Building a Digital Country With Draper Nation's Vikram Bharati | Blockcast 26

You've heard of digital money, you may have heard of digital identities, but have you heard of a digital country? Draper Startup House Global Founder, Vikram Bharati, is leading Draper's initiative to build a digital country with help from the blockchain. Known as Draper Nation, the abstract concept feeds rather seamlessly into the Web3 narrative of decentralisation and community building, but how realistic is it? Join us as we ask Bharati more about his vision for a world where physical and digital countries can coexist, and what citizens can expect from such a paradigm-shifting form of government.

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Transcript

SPEAKER_00: 0:00

Hey there, Crypto Curious gang. It's time to plug in and play with the Blockheads at BlockCast. Strap in for a weekly whirlwind tour through the blockchain jungle, where NFTs, shiny coins, and crypto titans tango. Serve that with a side of spicy insights and the crunchiest bits of the digital sphere. Let's dive into the decentralized deep end. BlockCast is live in three, two, one.

SPEAKER_02: 0:34

Hi everyone, welcome to another episode of Blogcast. I'm your host and producer at Bloghead, Zheng. And with me is our co-founder, Kohan.

SPEAKER_03: 0:42

Hi everyone.

SPEAKER_02: 0:42

Today we brought on a special guest and actually one of our neighbours. They have a space or quote-unquote house right beside our office, just like less than a minute away from us. Can we welcome global founder of Drupal Startup House and co-founder of Drupal Nation, Vikram Bharati to the show. Hello guys, nice to be here. Great office. Thanks, nice to have you. So you have an interesting background. Before you got into the entire Draper ecosystem, you were actually vice president in JP Morgan, Chase and Co, right? You left and went backpacking around the world. It's not entirely uncommon, but it's still sort of like unconventional, especially with a role like yours. Maybe you could let us know, just give a brief introduction about yourself and why did you decide to do that?

SPEAKER_01: 1:26

I was born in a place called Nagaland, which is a very small state in the northeast of India. My father he's from central India and after he graduated from college he joined the government services and he was stationed out in that part of the world and his job was to unite a very civil unrest geography to mainstream India which was like New Delhi and this part of India culture is completely different from India the food is different the language is different essentially they're Burmese and so when the British left India they sort of marked up some territory territories that was essentially became part of India. And as you would assume, the people were not happy. And so for a very long time, there was underground movements, a lot of civil unrest, essentially. My father was very dedicated to his job. If he wanted to have any success in what he was doing, he needed to integrate himself into the society. He thus married my mom, who was a local. And essentially, I sort of saw firsthand what it's like to be part of a culture that doesn't quite identify with another culture that is trying to integrate them into their society. I guess somehow this is sort of relevant to Draper Nation in a way. So then I ended up moving to the U.S., went to school there, and I've spent most of my life in the U.S. I worked at J.P. Morgan for almost a decade. My professional career started in the beginnings of the last financial crisis. My first job was selling mortgage-backed securities to Lehman Brothers, and so that's sort of like... You're one of the bad guys. Well, it was actually really fun for me because it's kind of like you learn the most about a car when the car is broken down for me it was very interesting to sort of see the parts and and try to understand the financial infrastructure of the world almost a decade of that I essentially wanted to take a break and wanted to go to Argentina and live there for six months and that ended up being two years of me traveling and going to nearly 60 countries around the world I sort of got addicted to traveling and didn't want to stop and in a way wanted to sort of see more and more and then after two years I got really tired of sort of living out of a a bag doing adventure. So then I sort of settled down.

SPEAKER_03: 3:36

So you've had like an inherent interest in community, I guess, right? From your upbringing and then, I guess, backpacking around the world, I guess you saw those communities and cultures and everything. Yeah. You inspired the Draper link.

SPEAKER_01: 3:47

Yeah. I got super, super fascinated by the backpacking culture and I loved the idea of small spaces where you meet people from all around the world and have sort of very unexpected experiences. I kind of felt like that was really up my alley and it was... a good fit for my personality, you know, generally a social person. And so I really sort of fell in love with that culture and sort of gave myself two years to kind of really live that culture. I suppose that was sort of the beginning of my interest in community building and bringing people from all around the world together. It was two years of amazing times.

SPEAKER_03: 4:27

I mean, I kind of get what you mean. I mean, we visited the Draper Starter House. It feels kind of cool that there's lots of different projects going on and people from all kinds of backgrounds. It kind of feels like like that kind of vibe when you go to a backpacking hostel and you meet all these kind of people and stuff. It feels like there's some sort of inspiration there.

