Balaji Srinivasan says that today governments are a combination of surveillance state and Keystone Kops. They hoover up all possible private information about citizens, but are incompetent at securing data and get constantly hacked.


These data than can get into hands of adversaries or criminals and threaten the offline security of citizens. Balaji says that we are not prepared for a total cyber war – similarly like people born in the late 1800s weren’t ready for the total wars of the 20th century.
We may experience a situation, where servers, that we rely on daily, cease to work amid this total cyber warfare (e.g. between the US and PRC). Or a situation where “the cloud bursts” – and it’s raining DMs, and private messages of citizens become searchable.
Crypto solves this - citizens owning private keys, and provably encrypted peer-to-peer communication over tools like Ethereum Name Service (ENS). Crypto is also creating “cyber security veterans”, says Balaji. Because monetary incentives make the hacks of crypto projects visible - and founders and developers get immediate feedback and need to constantly improve.
Hackers are upstream of drones. Therefore only crypto-friendly jurisdictions will be able to attract global cyber-security talent to defend themselves. This is no longer just a theory. Various Ukrainian state-affiliated organizations started to accept cryptocurrency donations shortly after the beginning of the Russian invasion and were able to raise more than $60m.
Big tech and legacy corporations got wokeified and often deplatform and unbank regular citizens, like the Canadian truckers protesting Covid restrictions in 2022. We saw in the Twitter Files that even a Stanford professor, Jay Bhattacharya, wasn’t immune from shadow-banning. His heterodox views might have shortened economically and psychologically painful lockdowns – especially after vaccines were widely available.
In their beginnings, social media companies were more honest players and neutral infrastructure providers - getting everyone online was the goal in early 2000s. Then they deplatformed competitors – like TweetDeck being cut from Twitter API. During those days, progressives were actually against deplatforming of these small companies. Today Woke Capital (legacy media and institutions) supports censoring political dissidents and heterodox views.
But the end result is not that different from China’s social credit system and unpersoning of dissidents. In the West it is less overt and more decentralized and done indirectly through corporations. Banks have a long legacy of aiding money laundering. So “know your customer” (KYC) rules are not preventing it. The real moral issue is if legacy institutions can protect privacy of citizens and clients.
Big companies should be and must be smart regulators – banning bad actors, like scammers, and preserving quality of services. And yes, the freedom of speech is not freedom of reach – but these regulations need to be fair, transparent and predictable.
Today we experience a shift from wokeism to statism in legacy media, says Balaji. The online censorship of heterodox views intensified during Covid pandemic, as Twitter Files reveal, and the current Russian invasion of Ukraine also gives a momentum to realignment around centralization/statism vs decentralization/maximalism axis.
Balaji has a concept of the pseudonymous economy – a truly global and meritocratic economy where you can earn crypto and disclose only partial information needed for getting the job done. Thanks to zero-knowledge technology you can give anyone viewing keys and disclose your crypto-credentials or any other information they need.
Privacy over KYC. Meritocracy over legacy institutions. DeFi over CeFi.
Pseudonymous economy helps both the powerless and power users and will also advance AI – as a digitally-native work environment where teams of humans and AI agents can engage in hybrid collaboration and symbiotic intelligence – being paid in crypto and bringing only “the minimum necessary self” to work.