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Balaji Srinivasan Profile picture
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Feb 27 • 8 tweets • 4 min read
Ukraine may not become a Russian client. Instead, Russia may become a Chinese client.
Depending on the degree of financial nuking, Russia may need an Iran-like relationship with China. It will buy all its products, take a cut, and resell them whitelabel on international markets.

China has sufficient scale, so it can’t be sanctioned.
Fits right into the NYT/CCP/BTC framework.

Russia is at war with the dollar ecosystem, and doesn’t culturally have enough connection with neutral Bitcoin, so will throw in with the Chinese yuan.

Those are the three ecosystems with the scale to survive.
If the financial nuking of Russia is sufficient to defeat it, that’s the transition of national security fully into the digital realm. Tanks don’t matter against sufficient social media and financial control.

Everyone then recalculates the board. The physical is now secondary.
Today the financial nuking may be justified, but tomorrow it may be abused, as it was just yesterday in Canada.

So: every country that doesn’t want to become dependent on the US or PRC will have to go crypto.

India and Israel may move hard into web3 to maintain sovereignty.
For Israel, the reason to prioritize web3/BTC is obvious.

There has been a growing BDS movement in the US, and last summer showed a substantial turn for the worse. Will financial nukes be threatened in the next brouhaha? Don’t know, buy insurance.
bariweiss.substack.com/p/the-bad-opti…
For India, it also needs web3 & BTC to maintain sovereignty vs US/PRC. These links give a detailed case.

1) Why India Should Buy Bitcoin
balajis.com/tag/india/

2) Great Protocol Politics
foreignpolicy.com/2021/12/11/bit…

3) How India Win/Wins The Future
inc42.com/features/india…
Recall that nuclear weapons were first used by the US vs Japan.

But once everyone saw how they could be used, they eventually threatened everyone, including the US itself.

If the financial nuking of Russia brings them to heel, despite their tanks and nukes, we are in a new era.

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More from @balajis

Balaji Srinivasan Profile picture
Feb 28
Best case outcome?
- Ukraine & Russia agree to cease-fire
- Ukraine says they won't join NATO (they don't need it, clearly)
- Putin gets to declare a "win", pulls back
- Nuclear crisis averted
- Then, @navalny allies with @VitalikButerin to win a real election and rebuild Russia
I'm serious on the last bit. It must be a fair election, or else it'll feel like US regime change.

But as an idealist, the Russian people & world deserve better than Putin. And as a realist, it's a security threat to leave their economy like this:
Winning the war is also about winning the peace. The Russian people won't want a repeat of Yeltsin. That's why many supported Putin. But a free & fair election (perhaps monitored by neutral observers) where they vote out Putin & vote in Navalny + Vitalik? That'd be an upgrade.
Read 6 tweets
Balaji Srinivasan Profile picture
Feb 27
Still processing the implications.

This is a financial neutron bomb. Bankrupts people without blowing up buildings. Hits all 145M Russians at once, every ruble holder. In a maximalist scenario, possible collapse of the Russian economy.

Btw, Russia is a nuclear weapons state.
If these (unconfirmed) visuals are real — as seems plausible given the news — it’s the complete opposite of what Putin may have contemplated in terms of a “limited” intervention like Georgia 2008 or Crimea 2014.

This is now something every Russian is harmed by. They’ll be angry.
I don’t know how bad it gets. Maybe the purported ~$240B they have left is enough to keep the Russian economy from collapsing. Maybe China extends them a special Belt and Road deal, a $100B credit facility in return for rights in the Russian Far East.

But things could get nasty.
Read 7 tweets
Balaji Srinivasan Profile picture
Feb 27
This is much bigger than even the SWIFT shutdown.

Russia made the mistake of holding its assets on computers where others have root access.

With a keypress they got shut down. QWERTY was in retrospect much more of a threat to them than NATO.
washingtonpost.com/business/2022/…
Russia appears to have gamed out the physical war, but not the digital war.

We’ll see what happens. There may be more left in this insanity.

But the cloud may now be a more important theater than land, sea, or air. If your adversary can just push a button to win, you lose.
This remarkable video, apparently from a day or so ago, shows that the financial attacks may be getting to Putin.

I’m amazed this is public for a variety of reasons. But if real…he’s trying to reassure the Russian economic elite.
Read 4 tweets
Balaji Srinivasan Profile picture
Feb 26
Start with four camps.

1) The US is not in decline

2) The US is in decline, but it can be reversed

3) The US is in decline, and it can’t be reversed

4) The US is in decline, and it can’t be reversed, but we can blunt the impact and build a new liberal order on the other side
Camp 1 are those who dispute the US is in decline.

Many people are in denial. Some get mad if you point at qualitative and quantitative evidence.

But only the paranoid survive. Denial of decline means you cannot even diagnose the cause, let alone take measures to reverse it.
Camp 2 believes the US has declined, but it can be reversed.

While they have *very* different visions of what that reversal means, both centrist liberals like my friend @Noahpinion and MAGA types want to see America “awake from its slumber” and start kicking butt again.
Read 14 tweets
Balaji Srinivasan Profile picture
Feb 25
The militarization of US tech may be inevitable. But before we jump into privatized cyberwar, let's think through possible consequences.

- Damage to millions of innocent Russians
- Targeted retaliatory cyberattack
- Unpredictable escalation into global cyber WW3

A thread. 🧵
First, collateral damage.

This proposal is essentially privatized cyberwar on millions of innocent Russians. In my view, better to do targeted positive acts (offering asylum, helping dissidents) or targeted negative acts than untargeted broad attacks.
Second, retaliatory cyberattacks may ensue.

Using US tech power against millions of Russians in this way isn’t like a typical deplatforming, where it's a consequence-free act by a huge company on a powerless individual.

This is Russia. They may hit back, in nasty ways.
Read 12 tweets
Balaji Srinivasan Profile picture
Feb 21
51% democracy vs ~100% democracy

In a 51% democracy you just barely pass the bar, and then assume all will do as you say. They won't.

The ideal is actually a ~100% democracy. An opt-in society, where everyone has chosen to be there. And can leave.
Set aside the question of whether ~100% democracy is practical for a second. (The ~ indicates that 100% is an asymptotic goal, even if not fully achieved.)

Once you agree it is desirable — and morally superior if feasible — then you start thinking about whether we can build it.
The fundamental concept is that democracy is about the *consent of the governed*.

If you have only 51% support, you have the absolute minimum necessary level of consent.

It's a democratic Fosbury Flop. You just barely clear the bar.
archive.is/aP2hv#selectio…
Read 23 tweets

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