Response to "How to start a new country"


By Elijah Low

This article is in response to “How to start a new country” by Balaji S. Srinivasan. The premise of the paper is to postulate what it would be like to start a new country starting from a blank slate and without historical constraints and proposes a cloud country starting with digital before going physical. I believe that technology should support an aspiration. I think the application of this idea goes beyond starting a new cloud country and many good applications can come from this dream that could help existing countries reform into a 2.0 version of their country.


Why start a new country?


If we could dream big without historical constraints, what would be the most magnificent, aspirational dream of a country we could have? We first need to figure out the end goal or the purpose of a country? We can stack technology to achieve a cloud country but the purpose of the cloud country needs to be aspirational and that aspiration needs to embody the best of all that is true and worthy goals in our flawed and fragmented humanity. It needs to be a purpose so aspirational that it would motivate us to overcome the most impossible challenges to build something we can all be proud of and find fulfillment in. I propose that the purpose should be the “happiness” of its citizens. I use the word happiness here not to equate to pleasure but rather to mean the overall quality or satisfaction with life. There is a universal truth when Locke wrote about the “The necessity of pursuing happiness is the foundation of liberty” and this was later penned in our declaration of independence by Thomas Jefferson. I think there are at least 10 major factors that contribute to our “happiness” and as we make progress on these major factors, it will significantly improve the happiness of our society.


Imagine a country where we measure progress by the long-term happiness of our citizens. Knowing that it is hard to be happy if we are suffering from illnesses and diseases, our health care system focuses on the health and longevity of the citizens and everyone in the health industry is compensated for improving the health of the citizens rather than profiting from the treatment of illnesses. A country where there is no tax but our government is wealthy. A country that not only doesn’t have corporate tax but the government also partners with our corporations to make them even more successful. A country where our laws don’t change merely because of a change in an elected congress but because of an improvement in the quality of our debate and understanding. A country where our welfare system goes beyond providing the minimum food and shelter to where the minimum standard of welfare is an opportunity for every youth to achieve their dreams. Our citizens pursue a vocation not because they need a job with higher pay but because it is what they are passionate about and are gifted in it. The pay of a job is no longer the main criteria of why someone chose a vocation because any job will provide you an income to live comfortably. A country where our citizens find meaningful relationships and build loving families. A country where fairness is a norm and generosity is in abundance. A country where we live in liberty because our rights are protected and so are the rights of the environment we live in. A country where we can pursue happiness.


Many may consider this utopia unattainable but if it takes us another millennium to achieve it, isn’t it a worthy goal? We can make progress if we can measure it. I propose using an index value of joy for the country to measure the progress of this country. For the sake of this paper, I will use the label “joy”, so as not to be grouped with those working on the happiness index and other similar projects because I don’t want to misrepresent their work or suggest that this is the same thing. This joy index measurement can be an aggregation of factors that contribute to the happiness of the citizens in this country. Health, material well-being, quality of relationships, trust, and other factors contribute to this joy index. We just need to measure them in a way that will chart a course for meaningful progress. For example, we need to measure health as longevity of the people multiplied by the quality of their health rather than the cost to treat the illness. Material well-being needs to be measured by the quality of life we can afford with some measure of the length of our “runway” (savings/burn rate) or a similar measure rather than GDP per capita (that increases when the government build new roads but don’t actually increase the amount of money in our savings account). We need to incorporate the quality of relationships into the measure of progress because it is what we value as a society and as people. The last few hours before we die, we don’t ask to see our bank accounts, we ask to see our loved ones. A cloud country needs to be the societal platform where we make meaningful measurable progress that contributes to what we value as people.


When we talk about a country, we need to talk about the value of the citizenship of that country. In practical terms, citizenship is valuable when it bestows rights to its citizens and protects those rights be it life, liberty, or property. Citizenship becomes more valuable when a country extends the range of those rights through bilateral agreements with other countries so that its citizens can work, travel, invest and do business in other countries.


How to start a new country?


