unicorn-sized exit; and now, the internet as America’s breakout success. Each iteration contains a strain of its origin, but as it’s allowed to flourish, becomes something else entirely.

In Balaji’s vision, what comes next is a pluralistic constellation of states that each begins as a “startup society,” with a charismatic founder at its helm. Citizenship is fluid, thus avoiding tyrannical lock-in and forcing network states to compete with each other to make their membership worth it. This world, Balaji believes, is a promising third option for those who don’t want to live under either American imperialism or Chinese tyranny.

A peaceful array of network states, seemingly free of brute geopolitical concerns, might be difficult to imagine. Perhaps these are the implications of a post-scarcity world where digital land is abundant and resource competition becomes obsolete, but we all still need a place to rest our heads at night, and that world is constrained by physical resources.

It’s possible that one day, when physical land is abundant too, Balaji’s vision will come to pass. But for now, The Network State is an exemplary salvo in a debate playing out in tech today over which type of world we want to live in: A world of Atoms, or of Bits?

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The “Atoms versus Bits” distinction was first popularized by investor and PayPal founder Peter Thiel in 2014. Thiel expressed concern that we were seeing too many “bits” companies (such as software, social media and virtual reality) and not enough “atoms” (such as hardware, manufacturing and transportation). Thiel’s oft-repeated slogan: “We wanted flying cars, instead we got 140 characters.” 

At the time, tech was nearly synonymous with software: the painstaking task of bringing our physical world online. Working in hardware was like working on the outskirts of the tech industry, made even more challenging by its high up-front costs, unattractive business models and relative lack of venture funding.

But the Atoms and Bits discourse took on new meaning in the 2020s, as technologists confronted a shared concern that progress is stagnating, or perhaps even in decline, because humans are stuck squabbling over a finite set of resources. The public backlash against tech in the mid-2010s, combined with the onset of the COVID-19 pandemic in 2020, and the steady decline of quality of life in San Francisco, were stark reminders that Silicon Valley was still beholden to the outside world.

Tech does not like to spend time mired in stalemate politics or public-relations disasters, which distract from the ability to build new things. Like generations of explorers before them, its denizens jointly recognized that we need to open new frontiers in order to enable the next wave of innovation. But where the Atoms and Bits differ is on which frontier matters most.

The Atoms are rooted in the physical world, composed of nation-states. They believe America is still the best place for freedom and entrepreneurship to thrive, but worry it is threatened by a decaying homeland and growing capabilities from other countries, particularly China. Their strategy is to revive the American dream, with its promise of innovation carried out at breakneck speed: national defense, energy, aerospace, housing, education, families, supply chains, manufacturing. To realize that vision, America must continue to attract the best talent from all over the world. 

Katherine Boyle, a venture capitalist at Andreessen Horowitz, coined the term “American dynamism” in 2022, an investment thesis that centers on “companies that support the national interest,” whose success “supports the flourishing of all Americans.” American dynamism builds on Marc Andreessen’s 2020 “It’s Time to Build” manifesto, in which he asserted that “building is how we reboot the American dream,” as well as at least a decade of public conversations about whether technological progress is slowing down. This so-called “great stagnation” was evangelized by Thiel and economist Tyler Cowen and has been debated across the ideological spectrum, including by Noah Smith, Ross Douthat and Ezra Klein.

The Atoms tribe doesn’t work from home. They go to warehouses and factories, with occasional trips to Capitol Hill. They are unabashedly pro-immigration. They understand the role of government in enabling innovation in the physical world, and willfully grapple with policymakers in the mud-wrestling swamp of Washington, D.C. Ultimately, however, Atoms would rather weaponize their hands over their words; they have no patience for idle talk without action.

The Bits, by contrast, are rooted in the digital world, seeding a parallel universe with online communities that will perhaps one day have the power of network states. They agree with the Atoms that America, the nation-state, is in decline, but believe this decline is irreversible: that the American spirit is becoming irrevocably detached from its corpus, and there is a much bigger game afoot.

Like souls without a body, the Bits are floating into the stratosphere, searching for a new place to call home. Their skyscrapers will not be built on American soil but on digital frontiers. These are the entrepreneurs and investors who, like Balaji Srinivasan, are drawn to social software, virtual reality, creator economies, cryptocurrency and web3.

The metaverse—the virtual-reality world on which Mark Zuckerberg has staked his reputation and his company’s fortune, even changing its name from Facebook to Meta—appears to be at least superficially aligned with the Bits mindset. Yet Zuckerberg has struggled to gain buy-in from the public, as well as from technologists, perhaps because the metaverse still operates in our current paradigm: even if it succeeds, it doesn’t radically challenge our assumptions about how we work and live, any more than the internet already did. To “real” Bits, the metaverse is just a second-rate facsimile of our existing world. Balaji’s The Network State, meanwhile, at least asks the questions that Zuckerberg is afraid to confront. If the digital world really is overtaking our physical world, we must be willing to revisit how the physical world is governed.

Something like the Bits experiment has been tried before, but like the metaverse, it didn’t go far enough. The first generation of denationalized elites, who made their money in global industries like finance, management consulting and early computing, began to mobilize in the early 2000s. That group of executives, technologists and academics—encapsulated by the World Economic Forum and their annual gathering in Davos, Switzerland—rejected all displays of nationalism, which they denounced as crude, in favor of enlightened “global citizenship.” But where the Davos cohort derives its authority from the State, the Bits now derive their authority from the Network.

Davos spreads its ideals through global convenings and negotiations, reinforced by regulatory bodies like the United Nations. But only a small handful of people can have access to such influence; if a non-powerful person wants to change the system, the best they can do is lobby their state actors.

