Table of Contents
- An alternative
- The Sovereign Individual
- The sovereign stack
- An example, and we are done for today
“Software is eating the world,” proclaimed Marc Andreessen ten years ago.
What originally started with e-mails now has replaced notepads, meetings, presentation slides, physical drawings, bank visits, and slowly even physical offices. Software is indeed eating the world, but to scale so fast, it made a pact with the devil. The software stack got obscenely centralized, with an exceedingly small number of players as we go closer to the actual hardware running our favorite software in the clouds. The Kubernetes scale is not only problematic about its deployment complexity but also about its philosophical promise. A single cloud to rule them all, and by all, I mean everyone.
‘Like the churches,’ I say, thinking of the integral role that religious institutions played in connecting displaced people with supplies and medical care in the aftermath. ‘Yes,’ Ricardo chuckled. ‘Our data center was like a congregation, and we were like the priests.’ –The people of the cloud, aeon
A handful of cloud providers run the world’s software, which is grouped into reasonably large companies that rival countries’ size and revenues. On a scale that few can fathom, these companies have access to all kinds of private information about their users. Users generate and store information on these platforms without owning any of it, creating a balkanization of disparate software services and opaque privacy rules. To make matters worse, we know that the data is shared and accessed by governmental agencies without users’ approval, courtesy of the PRISM NSA project.
Counter to the dystopian reality, another breed of software rapidly expands in the field of p2p and blockchain. The first taxonomy concerns software primarily used to connect users, often offering a server for mere improvement of the UX. An old idea was made new, with BitTorrent becoming one of the most successful protocols. In p2p systems, every user is the valid owner of their data as they store them. Without the intermediary (the server), every computer is responsible for keeping its worldview.
On the other hand, we have blockchains, where privacy is eluding. Although there are privacy-oriented blockchains, such as Zcash, it’s a challenging issue that is still not being tackled on a scale. Blockchains are an excellent way for users to agree on a shared view of reality without having to neither trust nor an intermediary. Moreover, anyone can build and interact with the blockchain. It’s an open API where users can create exciting new synergies between seemingly disparate systems.
The sovereign stack is the software stack that will enable the sovereign individual to fulfill their full potential, leverage information technologies, and become a true world citizen and a permissionless knowledge worker.
Before we dive right into it, let’s talk a bit more about sovereign individuals and their needs.
The Sovereign Individual
“Sovereign Individual” was coined by the homonym book. It refers to the knowledge workers of the information age. Due to innovations in many fields, these individuals can master an unprecedented amount of leverage without relying on anyone but themselves and information technology.
As Naval Ravikant said, code is a new type of powerful leverage, being able to produce millions of dollars in value with the slightest cost of replication. Code (alongside media) is a new kind of leverage for the individual, who in the past had only access to more primitive types of leverage, namely capital (human and monetary). With code (and media), one can create something with zero marginal cost of replication. I can create an app that can be sold a billion times while I am sleeping. The kind of leverage a single person now has is accentuated by the fact that an army of robots, ready to do one’s bidding, is readily packed in server farms for efficiency. Peter Levels, the notorious maker of NomadList, has spoken for years of how he created over 100 projects, using bots to help him along the process. He is currently making about $2M+/year in a solo-entrepreneurship endeavor.
Transaction speed and security
In the information age, sovereign individuals can transact and protect their assets using cryptography rather than pure violence. The authors of “The Sovereign Individual” claim that “It will cost $55 rather than 55 million dollars”, as was the case in the industrial age. The only thing they mistakenly calculated is the cost of a hardware wallet, which is a little over $55 and can protect hundreds of millions of value. Of course, malicious actors can always use physical violence to force a transaction, as this archive of Bitcoin physical attacks illustrates.
Moreover, the authors predict that in the information age, it will be possible to rapidly enter into contractual relationships and transact using private currencies that aren’t controlled by centralized entities, such as a central bank. These relationships are already forming as anons complete tasks in the form of bounties posted by various DAOs.
We will also digitize currency, stocks, and relevant financial products to enable users to trade them freely. This is also echoed by Peter Thiel in a talk in 1999. In essence, Peter Thiel builds on the ideas of the Sovereign Individual (published around 1997) around the private competitors to the nation states’ currencies.
