New Network Sovereignties: the rise of non-territorial states? - Page 2 of 4

Introduction

In 2018, the Global Citizenship Governance’s symposium on Cloud Communities explored the emergence of voluntary self-sovereign political communities, whose governance transcends territorial boundaries. From Estonia launching the world’s first digital residency program to a number of private initiatives such as BitNation, Liberland, and Asgardia, institutions and communities are leveraging recent technological innovations to challenge conventional notions of sovereignty and governance (De Filippi, 2018).

Half a decade later, these pioneering ideas have proliferated in the public debate. The concept of voluntary self-sovereign political communities (Orgad 2018)—a relatively niche concept at the time—has evolved into a broader movement, giving rise to a variety of network-based political communities, many of which began to define themselves as network states (Srinivasan 2022).

Our goal in this symposium is to explore the distinct features and motivations driving these new types of network sovereignties, emphasizing the importance of governance over territorial control. Conceptually and theoretically, we want to explore the various meanings of sovereignty, the extent to which these networked communities can effectively be regarded as sovereign communities, and the extent to which they can assume state prerogatives—from law and governance to welfare services. Empirically, we aim to analyze whether these voluntary communities provide new avenues for political participation that might be absent in traditional nation-state structures. Normatively, we want to investigate the law and ethics of these initiatives to better delineate their positive potential to disrupt the longstanding Westphalian system of nation-states.

The Emergence of New Network Sovereignties

The advent of new network sovereignties (De Filippi et al. 2023) has been catalyzed by a confluence of historical factors and technological advancements. Throughout modern history, the conventional understanding of sovereignty has been intrinsically tied to the nation-state (Habermas 1996): a political entity acting as a sovereign authority within defined territorial boundaries, which can coerce its population to abide by its rules (Krasner 2001). However, in the past decades, traditional notions of sovereignty have begun to undergo a profound transformation (Lapidoth 1992, Hirst & Thompson 1995, Joffe 1999, Ku & Yoo 2013).

This transformation of sovereignty is propelled by the rapid advancement and proliferation of digital communication technologies and decentralized networked systems. First, the advent of the Internet has enabled the emergence of new network structures that operate in a decentralized fashion and purport to bypass traditional power structures—albeit with questionable success (Couldry 2015). The Internet enabled the formation of distributed social networks, facilitating cooperative dynamics among multiple actors and paving the way for new modes of social and political organization (Fuchs 2007). Indeed, as the digital world started blurring the lines between the local and the global, we had the opportunity to witness a series of transformative developments in how communities coordinate themselves and assert their collective identities, both in the physical and digital world (Dolata & Schrape 2016). Many online communities use digital networks as the primary mechanisms of governance, organization and cooperation. These communities span across geographic borders, experimenting with novel patterns of governance that do not rely on traditional political structures (Rheingold 1999). As such, these communities have the potential to present an alternative framework to the established Westphalian order, which has long dictated our understanding of sovereignty (Bartelson 2006).

Second, the advent of blockchain technology further facilitated the development of distributed systems where governance and authority are dispersed across interconnected digital networks, thereby further challenging the conventional state-centric model of sovereignty (Atzori 2015). Indeed, by empowering individuals to collectively manage networked systems, digital assets and resources, blockchain technology has created new opportunities for online communities to govern themselves in a distributed manner (De Filippi 2021). These ‘self-sovereign’ systems collectively managed by non-state actors are not (directly) subject to the sovereignty of existing nation-states (Ziolkowska 2021), forcing us to re-evaluate how individuals, communities, and institutions interact and collaborate on a global scale (Manski & Manski 2018).

At the core of this transformation lies the concept of new network sovereignties—a term coined to describe the emergence of self-sovereign networked political communities that operate as an engine for global coordination, transcending traditional definitions of political and geographical sovereignty (De Filippi et al. 2023). Network sovereignties do not seek to replicate the state-centric model of sovereignty, nor do they seek to replace or supplant the institution of the state. Instead, they exist in parallel with existing state formations, serving as animating forces for coordination and cooperation in an interconnected world. Indeed, because they are not confined by geographical borders, network sovereignties facilitate the free flow of ideas, information, digital assets and resources (Pohle & Thiel 2020).