By contrast, the digital tribes of today are not just elites, but weirdos and misfits from all walks of life who often live far from centers of national (and international) power and are frequently pseudonymous. Balaji might say that the critical difference between Davos and this generation is having access to blockchain technology, which, though inchoate, makes it theoretically possible for people to be economically independent from state actors for the first time. While global corporations like Google and the civil associations Tocqueville described in Democracy in America can both be understood as prototypes of network states, they ultimately were and are still under the control of the State. Cryptocurrency and blockchain-enabled identities and applications can be bought and held by anyone, and they cannot be easily seized by the State, thus presenting an opportunity to build outside of the State: in other words, true Network power.

To the Bits, global power is defined not by industrial might, but cultural influence, and it amasses wherever people have the freedom to exchange ideas that foster creativity and innovation. The Bits are unconvinced by the Atoms’ fears of rising foreign threats, because, they contend, every talented person in the world still wants to move to America. (In a 2021 study by Boston Consulting Group of workers in 190 countries, China appears nowhere on the list of top ten countries that foreign workers would like to move to, from 2014 to 2020.) The biggest threat to American hegemony is not another nation-state like China, but a better digital version of itself.

On the other side of things, Atoms don’t believe that the digital world represents a real frontier to be opened, given that humans are ultimately constrained by physical needs. Balaji claims that the physical world increasingly represents a “printed out,” or materialized, version of the digital world, the way that we used to print documents until they went digital-first. Today, he says, a significant portion of value creation is digital, such as “the iPhones manufactured in Shenzhen [that] gain much of their value from the designers in California.”

The Atoms would retort that everything, including the digital world, still relies on physical resources, even if the Bits don’t see or notice them. Where does the internet come from? It comes from physical cables laid in the sea, national defense that patrols these waters to protect them from foreign interference and the energy needed to run it all.

Listening to the Atoms and Bits debate feels like staring at an optical illusion flipping back and forth between two images: goblet to face and back again. And yet despite their rivalry, the Atoms and Bits are not so dissimilar after all.

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Growing up, my dad would always remind us that America doesn’t guarantee anyone happiness. “It guarantees us the pursuit of happiness,” he’d say. Sounds like a cheap deal: America gives us opportunities, but we still have to put in all the work. But that is more than any other country offers its citizens.

The Bits and Atoms are on a unified mission to protect the pursuit of happiness, and they need each other to succeed. The Bits are how we uncover and exchange ideas at rapid speed; the Atoms are how we implement them to create tangible benefits for humanity. Even Balaji writes that “bits reopen innovation in atoms,” and sees network states as a way of circumventing the regulatory and political stalemates that are blocking progress. If network states succeed, he says, “we can return innovation to the physical world.”

Perhaps the biggest divergence between Atoms and Bits comes down to differences in what they believe to be the “good life.” The Bits view the physical world as mostly an inconvenience and dream of being able to program their surroundings as easily as their digital world. They are happiest inside their heads, free to do anything they can imagine. Tech is filled with people who grew up in one-room schoolhouses, in farmhouses, on remote islands, who dropped out of college or couldn’t afford to go in the first place, who quietly send money home every month to their families. The internet lifted millions of people out of the constraints of their physical environment and connected them to better opportunities.

The Atoms, on the other hand, find joy and calm in the beauty of their cities and neighborhoods, in farms and factories. They want to raise children who scream delightedly and touch everything with their finger-painted hands, instead of probing mutely at a glass screen. Ideas are just the beginning; they want to make ideas dance in the real world. To the Atoms, tech is how we improve human life, as the agronomist Norman Borlaug did when he discovered disease-resistant strains of wheat that saved a billion people around the world from starvation.

But these differences risk distracting from tech’s most important role as the lightkeeper of innovation. Tech is what enables more people to take part in the good life, whatever that means to them. It’s the same spirit that brought my parents to America, that made me fall in love with San Francisco in the 2010s, that gives the Atoms and Bits the freedom to pursue their visions. Those in tech will squabble about whether remote or in-person work is better; they’ll poke fun at each other for buying JPEGs with fake internet money or childish obsessions with rocket ships. But ultimately, the Atoms and Bits are two parts of the same dream, where anyone can build the world they want to see. These tribal debates matter less than making sure that someone is keeping the light on for America.

Tech is sometimes mocked as frivolous or foolhardy by outside observers, but to me that is a mark of one of its best qualities: earnestness. It’s the only home I’ve found where people are unequivocally encouraged to think bigger, and where ambition and creativity are celebrated without judgment—even with no experience in a given field, no prior connections to the scene and no institutional affiliation, as I experienced myself when I embarked upon my own independent research project as a twentysomething and saw my ideas make a tangible impact on the open-source software industry. Tech is where “doing research” does not require me to have a Ph.D., and where “writing for a living” does not require me to scribble articles for pennies into the void. In tech, writing thoughtfully and persuasively about a topic means that others genuinely engage with those ideas, remix them freely and reach out with opportunities to transform them into reality. My peers in tech have never questioned the importance of my (sometimes eccentric) obsessions and rabbit holes, but instead urge me to act upon the ideas I care about and to take my own dreams seriously.

If the previous era of tech was about bringing our physical world online, the decades to come will be defined by the race to open the next frontier for humanity. Whether that frontier lives on soil or in the clouds will be determined by today’s technologists, wind whipping at their faces as they climb the bluffs and beam their lights onto the bitter dark sea, scanning the horizon for the next signs of life.

Art credit: Nicolas Sassoon, The Prophets (Eratela), 2019. Digital animation, lava rocks, LCD panels, media players, controllers, aluminum profiles, ABS, rubber; dimensions variable. Courtesy of the artist. 

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