Digital equity is again something we already see happening, with DAOs tokens functioning in many cases as equity, in spirit if not in name.
Finally, an essential piece of the puzzle that is only alluded to in the book but clearly stated by Balaji Srinivasan is that of pseudo-anonymity. I suggest you watch this talk from as early as 2019 about the “pseudo-anonymous economy”. One of the most exciting ideas in this talk is that anonymity is a spectrum rather than binary. It poses an interesting challenge to transfer “reputation” from one “identity” to another without revealing which is which.
Sovereign Individuals do not need to use their “state identity,” but we can use our public key as our digital identity. That means we can have multiple identities used for different facets of life.
- An identity for work
- An identity to talk about issues you care about (e.g., politics)
- An identity for your friends and family
This pseudo-anonymous reality is not only already upon us, but we already see communities being built around pseudo-identities. SHL0MS is an excellent example of a person who’s working for identity, and “friends & family” identity is completely severed.
While we can write multiple articles about this new reality, it’s worth mentioning that it’s not unambiguously positive. For one, I think that the social justice that communities could enforce created better communities, as people had skin in the game for every single action.
There is value in forcing the architect to live in a house he just built for a little while. Consequently, there is value in knowing that we must live with the repercussions of our actions, especially since we only have a single physical identity but multiple digital ones.
Even in the case of Urbit, a digital identity goes for a few tens of dollars, which is negligible. There are multiple examples in Ethereum where a scammer would create new anon accounts, create new projects and continue scamming people to the tune of millions.
On the other hand, the lack of repercussions can bolster freedom of speech, as people can speak their minds without fearing the consequences. Moreover, any prejudices concerning race, gender, or sex preferences will no longer be an issue. Furthermore, we can contain the repercussions of one’s actions in a specific domain to the identity of that domain. If I am a good or lousy engineer, that attribute is isolated to my working identity and doesn’t transfer to the rest of my identities.
The tools for the Sovereign Individual
In this new world, it’s clear that the prevailing software paradigm can hardly support The Sovereign Individual.
- It’s overly centralized
- It can de-platformed anyone at any time
- It doesn’t care about privacy (or even weaponizes its lack)
The tools of the sovereign individual need to be:
- Built with privacy as a core principle
- Non-KYC based, aka pseudo-anonymous friendly
The toolkit is what I like to call the Sovereign Stack. People can use the stack of technologies and software to become sovereign individuals.
It may appear niche and overly restrictive now, but it will seem as evident in a few years.
The sovereign stack
So far, I have attempted to illustrate the problem space and the need for the sovereign stack. Let’s discuss a reference implementation that others can take and build on. You can think of the Sovereign Stack as a cake of different layers of technologies that one builds on top of the other. Some simplification has been done to leave out some layers (e.g., cryptography).
We will now discuss, in broad terms, the different layers of the sovereign stack and refer to some tools as examples to clarify them.
- OS / Application Management
- Blockchain settlement layer
- Wealth Management
- Code & Collaboration
- Application hosting
What is the hardware that supports sovereign individuals?
The first projects that come to mind are hardware wallets used in blockchains (we will later see why) and internet connectivity projects like Starlink.
With Starlink, I could have Internet in whatever jurisdiction I want in the future. The added competition can only increase the censorship resistance of the networks, as cartels will be harder to impose. Governments will need to coordinate extraordinarily to impose restrictions on telcos that are physically headquartered in other jurisdictions and do not have a single piece of infrastructure physically located in the jurisdiction in question.
In the words of the famous billionaire edge lord:
“They can shake their fist at the sky.”
It’s equally hilarious and concise, encapsulating the meaning of “The Sovereign Individual” and their leverage thanks to information technology.
Of course, hardware is not limited to network devices that enable the sovereign individual to have frictionless connectivity. With devices like the Raspberry-pi or Intel NUCs, the sovereign individual can use a house internet connection to host most of the services.
The list goes on and on.
The advent of projects like Umbrel and its rebranding from an individual bitcoin node to the personal sovereign server signals the need for such hardware.