SPEAKER_01: 4:43

There's definitely magic for sure. So one of the insights I had while I was traveling was that all of these spaces were really good at travel and tourism and bringing communities together. The missing part was that it was only travel and tourism. And I felt like you could do much more with small spaces than just pub crawls and street food. I felt that you could actually build something where the people who are in that environment can build skills, which would be beneficial for them in the long run. And what I mean by that is most of the people that i was encountering were young they were sort of lost they were in this life in this phase of their life where they were really seeking adventure they wanted to learn they wanted to put themselves in new environments so they're very much in the spirit of learning and adapting to new things you know that's the best time to learn i kind of felt like if all of these houses had some sort of a skills training or learning more than just you know, which is the best place to go for cheap food, then it'd be a much more impactful kind of thing. And so that was sort of the genesis of, hey, why don't we build startup houses that are essentially backpacker hostels, but we're doing events that are more than just pub crawls. You know, they could be talks, it could be people sharing their ideas and mentorships, etc. So that was sort of the very initial rough idea that all these people are already sort of coming and congregating in the spaces. So why not layer on more and then try to connect all of these houses together and sort of build a bit of an infrastructure where you can then have a foundational piece that you could then do a lot of other things

SPEAKER_02: 6:31

was this tribe theory because yeah you mentioned this is everything is called tribe theory before you started draper house

SPEAKER_01: 6:37

that's right

SPEAKER_02: 6:37

is there like a timeline you could share with us how it all started and then how it evolved eventually ending up into like

SPEAKER_01: 6:43

draper house sure we started tribe theory in 2018 which was next door next door was was a capsule hostel. I used to walk past that all the time. And one day I said, hey, it's time to build this thing, this idea. So I went in, spoke to the owner, bought the business and turned it into a startup house. And so that was March of 2018. So it's been six years. That was our first kind of space. And just by us sort of positioning an existing space to a startup house, sort of magic started happening on its own because people sort of self-selected themselves into that space because they would see it on booking.com and they would say, hey, this looks cool. People who wants to be there, like wants to be there. Right. Exactly. So then sort magic started happening so that was 2018 two years into that we had about five or six of these houses around the region one day I got an email from Tim Draper I think one of his students from his school had stayed in one of the houses somewhere and he was at a football game somewhere or like some sort of a football party and he had heard about this and he got really interested I went and met him and he kind of asked me what's your big vision for what you're doing. And at the time, my vision wasn't really that big, but I did sort of understand that what we were doing could be huge because no one else was really commercializing like the hacker houses. And so we looked at a lot of the hacker houses around the world and they were very much sort of mom and pop sort of operations. You know, you have a house, you bring your friends over and you sort of get together and unofficially kind of do stuff, right? That's sort of generally a hacker house and the thought process was well can't that be commercialized as a sort of a chain where you sort of take that concept but you do it in a bigger way with better operations, with licenses, and sort of create a bit of a new category. And so that was sort of the thought process. And if you ever met Tim, he loves the idea of these network effects. And so generally we think of network effects as like digital, which is true. Things spread very fast digitally. But you can also have network effects sort of physically if you have the right sort of model. And with these sort of like pop-up startup houses around the world they're all sort of connected there could be some sort of a virtuous network effect that can happen and so i think that was an interesting idea he decided well he you know he asked me if i would join his network build it under the draper umbrella for me that was a no-brainer

SPEAKER_03: 9:28

what's the uh business model of a startup house

SPEAKER_01: 9:30

there there are essentially three lines of revenue. The first and the most conventional and traditional revenue model is hospitality. And so we have startup houses around the world where people live, people work. It's a co-living slash co-working kind of a space. And that's a very conventional hospitality business model. It's cash flow. If you do it well, it's about a 20% profit margin type of business. Just like a normal sort of hostile kind of a business, right? So that's one revenue stream. And that's actually good because that pays for the bills, pays for the space and the people that work there, etc. So that's sort of like the foundational model. The second is education. So we do a lot of education programs around the world in various different shapes, sizes, etc. And so there is a revenue stream around that. But I would say the most valuable and the highest margin revenue stream is investing. And so we have a fund attached to the startup houses and we invest in companies that we see globally. And that's where I would say we get the deal flow in a new way that is sort of unconventional. We get to see interesting ideas before a lot of other people see it. And so hopefully, you know, some of those companies do well. And so that's sort of, you know, the long-term business model. But those are the three revenue streams.

SPEAKER_03: 11:00

And you're very focused on Web 3, right? That's the main...

SPEAKER_01: 11:03

We're actually not focused on Web 3. Web 3 is a... Well, Web 3, it's a big component of it, but we are generally very open to anything. We encourage people in these spaces to to kind of experiment and try whatever it is that they have an interest in. And so Web3 surely is a component of that, but generally we encourage just entrepreneurship in general, you know, to sort of build whatever it is that you feel you're good at.

SPEAKER_02: 11:36

So can we just walk up to like one of the Draper houses? Is there like an application or how does it, what does it mean to be like part of the membership? How did we get into like?