Starting a cloud first, land last country has some major challenges but it is nonetheless a worthy pursuit because it provides a platform to build an aspirational utopia, it provides immediate help to communities who are suffering the most, and it provides elements to allow physical countries to transform themselves in a better country.


The biggest challenge of a cloud country is the enforcement of rights bestowed by the cloud country. There are some physical requirements to enforce the rights bestowed by a virtual country. Every right comes with a restriction and it is in the enforcement of that restriction that is challenging. For example, if the cloud country wants to bestow the” right to live” on you, it has to enforce a restriction on others not to kill you. In this regard, a cloud country could form a partnership with some physical countries where their citizens could co-exist and the physical country would enforce the laws of the cloud country. In this scenario, we would face the challenge of living with two sets of laws which may be more costly and offer fewer rights than to live with just the laws of the physical country. A possible solution would be to reform the physical countries and help them transform into physical countries 2.0 with a cloud country infrastructure and aspirations.


Despite some of its challenges, a cloud country, however, can offer real and immediate help to millions of people who are suffering. According to the United Nations Convention on the Rights of the Child 1989 (CRC), every child shall be registered immediately after birth and shall have the right from birth to a name and the right to acquire a nationality. However, that is not the case in Malaysia as shown by a report by the Research Directorate, Immigration and Refugee Board of Canada, Ottawa. A child born in Malaysia does not automatically obtain Malaysian citizenship, which has led to many stateless children who are sometimes referred to as ‘undocumented children’ in the country. In 2016, the former home minister of Malaysia estimated that there are around 290,000 stateless children in the country. Stateless children are also denied the right to education, legal employment, public services, healthcare in Malaysia and they are unable to leave the country because they don’t have a passport. Crimes including rape and murder against these children are not prosecuted because legally these children don’t exist. They are also unable to have bank accounts and subject to constant theft. And that is only just Malaysia. It is estimated that there are 12 million people in the world who are stateless and as many as 5 million of them are minors.


A cloud country with bilateral agreements with physical countries could issue citizenship and passport to these children and immediately offer them protection against crime and allow them basic human rights through bilateral agreements with physical countries. It could immediately provide them wallets for digital currency and keep the little money that they have safer from theft. Through partnerships with physical countries, we could use their embassies to offer immediate citizenships to these stateless children. If we took only the minors, we would immediately have a population greater than that of New Zealand or Ireland. If we took all the stateless in and gave them citizenship, we would be in the top 80 most populous countries in the world. No matter how limited our governmental services are, it would immediately improve the lives of millions of children and protect them from some of the most outrageous crimes.



Elements of a Cloud Country or Physical Country 2.0


I will comment from the perspective of starting a cloud country and reforming existing physical countries in a 2.0.


Election Blockchain. There is significant value in an open ledger blockchain electoral system. It can be a foundation for a free and fair election in many physical or cloud countries. However, it needs a few elements to be successful. Firstly, It needs to verify that only legitimate voters can vote and only vote once. This is where biometrics can be useful. Secondly, it needs to protect the privacy of the voters. Thirdly, It needs to be transparent so that voters can check the blockchain to verify that their votes were recorded correctly and that the calculations of the election results are correct. Lastly, It needs to be accessible to every citizen of the country and have multiple channels of voting, whether in person or over an app on the phone. It needs to work in the poorest physical country that our citizens could reside in.


Governance. With a truly transparent but private election, we can experiment with democracy. Does every citizen need to have an equal vote? Do we need representation as people or does it make more sense to vote for a certain position that holds specific responsibility, for example, voting for the “secretary of health” and instead of having everyone vote for a candidate, they know little of, does it make more sense to have all the qualified doctors who are citizens vote for this position. Another variation of this is that we have a set of skills or required knowledge that a voter is required to have to be able to vote for certain positions. For example, we could have a public blockchain that records the “skills” or “proven knowledge” in certain areas that would then allow the voter to vote for candidates in that area. This would then allow knowledgeable voting so that the best candidates get elected and not necessarily the most popular.