I believe that projects like Starlink will only increase as the competition between jurisdictions heats up. Jurisdiction arbitrage for satellite-based internet connectivity will allow anyone to participate in the global economy as a sovereign individual without physically leaving the local environment. They can live in a highly censored techno-dystopia, either because they can’t physically escape it or don’t want it for various reasons (e.g., family), but also realize the full extent of their capabilities.
Moreover, we will be able to select different providers from different jurisdictions that offer other legal frameworks. One service might be cheap but censor a specific kind of content. Another is without censorship but with a known history of cooperating with authorities for a wide range of incidents. A final provider may be the most expensive but reside in a jurisdiction where privacy is considered an utmost value, and it’s known for resisting foreign attempts to gain information on its user base.
Modern closed-sources OSes like Mac and Windows can hardly accommodate the idealistic Sovereign Individual, riddled with analytics and spyware on every corner. While I am a happy user of macOS, I have to admit that Linux is propably the way to go, using an open source operating system that is agnostic to the hardware it runs on.
In this category, one could argue about Urbit. Urbit is built from the ground up as a computer for P2P networked applications. The first genuinely personal server.
Urbit re-implements all stack parts, from the “Assembly” language of the VM to the networking layer (built on top of UDP). It combines a radically different approach to computing with a fundamentally different approach to networks. Urbit supports application development and distribution, so in theory, you could use Urbit as the sole computer interface, using an underlying computer only as a hosting device for Urbit’s VM.
The Urbit network is hierarchical, and every Urbit computer is paired with a unique Urbit ID. Because the IDs are artificially scarce (about 4B) versus the virtually unlimited e-mail accounts, they cost something. The intrinsic cost of the Urbit IDs adds a Sybil resistance element to the network and a spam filtering mechanism. It is expensive to buy a bunch of IDs and start spamming people around. Due to their uniqueness, IDs carry a reputation, like physical identities.
Urbit in itself needs multiple blog posts, but here are a few primers to get you started:
Blockchain Settlement Layer
The settlement layer concerns all blockchain technologies. It’s the software that enables users to agree (“settle”) about the state of the world. It started with the simple use-case of deciding what value each has (a distributed ledger) but has moved to much more complex use cases with Ethereum and the birth of generalized Blockchains. A blockchain settlement layer (as far as the user is concerned) could also be an L2, L3, etc. Although technically, they settle in an L1, users only interact with the L2 (e.g., a rollup), and the rollup is the interface that informs the user of the state of the world. Thus, a rollup would fill our “blockchain settlement” layer for the user.
On top of that, we are now seeing an explosion in both interesting alternative L1s (e.g., Sui, Solana, Cosmos, etc.) as also scaling solutions for Ethereum, namely the infamous rollups. It’s worth mentioning that a sovereign individual who wants to max on the sovereignty axis can’t use any L1 or L2 with a hint of centralization. For now, the best bets are to use Ethereum L1 and Bitcoin, depending on the use case.
A cryptocurrency wallet is a user’s software to interact with a blockchain. They do two things:
- Safeguard the private key of every account of the user
- Construct the correct blockchain transactions that will make a valid change to the blockchain
There are various flavors of wallets, but what we care about are the ones that run locally on the user’s system, like Metamask. They must have zero telemetries so that they don’t dox their users and ideally have advanced functionality that protects the user from malicious protocols and websites. Although they aren’t exciting, they are a crucial part of the Sovereign Stack, as, without a wallet, users can’t interact with any blockchain.
Privacy is a significant and essential layer of the Sovereign Stack, probably one of the most important. By definition, p2p applications are not privacy-friendly as one user needs to know the public IP of the other user. Moreover, most blockchains are public, making it hard (or even impossible) to mask transactions and give financial privacy to their users.
Network Privacy for p2p applications:
- VPNs in safer jurisdictions. Not great as they will know your IP, but a combination of proper jurisdiction and external audits prove that no identification logs are kept in their servers can offer a great user experience.
- Using Tor as a VPN service is the most secure way, but it has a high cost in terms of lag and compatibility. Not all applications can forward their network over Tor. For example, running an Ethereum Validator over Tor is impossible.