SPEAKER_01: 11:45

The startup houses are actually very open. It's open to the public. Anyone can go in. Anyone can go and stay there. And the reason why we've sort of kept it open is because we tried keeping it very exclusive and closed in the beginning. Tried both. exclusive as well as open. And we realized that keeping it open was a better model. Firstly, it kept operations much lower. You know, you didn't have to screen through stuff and have that layer of exclusivity, which requires work. And then secondly, because we sort of target the top of the funnel, which is like very early folks, you know, who are kind of experimenting, because that funnel is so big that keeping it open means you sort of see a lot more than if it was very exclusive. we noticed that there's a lot of programs and different types of organizations that are exclusive where there's like applications etc and I felt that there was so many of those around the world that just keeping it open was a better model because you would have a lot more encounters with things that you would generally not see if it was sort of closed

SPEAKER_03: 12:53

basically we met because it was open I think

SPEAKER_01: 12:56

by the way the one in Singapore is probably not the best example because that used to be a real startup house where people would live, but it's not anymore. It's sort of like a community space, workspace. But if you go to say, you know, Bangalore or Hyderabad and you kind of see these people coming in, coming out, and they're staying there for a few weeks or a night or 10 days or six months, and you just have these collisions that you would have like at a hotel or whatnot. And so those types of collisions, I think are like very interesting And I think the results of those collisions are just serendipity, which is, I think, fun. Nice. How many houses are there right now? We currently have 15 houses around the world. And hopefully... a 16th one opening up in Korea soon.

SPEAKER_02: 13:47

Now we're going to enter this segment where we're going to talk about the Web3 part of Drupal Nation, Drupal House. We have several interesting things that we'd love to know more about and hopefully you can share with our listeners and us as well. We understand that you're launching something called Drupal Nation. What is it and why is

SPEAKER_01: 14:03

it on the blockchain? I feel we're sort of reaching this moment just to give an analogy. Maybe it's not the best analogy, but it's the best one I can kind of think of at the moment. When there was a company called Quickster, I don't know if you guys remember Quickster. I used to be a subscriber of Quickster. They used to sell DVDs. through the mail so when you wanted to watch videos you would you would have a subscription and you pay i think ten dollars a month and you get three dvds a month oh okay oh yeah yeah we had i love film in the uk something similar right so dvds through through the mail and at one point quickster then pivoted into netflix because they they realized that hey streaming is going to be the future and so they went from dvds through the mail to streaming now when quickster sort of decided to go into streaming, they were way, way, way early. They were too early. And I actually remember there was a, including myself, it was a huge commotion because they were going to kind of like focus on streaming. And that's when we had dial-up. barely kind of working and so everybody was like you guys are crazy we want the dvds because we couldn't fathom the fact that they would be streaming i kind of feel like we're in like this moment where we've spent six years building this physical startup houses around the world and we're like in this physical hardware kind of business which is by the way very important and we're going to continue focusing on that in the future because they're kind of like our embassies but i feel that the future is going to be more on the digital realm and so we're We're sort of making this a little bit of a transition. Maybe transition is not the right word, but we're making this effort to kind of try to see what's in the future and try to be a little bit ahead of the future. Doing the startup houses around the world over the last six years, in a way we're kind of building communities and societies and we've learned quite a bit about navigating organizational structures, how to build and bring people together in different types of environments. in a way, it's sort of a mini experience in building small, small nation states and in a way, in like different political jurisdictions, etc. So I think it's been a very good foundational experience for us. And I think we're kind of primed to then experiment with, okay, what's the future of societies, and we feel that the digital country idea is something that's sort of primed for maybe we're a bit early, but you know, these things move fast. And where do we see things happening in 20 years from now or in 30 years from now? I kind of feel like that's a distance in my head at least. And that's not a very long time.

SPEAKER_02: 16:51

What does blockchain or Web3 have to offer you guys that you want to choose this route instead of like the current tech that like kind of offer you?

SPEAKER_01: 16:59

I think it's good to maybe have a little bit of context in terms of some basics, which surprisingly, I found that a lot of people don't know the basics of countries. So for instance, today we have 195 countries. Yeah, I think roughly, I think something around that. Yeah, it's about, you know, close to 200 countries. 50 years ago, there were only 70 countries. And 100 years ago, I think there were only about 30 countries. And so countries and nations as we know it today have been forexed in the last 100 years. And after World War II, that's when a lot of the new countries in Africa and in Asia started popping up because colonization was sort of ending. And so a lot of the countries started becoming independent. But in 100 years, we went from roughly 30, 40 countries to 195 countries. That's a lot, actually. which is a lot which when I sort of looked at the stats I was kind of blown away because I always sort of assumed that it was kind of like like this most of the time you know like a lot of countries around the world but but the truth is countries and nations as we know it today have always evolved over time they've changed and they will continue to change and the underlining reason for the change has been technology and you know when I think when fire was probably discovered or we figured out how to control fire. We probably had a tribal society structure around the fire, which probably didn't exist before. And I think when we sort of discovered maybe iron and steel, I bet new countries popped up because there was more military power. So I think all of these technologies, the printing press, allowed people to kind of push their ideas and convince people to join their camps and whatnot. So technology has always been the underlining reason why we went from 30 countries to close to 200 countries. Maybe it's not the only factor, but it's certainly a central factor. Big role in terms of social economic changes, political changes, also based on our ability to communicate and organize in different ways. And so I think it's very possible to assume that as we have new technologies, they're going to be critical in the way countries are developed or managed in the future. And so I think the internet did that to a lot of the stuff. So what's sort of like the future of technology? And it seems that it's in the blockchain space and it's in more sovereignty of information and knowledge and ownership of digital assets. I think it's not far-fetched to say that in the future, countries will be arranged around these new technologies. So that's sort of like the central... idea