Cryptocurrency. There is value in a country being able to control its money supply so as to make progress on the material well-being of its citizens and to support the corporations that are domiciled within its sovereignty. For the sake of clarity in this paper, let’s call this cryptocurrency, “ourcoin.” All government employees will be paid with ourcoin and all government services will have to pay with ourcoin. The government will have multiple investment funds for different sectors and growth stages and these funds will invest with ourcoin. Government-backed loans given through banks domiciled in our country will be required to transact the government-backed loans in ourcoin. The ability to issue cryptocurrency thus provide us the ability to back those government guarantees and the only risk we have to mitigate is inflation (which we can do by increasing the interest rate of staking ourcoin with our central bank).


Government Investments. The primary source of income for the government will be through its investment funds. It will partner with existing funds and possibly run its own funds for multiple sectors and growth stages but will require all its investment, dividends, and repayments are denominated in ourcoin. This is not a new idea, the GIC (Singapore government investment) has USD 453 billion invested in 40 countries, Investment Corporation of Dubai has USD 301 billion in investment and Norway’s government has USD 1.2 trillion in investments. Instead of investing purely to maximize the returns, a sovereign angel fund and venture capital fund will allow the country to direct the growth innovation to support the aspirational values of our country. This would allow us to lower the cost of capital of certain sectors or certain types of technology development and increase the acceleration of the growth of those companies. The equity value of the unicorns we incubate through our investment programs will create the wealth that will sustain the running of the government.


Remunerating elected officials and government employees. Many countries suffer from corrupt government officials. If you were to understand the complexities around those issues while there is a lot of greed involved, many government workers in poorer countries have very low income and make it hard for them to live a meaningful life. Also, raising the salaries would be impossible due to the limited budget that government has to work with. If we want to run an effective government for the country, we need to be able to attract and retain the best employees around the world and that means competing with other governments and corporations for their talent. A possible solution is for the cloud country to have its own stock market on a blockchain for companies that are domiciled in it and to create an index fund for that market. The government would then buy options on that index fund on a regular basis and as part of the remuneration provide government employees with stock options to the index fund that will be vested at some point in the future. Some stock options could also be triggered based on the performance of the country. This would put both the government and the private sector on the same page without favoring a particular company and would provide compensation to its employees in a way that would enable it to attract the best talent in the world. If an elected official or government employees get caught taking bribes, they would lose all their stock options. This would make it extremely costly for external entities to bribe those in positions of power.


Government services. The only time fees should be charged for government services is to reduce irresponsible behavior or prevent abuse of the system. For example, all passports issued and renewal should be free. Replacement passport will be charged a fee and if the replacement is within 12 months of issue will be a higher fee (there should always be exceptions to these fees that is charged and maybe put it in the hands of the embassies so that compassion can be shown to those who need it).


Health Ecosystem. A large factor in the happiness of the citizens would be their health. Most countries have a healthcare ecosystem where entities in the value chain are rewarded based on the illness that exists. For example, doctors are compensated to manage illness not necessarily to prevent illness and increase the longevity of a patient. The same goes for hospitals, pharmacies, etc. A transformation to health care where entities within the value chain are compensated for keeping the citizens healthy and free from illness is possible if we build a new ecosystem for health care. It should also correlate in a way where doctors are compensated more if the patient is healthier and less if they are unhealthy. This can be applied to both the cloud country as well as physical country 2.0. It can be either a government-based health care system or a market-based health care system but the important part is building the ecosystem to reward for health and not illness.


Health blockchain. With a public health blockchain, we will be able to do this while maintaining privacy. On this blockchain, we need to store the medical records, the health and fitness data, and the providers of the health care. This blockchain would have multiple benefits; firstly it would allow a person to own his health records on a blockchain that is provider agnostic and secondly it will allow the government to measure the health progress of its citizens and make informed decisions to improve the regulations around health care and adjust its investment goals to direct the growth of companies in a way that would improve the health of its citizens.