These new political communities offer a novel perspective on the concept of sovereignty. While traditional state sovereignty is rooted in territorial control (Murphy 2018), network sovereignties are more concerned with the concept of ‘functional sovereignty’, emphasizing the importance of governance functions over territorial boundaries. Initially coined to describe situations where sovereignty is exercised by non-states entities—e.g. international organizations with authority over a particular set of functions or tasks (Riphagen 1975)—’functional sovereignty’ acquired newfound popularity with digital platforms operated by transnational corporations (Dederer 2015).

In the digital age, functional sovereignty takes on a new dimension as the ability to exercise control over the governance and operations of digital platforms becomes of utmost importance, and the control of digital resources does not require control of land. Some argue that large online operators are also extending their sovereignty beyond their digital platforms, moving from being mere market participants to actually dictating the rules of the market (Pasquale 2018). Amazon, for instance, controls not only the sale of goods on its platform, but also aspects of logistics, payment services, credit lending, and many more services that are generally subject to the rules and regulations of nation-states (Pasquale 2017). As a result, individuals and businesses find themselves subject to private corporate control—rather than public democratic control—in crucial areas of their lives ranging from e-commerce to urban planning (Ranchordas & Giants 2020). The very concept of citizenship is also starting to mutate (Orgad 2018), as illustrated by the advent of cybernetic citizenship (Reijers & al. 2023) and other forms of corporate citizenship (Windsor 2017). Yet, despite the fluid and borderless nature of the digital world, these digital juggernauts cannot entirely ignore governments’ rules and regulations as they nonetheless remain subject to the law of the land they are incorporated in, and that of the jurisdiction they provide their services to (De Filippi & Belli 2012).

Blockchain Technology as the Substrate for New Network Sovereignties

Most digital platforms are subject to the power of a sovereign authority (i.e., the firm operating the platform)—which is, in turn, subject to the sovereignty of a state (Baubock 2000). Conversely, network sovereignties are self-sovereign political communities that, although independent from any sovereign state, nonetheless assume some of the core prerogatives of the state: from money issuance, to identity management and arbitration. Even if they operate both in the physical and digital space, these networked communities mostly rely on digital tools to coordinate themselves (De Filippi et al. 2023). They thus have vested interests in ensuring that their governance infrastructure also remains sovereign, i.e., independent from the control of any nation-state. This is where decentralized digital technologies—and particularly blockchain technology—come into play.

Blockchain technology is a crucial building block for these networked political communities because it provides a decentralized, transparent, secure and immutable ledger that does not rely on an intermediary authority (De Filippi & Wright 2018). This allows these political communities to create their own sovereign financial infrastructure—and their own currency—rather than depending on governmental institutions or private actors to manage their finances (Vigna & Casey 2016). But the technological innovation underpinning blockchain technology extends beyond financial transactions. The ability to tokenize real-world assets on blockchain platforms revolutionizes the way resources are managed and shared within these online communities (Tapscott & Tapscott 2016). Decentralized identity solutions enabled by blockchain technology ensure more privacy and security in online interactions, allowing individuals to control their digital personas without reliance on central authorities (Wang & De Filippi 2020). Smart contracts deployed on a blockchain can be used to automate agreements, ensuring the execution of predefined rules without the need for intermediaries (De Filippi & Hassan 2018). The proliferation of Decentralized Autonomous Organizations (Hassan & De Filippi 2021) makes it possible to automate decision-making processes, allowing members to propose, discuss, and vote on initiatives without intermediaries (Singh & Kim 2019). Blockchain technologies also promote experimentation in political participation, with blockchain-based voting systems ensuring the integrity of the votes (Jafar & al. 2021) and new governance tools like conviction voting, turning political participation into a continuous, real-time engagement (Ding et al. 2023).

Real-world initiatives serve as compelling case studies. Many of the online communities forming around specific cryptocurrencies (e.g., Bitcoin or Ethereum) or blockchain initiatives (e.g., Gitcoin, vitaDAO, or LexDAO) are self-organized, inviting individuals to collaborate voluntarily based on shared interests and goals (Schaffers 2018). Projects like CityDAO or Cabin are experimenting with blockchain technology to govern land-based communities, showing that physical spaces can also be governed in a decentralized and self-sovereign manner, paving the way for the advent of new networked sovereignties (Abdi 2023).