SPEAKER_03: 19:58

so there's 195 countries for people to choose from uh why would they want to choose your digital country

SPEAKER_01: 20:05

hopefully digital countries become more normal in the future than the idea today so i think when things become a little bit more normalized people get used to it but i think the central point of why digital countries will appear, and a lot of them will succeed and a lot of them will fail, is because they will be able to offer products and services to their citizens much better and cheaper than how it's being done today. And as some sort of basic stats, I don't know how accurate this is, but I think it's generally right. 80% of government services can be done digitally. So if you think about, we were talking about SingPass, we're talking about licenses, and titles and benefits and legal, a lot, like 80% of government services, actually some say like maybe 90% in like very digital savvy countries, like 90% of government services can be done digitally. And those who are doing it digitally do it better than those who are doing it based on paper and pen. And so I think it's, normal, I think it's practical to sort of assume that if you are a digital country, where everything is done digitally, that you'll be more efficient, cost will be much lower. And I think it will include a lot more people. When I sort of look at the 8 billion people today, I think it's not farfetched to assume that most of those people don't get any government services. I think us, you know, being part of more modern countries, I suppose we're probably the exception. But Maybe four or five billion people in the world don't really get anything from their country. What do they get? What does a government provide them? Probably provides them some sort of identity, that they have some cultural language kind of similarity. But in terms of services, they probably take more from people than give them anything. And so I think if you can have a digital country where there's no borders and there's no geography and you're able to provide cheap services, good quality services to anyone in the world, I think it's okay to assume that the market size of that is like... billions.

SPEAKER_03: 22:19

What kind of services do you visit?

SPEAKER_02: 22:21

Yeah, maybe break it down a little bit, like fundamentally, like what kind of services and then how do we get into Draper Nation and how is it on the blockchain, for example?

SPEAKER_01: 22:30

The way we're sort of looking at the stack is I think first and foremost, there has to be a mechanism of identifying people. So identity is going to be the first sort of thing. Like how do you identify people on the internet? You know, we were talking earlier, there's so many startups that are trying to build sovereign identity systems through different tools, etc. So I think that's the first thing. I don't know if anyone's really cracked it, but we're integrating a lot of partners who are on the forefront of digital identity, sovereign digital identity. So I think that's the first step. And I think if we're able to do that, there's a lot of value in identifying a human on the internet. The second thing is in the order of services. We talked to a lot of people who signed up for our beta or waitlist, and we asked Ask them, what does it mean for you to be part of a country? And I think most people said it's about safety and security. I think safety and security seems to be one of the main reasons why people identify to be an American or someone from Australia, because their government provides them with some level of safety and security. So what is that safety and security? Well, it's things like pensions. It's things like health care. And I think these things can be done digitally. So that safety and security part, I think can be done digitally. In terms of legal infrastructure and legal frameworks to sort of protect citizens, I think that can be done digitally. In fact, I think it probably could be done digitally better than not digitally. And so those are sort of like the immediate, very basic, kind of things that people want. But I think past that, what we're thinking is people need access to microcredit. And the reason why there's really no universal way of getting microcredit is because I don't think there's a universal reputation system where you can say there's a global credit system or a global reputation system that you can rely on to get credit. Every country has their own form of reputation system for credit. But I think we have an opportunity to build a global reputation system for credit for whatever it is that you need. Credit for your personal life, for your business life.

SPEAKER_02: 24:41

Only one credit we can use for everything.