Family. There is a strong correlation between happiness and the quality of close relationships in one’s life. Also, for society, loving families can prevent and solve a lot of society’s challenges. Strengthening the family ties will not only improve the quality of the society we develop but provide a solution through foster care and adoption for orphans or other at-risk children. We need to develop innovative family services on blockchains on a governmental level to do everything we can to help families thrive and receive support. One such application would be wills and trust on a blockchain to ensure that their families receive their rightful inheritance without tax or burden. Most of the blockchain applications are individualistic and some innovation could be done to enable family accounts on blockchains that allow family units to share resources, share risk, and provide micro governing support to the functioning of families.

Criminal System. If we are going to dream big about a cloud country, let’s redesign a new criminal system because we will have to address this sooner or later. At the very least we will have to debate whether to allow known criminals citizenship in the cloud country. If we can redesign a criminal system, what should that look like? I believe it should be a criminal system that focuses on the restoration of the victims and a path of redemption for the perpetrator. A boy that got caught breaking into a bakery to steal bread for his starving sister should not end up living his life as prisoner number 24601 and the store owner doesn’t receive any compensation to fix his broken glass either. Instead, the justice system should find a way for that boy to work towards fixing broken glass and also find a path for redemption for this boy while taking care of the family who is clearly living below the poverty line. We need a criminal system that doesn’t resort to incarceration without exhausting all other methods to restore the victim and reform the perpetrator. It also raises a question of whether we should have a criminal record on a blockchain and would mark prisoner 24601 for the rest of his life unable to expunge his record no matter how much he has done to change his ways. However, having put that on the table, I do realize there will always be those that will perform the most heinous crimes such as rape and mass murder and as a cloud country, we do have to determine the laws for those situations.


Military. The military provides a utility beyond just the defense of a nation, or a force to contribute help to other nations but it has unique and socially acceptable training that is effective. It is this particular method of training that is important for society because it could provide an avenue of redemption and restoration for some people where they can have an opportunity to be good citizens of the country. For example, for some crimes, instead of incarceration, it will be better to have the perpetrator serve time in the military as a way to reform him. Also for some others who had a challenging childhood, military service may enable them to be better people. Thousands of foreign nationals receive military training in the US each year and it may be possible to make similar arrangements for a cloud country. The military could also be deployed as UN peacekeeping forces or to areas with national disasters. 


Physical Country 2.0

Many of these elements can help physical countries transform into 2.0 versions of their country. Our pitch to physical countries is that the cloud country can help them leapfrog into the most advanced governmental infrastructure, we can provide investments through our multiple sovereign investment funds, and our citizens will be one of the most productive (and happy) residents they will have. In return, they need to provide permanent residence for our citizens to live, work, and own properties and businesses with equivalent rights as that of their citizens excluding the right to vote in their government. We will also have to negotiate unique tax treaties that will be a win-win scenario. There could also be a situation where physical countries align themselves with our values and radical idealism and not only leverage on the government services that we can offer them but to chart a path to transforming their country into physical country 2.0.





There would be 2 entities, a sovereign entity and a for-profit entity that is crowd-owned but managed by a team of professionals. We would start by issuing ourcoin, a cryptocurrency that is managed by the central bank of the sovereign entity. The sovereign entity would then have an investment fund that would start the for-profit entity and allow crowdfunding into it from the public.  The for-profit entity will then build the blockchain government services for both the cloud country and physical countries 2.0. This will allow physical countries to transform. Imagine if we can create a scalable solution where it can be implemented in the poorest countries with the most challenging technology infrastructure; this could be appealing to countries that want a clean and fair election.


With a sovereign entity, we could begin to pursue interesting options for our citizens to live without the challenge of dual laws where they are a permanent resident in their host physical country and a citizen of a cloud country. One option is to have very large embassies in the host countries where the cloud country laws are the prevailing laws in that physical location or purchase land from another nation (like the way Alaska was purchased).  Another option as mentioned in the paper is seasteading and this could be viable for a segment of the population. Extending the seasteading idea further, we could build permanent structures in the ocean or floating cities in the ocean and claim sovereignty over it.




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