A network state is a concept for building a new kind of country from the internet outward. The term was popularized by entrepreneur and investor Balaji Srinivasan in his 2022 book The Network State. He defines it, in part, as "a highly aligned online community with a capacity for collective action." In his model, that community then crowdfunds physical territory in different parts of the world and, eventually, seeks diplomatic recognition from existing states.
The idea has moved from blog posts to real-world experiments, including a residential campus for members, startup cities and pop-up communities. It has also run into the hard edges of the world as it is. In July 2026, a network-state-inspired school in Malaysia was ordered to stop operating and relocated to Kazakhstan.
This article explains what the network state idea is, how it is supposed to develop, where it has been tested, the main criticisms, and what it means in practice for digital nomads and location-independent entrepreneurs.
Key takeaways
- A network state, as described by Balaji Srinivasan, starts as an aligned online community, gains physical spaces in many places, and aims for recognition by existing states.
- No network state has gained diplomatic recognition. Current projects are communities, campuses and special zones operating under host-country law.
- The Network School, launched in 2024 in Forest City, Malaysia, moved to Astana, Kazakhstan in 2026 after Malaysian authorities ordered its campus to cease operations.
- Membership in an online community does not change your citizenship, residence permits or tax residency.
- The idea overlaps with older concepts such as flag theory, charter cities and seasteading.
Where the idea comes from
Srinivasan is a former chief technology officer of Coinbase and a former general partner at the venture capital firm Andreessen Horowitz. He has argued since at least 2013 that people frustrated with existing institutions could build alternatives rather than try to reform them. The book, published in 2022, set out that argument at length and is available free on its official website.
The network state draws on several older ideas. One is "exit": the belief that the ability to leave, whether a company, a city or a country, is a check on bad governance. Another is the growth of remote work and online communities, which make it possible for people with shared values to cooperate across borders. A third is crypto, which gives such communities tools for payments, records and funding outside traditional banks. Readers interested in the intellectual background may also like our summary of The Sovereign Individual, a 1997 book that predicted many of these trends.
How a network state is supposed to form
In simplified form, the path described in the book looks like this:
- An online community forms around a shared purpose or set of values, with a recognized founder or leadership.
- The community builds trust and an economy, often using crypto tools, and starts acting together on projects.
- Members meet in person, first at events and then in shared housing, coworking spaces or neighborhoods.
- The community acquires physical spaces in many locations, connected online rather than forming a single territory.
- The community grows in population, income and real estate until it can seek diplomatic recognition from existing states.
The key difference from a traditional nation is the order. A nation usually starts with land and a population living on it. A network state starts with a community and adds land later, in pieces, around the world.
The real-world experiments
None of the projects below is a recognized state. They are useful because they show what the idea looks like when it meets real law, real land and real neighbors.
| Project | What it is | Status as of October 2026 |
|---|---|---|
| Network School | A residential campus for members interested in technology, health and startup communities, founded by Srinivasan | Launched in Forest City, Malaysia in September 2024; moved to Astana, Kazakhstan in 2026 |
| Próspera | A private-led ZEDE (special economic zone) on the island of Roatán, Honduras, with its own regulatory framework | Operating; legal status contested in Honduras; international arbitration pending |
| Liberland | A self-declared micronation proclaimed in 2015 on land disputed between Croatia and Serbia | Not recognized by any state; Croatia administers the area |
| Seasteading | The Seasteading Institute, founded in 2008, promotes floating communities in international waters | No permanent seastead; a 2017 agreement with French Polynesia lapsed |
The Network School and the Malaysia episode
The Network School opened in September 2024 in Forest City, a development in Johor, Malaysia, near Singapore. It offered members housing, meals, coworking and events. In July 2026, the Iskandar Puteri City Council revoked the business license of the school's Malaysian operator and ordered it to stop operating, citing breaches of licensing conditions, as The Star reported. The decision followed concerns raised by the Johor state government over allegations that Israeli nationals had joined the program using passports issued by other countries. The Network School's website now describes a home in Astana, Kazakhstan, under a memorandum of understanding with the government.
The episode illustrates a point critics have made for years. A community can be global and online, but its buildings sit under a host government that decides what happens on its soil.
Próspera and the limits of autonomy
Próspera is not a network state in Srinivasan's sense, but it is often discussed alongside the idea because it tests how much autonomy a private-led zone can have inside an existing country. Honduras repealed its ZEDE law in 2022, and Reuters reported in September 2024 that the Supreme Court had declared the regime unconstitutional. Próspera continues to operate and its operator has a claim pending at ICSID, the World Bank's arbitration center. Our guide to special economic zones for entrepreneurs covers Próspera and other zones in more detail.
The main criticisms
Critics raise several recurring points:
- Democratic accountability. Communities organized around a founder or company may not offer members the same rights and remedies as democratic institutions.
- Neighbors and local people. Projects on physical land affect people who never joined. Neighbors of Próspera, for example, have raised concerns about land and public services.
- Dependence on host states. As the Malaysia episode showed, a community's physical presence depends on permissions that can be withdrawn.
- Who can join. Membership often requires money, specific skills or the right passport, which limits who benefits.
- Recognition. No existing state has recognized a network state, and the path to recognition remains theoretical.
Supporters reply that competition between systems can improve governance, that people join voluntarily and can leave, and that experiments are how new institutions develop.
What it means for digital nomads
For most nomads, a network state is best understood as a community, not a legal status. It can be valuable for connections, ideas and a place to live and work for a while. It does not replace the legal building blocks of a mobile life:
- Citizenship and travel documents still come from recognized states. Our guide on how to get a second passport covers the legal routes.
- Residence rights come from the host country. A network-state campus does not grant a visa. Our article on Plan B residency for entrepreneurs explains how people secure a second base.
- Tax residency is decided by each country's tax rules. Living in a community abroad, or moving between several, does not make anyone tax resident nowhere. Our article on the perpetual traveler idea explains why that approach rarely works.
Many people who like the network state idea already apply a practical version of it through flag theory: holding citizenship, residence, banking and business in different countries, all within existing law.
Frequently asked questions
Is a network state a real country?
No. As of October 2026, no network state has been recognized by an existing state. Current projects operate as communities, campuses or zones under the laws of the countries that host them.
Who came up with the network state idea?
The term was popularized by Balaji Srinivasan, a former Coinbase CTO and Andreessen Horowitz partner, in his 2022 book The Network State, which is available free online.
Can joining a network state give me a passport or residence permit?
No. Passports and residence permits come from recognized governments. A community may help members with relocation, but the legal status still comes from the host country's immigration rules.
Does living in a network-state community change my taxes?
Not by itself. Tax residency depends on the tax rules of the countries where you spend time and keep ties. Living in such a community can make you tax resident in the host country, depending on its rules and your circumstances.
Important: This article is general information, not tax, legal or financial advice. Rules change often and depend on your personal circumstances. Speak with a qualified professional in each relevant country before you act.