SPEAKER_01: 24:44

Yeah. So we're actually thinking to experiment as our first product, a micro credit program where you can get say$10,000 of credit and it's built on this reputation system that we want to build through the passports and activities, etc. These are some of the things that we're kind of thinking. But I think the holy grail for us is going to be if we are able to build political treaties with other sovereign countries. It's ambitious. It's ambitious, but there's precedence. There's actually precedence of these things. It's not difficult to sort of assume that, you know, we've talked in small nation states who are going underwater and there's a lot of other sort of problems they have. They want to attract people's minds and not their feet because attracting people's feet is very difficult politically. But attracting people's minds which is also then a revenue stream in terms of taxation, etc. These are things that a lot of governments are now actually starting to open up to. And so as population declines, as small states in these parts of the world have environmental challenges, I think the idea of building treaties with digital countries that may have a population of very desirable people with a lot of intellectual ability, if we're able to do it, I think that's going to be sort of like the stamp to say, okay, digital countries, the political treaties is a thing. And that could sort of set the stage for this sort of

SPEAKER_02: 26:13

wave. Are you guys intending to actualize this? Are you guys actually talking to existing states right now? Is there some sort of agreement? Or

SPEAKER_01: 26:22

how does it work? So in the timeline, our first thing is we need to put a product out on the market. So we don't have a product on the market. It's sort of all white paper and theory. And so our first product is launching next week. It's a digital pass? There's going to be a nation app where you can start building your reputations, get a passport, get your scores, etc. Anybody can just join and apply for the passport? So for the launch, it's going to be done in person. And it's going to be done at a conference, the Draper Conference in San Mateo. And we're going to onboard people who are actually waiting to get onboarded. So they're going to be there in person and we're going to onboard them. So that's our first step. And we do understand that building this thing is very ambitious. And so we're going to have to do it slowly and in steps. And instead of sort of like opening it up to the whole world right away, I think we're going to do it in increments, slowly with a select group of people, test out the product, get feedback. And I, unfortunately, or maybe fortunately, I mean, I don't know how you look at it, but I think the initial groups of people are not going to be your mass target audience. I think the initial group of people are going to be the early adopters who are going to be interested in the idea. They're probably well-educated and have money or like tech forward. They may not exactly be our target audience in the long run because we want this to be a mass product. But it seems like that's sort of like... the starting point.

SPEAKER_03: 27:52

So you have citizenship with Drapen Nation, but then you have your American or whatever citizenship as well?

SPEAKER_01: 27:59

Yeah, so the thought process here is there's no way anyone can kind of replace the existing political system, right? These countries are probably, they have armies and, you know, so the idea is not to sort of like replace existing countries. I think in the future there's going to be thousands of countries and most of them are going to be digital countries and they're going to be complementary to each other and And we kind of see that governments are going to be looked upon as service providers where the human can pick and choose who they get affiliated with based on what value systems they have and what they have to offer. And so it's kind of like. We pick a mobile carrier based on pricing and coverage. We think that that's the way governments generally should be and probably will be in the future. And there's going to be thousands of countries. And they're not going to be mutually exclusive, as in you can only be a citizen of X, Y, and Z country. I think you can be citizens of many countries, and you can select and pick and choose. And I think physical countries are going to build treaties with digital countries because it's in their best interest, because they're are going to select people's minds and bring a lot more value to the physical country. So that's sort of the top.

SPEAKER_03: 29:15

How do you raise like taxation?

SPEAKER_01: 29:16

I think taxation is going to be very difficult, in my opinion, because there's sort of two ideas here. One is if you're a digital country, your cost of operating a country is very low because you don't you don't have

SPEAKER_03: 29:28

But you're saying you're going to provide citizen services and stuff, right? It's got to come from someone's pocket, right?

SPEAKER_01: 29:33

This is probably the most important sort of idea here, which is going to be what's the economic model here? What's the economic engine of this country, right? Because whether you're a digital country or a physical country, you're only as valuable as your economic power. And so this is where we are spending most of our time, trying to understand what is going to be the economic engine of a digital country. And I think it 100% boils down to the central bank. We're thinking that we need to have a central bank that is on the new rails. So it's an internet sovereign wealth fund that invests in a lot of the ideas of the people. This is where I think your question of why the blockchain? Because it needs to create a new economy. I don't think it can be based on the old economy. And so the new economy is surely a tokenized economy. A new economy is with the new money rails and not the old money rails. And so I think the central bank economy tokenomics and the value creation of where the central bank then, how does it make money? Well, it needs to have two revenue streams, I think, transactions and investments. And just like we look at any other sovereign wealth fund, let's say, let's look at Temasek, for example, as a crude example, because I think it's very different. But, you know, when Temasek started, like they had to build an airline, okay, so they're investing in airlines, investing in etc. And that sort of like really was one of the components of the nation economics was a sovereign wealth fund. And so I think we can learn a lot from that kind of traditional business model, and then sort of create a digital twin or something

SPEAKER_03: 31:11

like that. And what about the governance? Who decides the direction that JPA Nation goes? Is it like a democracy to people vote for staff or how does it work?