New Geopolitical actors

A new player has recently entered the geopolitical arena—or, at the least, the geopolitical discourse: the Network State. The term has been employed since the late 1980s to describe the nexus of relations between the public and private sector (Okimoto 1989; Lehmbruch 1996), and later to underscore the transformation of the state as a result of the proliferation of networked communications (Carnoy & Castells 2001, O’Riain 2004). While there is no commonly-agreed definition of a network state, it is typically regarded as something that builds upon, or replicates the institution of the state. Even if their territories are distributed across multiple regions, network states remain entrenched within the political institutions of traditional nation states. Whether they subsist as extensions of existing states (Grosse 2010), or within their own sovereign jurisdictions (Srinivasan 2022), network states operate within defined (albeit geographically dispersed) territories, enforcing laws and regulations based on geographic demarcations. They are thus bound to the conventional Westphalian model of sovereignty grounded on physical territory (Newman 2003).

New network sovereignties distinguish themselves from network states to the extent that they do not purport to replicate the institutional fabric of the state, but rather to create additional layers of sovereignties that exist in parallel with traditional forms of territorial sovereignty (De Filippi & al. 2023). As such, they do not compete for territories—nor citizens—with existing nation-states, but rather coexist alongside them, as a novel institutional structure that individuals can join regardless of their geographical location.

Members of these political communities are united not by land, but by shared ideologies, values, and objectives. A sense of affinity or kinship often develops among members, along with a collective identity. Yet, in contrast to most nations, membership in these communities is voluntary and defined by participation, adherence to community guidelines, and mutual goals rather than birth or geographical location (Ohler 2012); belonging is based on shared purposes and ideals rather than on the happenstance of one’s birthplace or ancestry.

Since participation is opt-in, new network sovereignties promote individual autonomy and self-determination. Yet, they recognize the value (and inevitability) of interdependency, often trying to increase interdependency through the sharing and mutualisation of resources (Pazaitis & al. 2017). Insofar as people voluntarily choose to become entrenched with one another to increase their capacity to engage in collective action (Bayer 2014), these communities are pressured to implement participatory governance systems where individuals are incentivized to express themselves (via voice) rather than vote with their feet (via exit). This represents a departure from traditional power structures—such as nation states—where participation is not voluntary and exit is generally costly (Allen & al. 2020).

New network sovereignties redefine governance, both at the endogenous and exogenous levels. Endogenously, they can experiment with new governance models, unhindered by the bureaucratic constraints and centuries-old administrative frameworks of traditional nation-states (Heady 2001). By leveraging digital technologies, governance processes can be designed to be more decentralized, participatory, and adaptable (Voshmgir 2017) —allowing for swift responses to emerging challenges . Besides, in light of the voluntary and non-coercive nature of these networked communities, decision-making processes are often guided by principles such as transparency, inclusivity, participation and consensus-building (Rozas & al. 2021). The caveat is that the more open and decentralized a governance system is, the more resilient it is against centralized control or manipulation, but also the more vulnerable it may become against potential influence or co-optation by powerful third parties (De Filippi & Lavayssière 2020). Therefore, while the polycentric governance of network sovereignties offers many benefits over traditional centralized political structures (Aligica & Darko 2012), it also demands mechanisms for maintaining integrity and preventing manipulation by internal or external forces (Grover & al. 2021).

Political participation therefore plays a crucial role in the governance of these networks, whose polycentric nature requires active participation at all levels of governance, from deliberation to decision-making and enforcement (Ostrom 2010). Indeed, without any central authority that can impose the will of the majority, decision-making necessarily becomes a collaborative effort that values consensus over authority (Ostrom 2014).

