Balaji Srinivasan, former CTO of Coinbase and author of The Network State, says cryptocurrencies were built to create “code-based order” as traditional institutions falter and blockchain becomes the backbone of a new world system.
Is virtual currency a global lifeboat? Balaji Srinivasan claims about X
The Silicon Valley entrepreneur and investor made his case in a post on X this weekend after responding to a user who questioned the real-world value of cryptocurrencies beyond speculation. Rather than dodging the criticism, the authors of The Network State reposted it and provided a comprehensive answer that reframes digital assets as the infrastructure of a borderless economic system.
“The purpose of cryptocurrencies is to create code-based order, because rule-based order is unfortunately crumbling,” Srinivasan wrote. He argued that blockchain networks can recreate and even improve protections traditionally covered by international law, such as property rights, contract enforcement, and identity verification.
In his words, the code-based mandate “guarantees property rights, smart contracts, code rules, privacy, secure voting, and cross-border user accounts,” adding that individuals will retain their “on-chain currency and on-chain identity, even in the face of demonetization and denaturalization.”
Srinivasan acknowledged that crypto networks are partially supported by financial speculation, likening them to a national lottery. “The lottery funds the state. The lottery also funds the network,” he wrote, drawing parallels between public finance and the blockchain ecosystem.
The broader question, he suggested, was whether society would receive anything better in return. As nationalism and socialism grow in parts of the world, blockchain will maintain open participation in global markets, allowing individuals to transact without regard to “race, religion, accent, ancestry, or other potentially irrelevant attributes,” he said.
His argument extends beyond money. In response to critics who noted that physical property and real-world assets remain dependent on legal systems and courts, Srinivasan pointed to emerging technologies such as smart locks and encrypted access controls.
“With smart locks, you can extend cryptographic property rights to anything that is protected by the door. You can extend that even further with cryptographic keys from robots and drones,” he replied, citing a July 2025 essay titled “All Property Is Cryptographic.”
In the article, Srinivasan developed a multi-layered theory. He started with digital assets, noting that “trillions of dollars worth of digital gold is secured on-chain” and that ownership of Bitcoin is globally verifiable. From there, it argued that legal clarification regarding stablecoins would pave the way for tokenized stocks, bonds, and other financial products.
The next leap forward will include physical infrastructure, such as homes unlocked with token verification, vehicles started with digital signatures, and capital equipment protected by blockchain-based control systems, he wrote. “All assets will be encrypted,” he declared, arguing that public blockchains provide a more resilient backend than traditional institutions, which are frequently breached.
Its vision is vast and unapologetically ambitious. Srinivasan argues that as Western institutions strain and Eastern nations consolidate power, blockchain offers a third way: a neutral, internet-native framework for property and identity.
“That’s what cryptocurrencies were created for,” he wrote. “If your country fails or turns against you, the internet will come to your rescue.” Whether this theory becomes mainstream policy or remains a high-conviction bet by crypto intellectuals, it adds a new layer to the ongoing debate about the actual purpose of digital assets.
Frequently asked questions ❓
- What does Balaji Srinivasan say about cryptocurrencies?
He said the purpose of cryptocurrencies is to create a “code-based order” that protects property and identity through blockchain technology. - What is a code-based order?
This refers to a system where rules, contracts, and property rights are enforced by software and cryptography rather than by courts or governments. - How does this apply to physical properties?
Srinivasan argues that smart locks and cryptographic keys have the potential to extend blockchain-based controls to homes, vehicles, and equipment. - Why is this discussion important now?
This comes as critics question the real-world utility of cryptocurrencies beyond speculation, prompting renewed debate about blockchain’s long-term role.