SPEAKER_01: 31:20

This is interesting because if you look at DAOs, there's not many DAOs that have been really successful. I think in theory it makes a lot of, you know, it's great to think about how it could be an organization that's completely decentralized. And I think that is true, but no one's really cracked the code on that. So I think there needs to be a little bit of a hybrid of a little bit of centralization and what are the components that can be centralized for decision making. Our idea is that we're going to have the citizen token. The citizen token is going to be staked and based on how long you stake for, you get voting power. And so this is where the tokenomics really come into play. I really feel that the only way to make this economic engine work for the new economy is that there needs to be a central money denomination that gives you voting powers, that gives you the ability to access and vote and have some sort of a decision-making power and participate in the new economy. And so that's where our thinking is. So you mean

SPEAKER_03: 32:23

like the more you stake or less or whatever, the louder your voice is?

SPEAKER_01: 32:27

I think you have to be a participant in the economy in order to have the ability to then make decisions. Because I think it's very easy to, it's nice to think that, okay, you can be a silent participant and not have any participation at all and still have the same type of voting. And I think that kind of like voting system is maybe inherently flawed. Because the idea of one vote, one person, inherently, I think, for a digital economy may not work because this is a new system. And I think that the The key thing here is participation and anyone can participate. But you have to participate in order to get any of the value from the economy and any of the value from the decision making.

SPEAKER_03: 33:11

And then does it not feel like it's a country where the rich will continue to get richer and have their way through what direction the country takes? Because if they've got a bigger stake in it, they can vote. Yeah. They have more of a vote than, say, someone who can't afford that many tokens to put in. Then there's an imbalance.

SPEAKER_01: 33:28

I don't think it necessarily has to be that way. I think it can be participatory as in anyone can participate, but you have to participate. And now the question is, what does it take to participate? Like, do you have to be rich to participate? And I think if you build the system in a way that it doesn't necessarily have to be that way, then it doesn't have to be the rich keep getting richer and have more power. I think you can build a system where people can participate without even being rich, but you have to participate consistently, build your reputation up, and you can do that without money. And so like initially we are going to make it so that you get a lot of citizen tokens and points for like participating in things like events and, you know, decision making that are small, you know, becoming an ambassador, starting your own little thing. You do all of these things, you get points, which can necessarily not be bought.

SPEAKER_03: 34:23

Yeah. I mean, it sounds super, it's super upshot and also super, super interesting to think about.

SPEAKER_01: 34:27

And I think, you know, the general question is I've been really reading about liquid democracy, which is a very interesting concept. So liquid democracy is the general idea of what does it mean to have the power to vote. And so if you look at sort of traditional democracies. You vote for someone that is in office for four years or eight years and you get one vote. That person then doesn't necessarily have to then show results because they're in office for, you know, four or eight years. But whereas liquid democracy is that your votes can be transferable, your votes can be delegated, and then whoever wins those votes has to then show results. So basically anytime I I can just revoke my vote for you. Right. And this is why I think building a digital country is interesting because you can build a new system, which means whatever the committees or whoever has been voted, all of their stuff is there for anyone to see. I think the transparency of saying, okay, is this person, have they done what they kind of promised? And if not, then can I renege or remove my vote? So that's the general idea of Liquid. It's fluid. and it's not set in a boundary of like X amount of years. It's actually generally pretty fluid. I think that's an interesting concept. No one's really done it, but I think it's

SPEAKER_02: 35:54

an interesting idea. What sort of use cases have you guys thought about in terms of voting, any sort of things that you guys have in mind?

SPEAKER_01: 36:02

I think voting on what the central bank does and what it invests in, the levels of, say, microcredit, the makeup of the reputation system, how do you create that reputation stack. I think all of these things can be stuff that people can vote on.

SPEAKER_02: 36:16

Will these votes be public?

SPEAKER_01: 36:18

It will, right? Yeah, it'll be public, though you have to be a member of and be a participant member to be able to like do anything.

SPEAKER_02: 36:26

Let me a concern if I'm usually like any voting is like it's private, right? What if there's something, I don't want people to know that I'm voting for this guy. My votes are like on the block here now. Everyone

SPEAKER_01: 36:39

knows I'm voting for him. I think there's a solution to that, which is I think you need to have a tier system. So maybe not everyone is bucketed into one sort of tier. Maybe there's tiers based on your participation levels, your economic participation. It's kind of like you get all the privileges for one sort of tier. And so I think you can build a structure so that there could be some sort of anonymous component, though we haven't quite worked out those kinks yet.

SPEAKER_03: 37:15

Yeah,

SPEAKER_01: 37:16

still

SPEAKER_03: 37:16

working on it. You know, you're talking about safety and security of the countries. I'm curious to know... For example, something like healthcare. It's very different in every country. Every country's government approaches it differently. But then if you're part of the Draper Nation, you're an active participant, how would Draper Nation help its citizens with something like healthcare? Because they're physically, whilst they're subscribed digitally, they're physically somewhere, right? They're physically in Singapore. They need to pay the hospital bill in Singapore. Is that something that Draper Nation does? helps with?