Exogenously, as opposed to traditional nation states (or network states) whose operations are confined to a determined geographical location—whether it is made of contiguous or geographically dispersed territories—new network sovereignties transcend physical borders and are thus more conducive to global cooperation (De Filippi & al. 2023). By spanning territories, they facilitate connections and collaborations among individuals from diverse cultural, social, and economic backgrounds (Tapscott & Williams 2008). This fosters a rich tapestry of ideas, experiences, and perspectives, enriching the collective intelligence of these communities (Benkler & al. 2015). Collaborative efforts span continents, with contributors working together in pursuit of shared objectives without the constraints imposed by traditional geopolitical boundaries. As such, these networked political communities facilitate the integration of global perspectives with localized insights. This constitutes a form of globalization (Waters 2001) blurring the distinction between the local and the global (Giddens 2003) that is particularly attuned to the ‘cosmolocalism’ approach proposed by Bauwens & al. (2019)—where communities use global knowledge, resources, and collaboration networks to enhance their local economies and cultures.

At the geopolitical level, one may wonder whether these networked communities could be regarded as new political actors in international relations. Indeed, network sovereignties have shown that many of the functions that were once a defining feature of the state can now also be achieved by non-state actors. These include the issuance of a sovereign currency, often in the form of cryptocurrencies; the enactment of legal frameworks which—although not universally recognized in traditional legal systems—hold legal weight within their constituents; participation in economic activities, such as trade, production, and consumption within the networks and beyond; the provision of welfare services like healthcare, education, and social support, both to the members of the network and to the public at large. While these services are provided on a smaller scale than most state-provided services, they reflect a community’s responsibility for collective well-being.

Besides, although not recognized as sovereign states, new network sovereignties can engage in diplomacy with other communities, organizations, or traditional nation-states, to form alliances and collaborations for mutual benefit and shared goals. For instance, cryptocurrency communities, like those orbiting around Bitcoin or Ethereum, often engage in diplomacy-like activities, negotiating with governments or financial institutions to develop regulations that ensure the legality of their currencies (Riordan 2019). These communities also form alliances to promote the adoption of blockchain technology on a global scale (Berg & al. 2018). Other online social movements, like Anonymous, have conducted actions that resemble diplomacy, e.g., issuing statements to governments and private organizations, accompanied by coordinated online actions (Desforges 2014). More recently, political communities are attempting to negotiate living arrangements, tax issues, and legal matters with governments and local authorities in various countries, for the creation of autonomous economic zones or charter cities (Kohn 2020).

Conclusion & open challenges

The emergence of new network sovereignties raises a multitude of questions that we hope to analyze through this online symposium. First, empirically, what triggers or enables the transition from conventional territorially-based sovereignty models to new forms of non-territorial networked sovereignties? Are these network sovereignties a new phenomena enabled by digital technology, or did they already exist before, independently of technology? What are the challenges involved in this transition towards the emergence of new network sovereignties? What are the dynamics of scaling or growth within these networked political communities? How do they adapt to evolving needs and complexities in the global governance arena? And what is the impact of network sovereignties on the various stakeholders—including individuals, communities, and traditional state or non-state institutions—that may, either willingly or unwillingly, find themselves in a situation in which they have to interact with them?

Second, theoretically, in terms of international law and international relations, how can these new network sovereignties interact with traditional nation-states and international organizations? Shall they be recognized as a new actor in international relations? What are the potential implications for global governance and diplomacy? What are the potential risks and benefits that these networked political communities bring for each of stakeholders involved?

Third, normatively, what should be their legal status in international law, the enforceability of their rules and agreements, and their relationship with conventional legal jurisdictions (Josselin & Wallace 2001)? And to the extent that new network sovereignties coexist alongside existing nation states, how do we navigate the issues stemming from overlapping jurisdictions (McGinnis & Ostrom 2012) and potentially competing legal systems (Turnbull & Djoundourian 1993), especially with regard to taxation and cross-border transactions (Campbell 2004)? Already in the blockchain space, legal scholars and practitioners are faced with the difficult task of reconciling the operations of smart contracts and decentralized autonomous organizations with existing legal norms (Millard 2018), so that they can better interface with existing institutions (De Filippi & al. 2022).

As we navigate these uncharted territories, it is essential to engage in rigorous, multidisciplinary dialogue. Addressing these questions demands collaboration between technologists, ethicists, legal experts, and policymakers to develop a course of action that balances innovation with responsibility, ideals with pragmatism, and digital realms with the tangible realities of our interconnected world. Only through rigorous exploration and thoughtful discourse can we comprehend the true potential and challenges posed by these new network sovereignties, paving the way forward toward a more inclusive and participatory global governance agenda.

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