- Privacy-native L1 blockchains like Monero and Zcash
- Privacy-native application-specific L1s, like Penumbra, aims to be a Cosmos chain that runs DeFi applications and is private by default.
- Privacy-native L2s, like Aztec. Although private, they have centralized points of failure.
- Mixers, like Tornado. Mixers are a great application that can offer some degree of privacy, although demixing practices do exist for parties that are motivated enough. Tornado is an excellent example of practical privacy, as it’s simple enough to be implemented anywhere and offers a good enough level of privacy.
The OFAC sanctions on Tornado prove that privacy is one of the most important battlefields against sovereignty. Nation-states will attempt to crack down on every attempt by individuals or communities.
Private key-based identity, like the Ethereum Name Service (ENS), is simple enough for humans (Odysseas.eth) but also cryptographically meaningful. By building a standard around ENS, as it’s already in the works with SIWE, we can foresee a future where this is the single sign-on you need.
ENS, or a similar service, will be critical to the pseudo-anonymous future, where different identities will be used for various uses and accrue independent reputations. ENS makes it easier to attach importance to the cryptographic footprint without compromising privacy.
I think that reputation is an essential tool for human communities, both physical and online. However, it is worth noting that the game theory is not as simple as in physical space, where you only get a single identity. The stakes are higher, so creating high-trust communities is more accessible as the repercussions are clearer. In the online world, a user can create a new ENS and start accumulating a reputation from zero. There are some repercussions, in the sense that you lose your already accrued reputation, but the cost is nowhere near the cost of being ostracized(reference) from a physical society.
DeFi tools, such as MakerDAO, can offer sovereign individuals safe and truly trustless vehicles to invest and grow their wealth, as anyone can do in the TradFi world. In this category, we put the DeFi protocols that live on blockchains and enable users to acquire debt, lend money, and perform financial and wealth management actions without an intermediary party.
Of course, it’s important to mention that it’s not trivial to analyze the true extent of the sovereignty of these protocols and how they would behave in the event of extreme crackdowns. MakerDAO, for example, is currently 10% collateralized through USDC. That means that Circle (the organization behind USDC) can unilaterally contribute in bringing the protocol down. Of course, that scenario doesn’t seem very plausible, as that would have apocalyptic consequences on the broader DeFi ecosystem, as multiple protocols would collapse due to second and third-order effects.
Generally, it is hard to say which protocols are not susceptible and exposed to centralized points of failure due to the money lego nature of the space.
Code & Collaboration
A sovereign individual is a digital-first person who probably works as a knowledge worker. That means they probably have some coding as part of their day-to-day job. With the recent OFAC sanctions of Tornado and the subsequent deactivation of their code repositories, it’s apparent that having a censorship-resistant platform to share code and collaborate on is critical.
Although native Git could fit that bill, it’s not trivial to collaborate on that protocol due to the lack of a unified identity layer on top of users and projects. Radicle is a great project that fits the bill, building on Git but adding an identity layer so users can identify projects and users across different machines. This kind of metadata is currently added by Git-based services such as GitHub or GitLab but does not natively exist in the Git protocol.
You can read my explainer Twitter thread about Radicle and dive right into it.
Another possible solution could be to use a self-hosted GitLab core to enable collaboration between project members. If the server is not publicly accessible, security through obscurity should be enough to keep it off prying eyes and malicious actors.
It’s tricky. Perhaps the use of easily repackaged software can be rapidly and easily served from another cloud hosting from another jurisdiction. Once one service provider takes the application down, you can use the container image and host it from a new service provider effortlessly.
Man is by nature a social animal; an individual who is unsocial naturally and not accidentally is either beneath our notice or more than human. Society is something that precedes the individual. Anyone who either cannot lead the common life or is so self-sufficient as not to need to and therefore does not partake of society, is either a beast or a god. – Aristotle, Politics
Let’s say a group of sovereign individuals form a DAO to organize around some task, such as founding a Network State.
They have two needs:
- Chat-based communication. Instant and easy to use, optimizing for speed at the cost of information discoverability and indexing
- Long-form communication. A forum enables users to submit and discuss proposals that require some debate around a rather complex issue. It could be a proposal for the DAO or an RFC for a new feature.