SPEAKER_01: 37:47

Yeah, so there's two components to this. In terms of healthcare, which is probably the most complicated topic, because healthcare is generally complicated in any country. But I think if we're going to build a new system, a digital system, then we need to embrace sort of more of the newer healthcare, more of the new healthcare solutions. I mean, what do I mean by this? If you look at sort of institutional healthcare systems in, I'll take the US, for example, because I'm familiar with that system. I would say that the US healthcare system is good compared to a lot of countries, but it can be a lot better. And the reason why it's not a lot better is because it's big. It's difficult to change the healthcare system in sort of any sort of country. So it has pros and cons. I think the pros of building a digital country is that you can from day one embrace a lot of the digital solutions for healthcare. And we know the stats, like 80% of healthcare spending is built on chronic diseases, which is like legacy stuff, right? And so I think these are like very basic stuff that you could say, all right, in the new system, if you embrace the new healthcare solutions, then surely we're going to have to use a lot of like AI solutions for predictive healthcare, et cetera. I think we need to embrace a lot of the newer solutions The physical part, okay, which hospital do you go to? I mean, I think these could be service providers that we can have partnerships with. These could be treaties that we could have with different sort of countries. I'm not so worried about that piece because those can be service provider partners that we can sort of build relationships with. I'm more sort of concerned about, okay, what's the new system of healthcare in a digital country?

SPEAKER_03: 39:25

Yeah, but would that not depend on the locality of where the person is? Like, for example, I'm from the UK, right? So healthcare is technically free. Whereas if you're from the US, it's not. If we're both citizens of Draper Nation, then surely Draper Nation would need to, if they want to help both of us, respectively, then it would require, we would require different things from Draper Nation for healthcare, right?

SPEAKER_01: 39:48

You know, it's interesting. We've been speaking to a lot of potential healthcare partners without naming names because they're like very early discussions. We're talking to telehealth providers, like doctor anyway. Yeah, yeah. but done on a sort of global scale, right? And it's very interesting to learn that 80% of the consultations can be done digitally. So whether or not you go to the hospital or you do it on the app.

SPEAKER_03: 40:14

Yeah, they realized that during COVID in the UK. Right. That actually loads of them, they can just iron

SPEAKER_01: 40:18

out immediately. So 80% of like healthcare can actually be done through digital consultation. And out of those 80%, 80% of healthcare consultations are stuff that are general pretty easy like go take a Tylenol or like you know like prescriptions that you can get over the counter like a cold food yeah you know I'm worried about this rash okay you know here's a cream but it turns out not surprisingly that 80% of the burden is actually very basic things it's that 20% that is the most expensive that is more specialized that is maybe we don't worry about the 20% in the beginning you know maybe we say okay what's that 80% maybe that's where we start we don't want to deal with complicated cancer chemotherapy because that's very difficult but it turns out 80% of healthcare is the 80% of the easy stuff so maybe that's the starting point and you know what most people don't even have access to that if you think about it most countries don't have access to the simple stuff

SPEAKER_03: 41:21

yeah so you're suggesting you have like a telecommunications

SPEAKER_01: 41:25

I think telehealth that's a low-hanging fruit and it just turns out that most people in the world don't even have simple telehealth. Now, if you're European, like, you know, we talked about my co-founders in Portugal. Portugal has free healthcare and, you know, they pay 50 euros a month. So maybe the Portuguese are not as hard. But most people in the world, you know, don't have basic teleconsultation, which the margins on that is actually very, very, it's not expensive to do telehealth.

SPEAKER_03: 41:54

But then I guess, leading on from that, you're having a telehealth, you set up a telehealth business for Draper Nation, or actually any business for anything, right? You want to use your business to help. You still need to be located somewhere, right? So you set up a business in Singapore, telehealth one. You still need to be registered as a company in Singapore, America, wherever, right? How does that work in terms of you contributing your business to... You still have to pay corporation tax or whatever to Singapore, but then you also pay it to Draper Nation? I guess what I'm asking is, can you register a company under Draper Nation and does that conflict with registering it?

SPEAKER_01: 42:30

I think initially we're not going to be the service providers. I think we're going to partner up with, say, a global telehealth provider and what's the revenue stream there? Well, there's transactions, there's like referrals, et cetera. But I think that's not going to be what generates the greatest value, economic value for the central bank. I think where the economic value is going to be is for us to say, who is creating the next telehealth company that is going to be the telehealth company for a digital country? And then how do we invest in that company? Building a digital nation can't be done in a vacuum. I think we're going to have to build the entire ecosystem. And I think this is where the economic engine is going to be. The economic engine is not going to be trying to replicate existing countries. I think the economic model is going to be how do we create a new ecosystem for digital countries.

SPEAKER_03: 43:19

That leverages on current countries.

SPEAKER_01: 43:20

For example, we've invested in quite a few sovereign identity startups. Some are doing well, some are not. Some are going to be amazing companies, some are not. But we're investing in all of them. And we're going to then... and then try to integrate them into this new digital country. Things like new types of education companies that are for the future of learning through you know, the new systems and new tools. Those are the companies that we need to sort of this central bank, the sovereign wealth fund needs to actually build those companies collectively. And I think that's going to be the economic model for the future. So sort of going back, I think the reason why I think we're kind of like well primed to do this is because we have a lot of experience as an ecosystem investing in future leading companies. And I think this is going to be a combination of transactional revenues as well as investing revenues and building up a new ecosystem for a new digital country

SPEAKER_02: 44:18

do you guys have like a estimated like launch date how long are we looking at for this thing to actually take shape

SPEAKER_01: 44:24

first launch may 21 next week monday if you're in half moon bay come on over

SPEAKER_03: 44:33

how do you how do you become officially How do you officially establish a country? I'm curious. What's the process of, like, being globally recognized that this is an official, you know, legit

SPEAKER_01: 44:44

country? So, you know, this is very interesting because the United Nations has a charter. Yeah. And if you actually read the UN Charter of what a member state needs to check and be to become a member of the United States, I mean, the United Nations, It's actually kind of cool because it's not impossible. It's really not impossible to be a member of the United Nations because like we were talking about earlier, there's 193 members of the UN today. 50 years ago, there were 70. So how did these new, you know, 125 new countries become members of the UN? Well, they went through the process. There's things like, okay, what's your cultural identity? What's your geographic borders? There's like all of these like sort of things, right? Have you guys ticked off any of the checkboxes for the UN? Interestingly, there's a UN body, I forget the name, but they're actually investigating and researching digital boundaries because it's become such a relevant part of our lives that what are the digital geographic boundaries? You know, I bet there's someone in the UN that's working on this idea. I don't know who they are. I'd love to talk to them. Web-free part of the UN. Yeah, who are kind of like this arbitrary research kind of arm, maybe. I'm just assuming there must be somebody. I

SPEAKER_03: 46:01

think another topic we talked about before you got here was travel. We talked about security and safety and everything from why people, what they want out of their government. But another one which is always comes up in conversation is travel, right? They always say Singapore passports are strongest in the world. My British one is slipping because we exited Europe and stuff. So is there anything that Draper Nation offers in terms of that? Is there visa-free travel? Are you considering that?

SPEAKER_01: 46:28

I would love Draper Nation to have a treaty with countries where they say, okay, if you hold this passport, just like any other passport, then you have mobility treaties where you can come in and out for X amount of time, et cetera, just like we are used to today. It's not far-fetched. to think that this could happen to a digital passport. But surely I think these would be treaties that we would have to build with countries. Though I think the more sort of like interesting sort of trend here is 50 years ago, 1974, when there were 70 countries, there was no internet. So people's identities and information sets and connectedness to the world was very, very geographic. If you were born in Singapore, you were a Singaporean and you didn't really know too much about the world. But in the last 50 years, all that's changed. People hold three, four passports. They live in one country. They study in another country. They work in another country. Their siblings are in different parts of the world. I mean, the whole dynamic of a more connected world has changed dramatically in the last 50 years. And it's going to 10x dramatically change over the next 50 years. And so the idea of citizenship and nationhood and identity to a certain sort of border, it's changed in my life. I mean, it's changed with me. My kids have three passports and they, you know, are like so comfortable with traveling around the world and being parts of different cultures, etc. So I think this idea of travel and comfortable with different cultures it surely has to change I think my kids when they're 30 years old I think they're going to live in a different world where the idea of countries is going to be very different

SPEAKER_03: 48:10

I mean like what you said is true there's more and more countries that want to proclaim their own identity

SPEAKER_02: 48:15

yeah and all the like digital identities that you were talking about like seeing past all these like a few years ago there wasn't anything like that yeah it all sort of like developed and it is like true that it's way easier year and it is something that we use instead of the physical identity that we use.

SPEAKER_03: 48:31

Super excited.

SPEAKER_02: 48:32

I guess we can sort of like wrap up the episode here. Maybe like before we end off you were saying like May 21st is going to be a launch and then is there anything after the launch like anything else we can expect from Drapel Nation or even Drapel House in the near future?

SPEAKER_01: 48:46

May 21 is our first launch of the product. Small launch in California where it's going to be a closed participation. Based on how that goes we will open it up to other people we're testing the tech tech has been built right now so there's a lot of work to be done

SPEAKER_02: 49:02

all right is there any socials that you want to drop that we can find more information about Draper Nation and Draper House or your personal link as well

SPEAKER_01: 49:10

yeah the best place to go is drapernation.com we're also on twitter drapernationhq and yeah those two are probably the best places to find

SPEAKER_02: 49:19

awesome

SPEAKER_03: 49:20

cool thanks

SPEAKER_01: 49:20

very much yeah thank you thank you thanks for being

SPEAKER_02: 49:22

on the episode and thanks everyone for listening to this week's episode of broadcasts we will see you in the next week we hope you guys enjoyed this one