I can see Matrix and Urbit covering need (1), while Urbit and self-hosted Discourse instances would over need (2). It’s not by chance that Urbit can accommodate both requirements, as it was built from the ground up with the needs of remote communities in mind.
Urbit also adds some excellent features of Sybil-resistance and e2e encryption. Urbit, Matrix, and Discourse require someone to host a publicly accessible and always-on software instance.
If we want to optimise for individual-to-individual communication, chat-based applications such as Signal or Proton e-mail are vital for Sovereign communication. Signal has recently been extensively used in Iran, as the protestors are using it to coordinate. The Iranian Government has blocked it’s access, but due to it’s design, it’s possible to circumvent the blockade by setting up proxy nodes. Signal even made a public announcement, asking users around the world to setup proxy nodes in order to Iranians to be able to use Signal. Of course, the crackdown is a direct response of the end-to-end encryption of the service. I believe that increasingly more nation states will wage war on privacy-preserving technology.
An example, and we are done for today
Alright, now that we have our bearings and are starting to have a common language, let’s see an example of how I think about the Sovereign Stack. As a professional, I have worked all of my life remotely. I am currently working in Nomad while living a Nomadic lifestyle. Pun not intended.
Here is a PoC sovereign stack:
- Bitcoin: Used to store the bulk of the value that I can’t afford to lose. I would say about 40% of my net worth.
- Ethereum: Used for transactions, payments, and Defi applications.
- Radicle: Radicle is where I work, replacing GitHub in the long term. It’s equally a platform to collaborate in a P2P fashion over code and get funded for the open-source work I do as a maintainer and contributor.
- Draw.io to architect my work, using GitHub for storage. GitHub is, of course, mirrored to Radicle
- Urbit: Communication with my communities, both professional and hobbyist. Depending on the trust level, I may or may not have chosen to doxx myself in some of these communities. I also might be using different Urbit IDs to determine where I allow people to connect my online identity to my physical one.
- Mail: Although proton-mail is notorious for its privacy and end-to-end encryption, there have been incidents where it had to comply with regulations and give user information. On the other hand, if I used a private e-mail server hosted in a Raspberry Pi, my data would be my own. With a VPN service, a domain name, and some clever forwarding.
- Yubico: For ssh keys and 2FA
- Ledger: A combination of N-of-M to store my crypto. Never hold anything of value on hot wallets. Please.
- A Raspberry Pi that I carry with me as I travel from one city to the next. Even for a digital nomad, I only need a fairly good Internet Connection and stable electricity.
One could argue, for example, that Prospera or Praxis is part of the Sovereign Stack, enabling anyone to quickly become an online citizen, incorporate and conduct their business in an environment that understands the meaning of “competitive government.” Another could say that part of the sovereign stack are tools that enable us to use web2 without doxing ourselves, such as temporary e-mail services and SMS providers to get that 2FA authentication going on.
It should be apparent by now to all but the various maximalists of the world that all different technologies have a role to play in the toolkit of sovereign technology. Not one is more important than the other, as they consist of a chain of security and privacy.
We need to start thinking holistically regarding these technologies, breaking out of our bubble of expertise. It’s important to reconnect with the principles and values that led to the creation of most of this technology, which is highly relevant to the Sovereign Individual. It doesn’t make sense to talk about sovereignty over one’s assets if that person can be doxed and physically extorted. Conversely, it doesn’t make sense for complete anonymity if there isn’t a way to transact without intermediaries. Even if we have trustless transactions and network anonymity, they become moot if our code or communication can be censored or read without approval. Break a single link, and that weak point can compromise the sovereignty and safety of the individual or group. It’s imperative that we start thinking about these technologies as a stack and invest both capital and time in their interoperability and cross-pollination. The last point is crucial, as we need more people that have a broad understanding of the stack and can apply the insights of one layer to another. Finally, with a world that is increasingly more hostile to the principles that we mentioned above, such as privacy and trustlessness, it’s crucial that we start developing this toolkit now. To protect ourselves from another crackdown of Signal in Iran, OFAC transaction of Tornado or the complete AI-powered panopticon that exists in China.